Released 14 years ago, the Good to Great core concepts are relevant today, particularly if you enhance them with emerging best practices. It’s nearly impossible to find an executive today who didn’t read Good to Great or hear Jim Collins speak. His memorable quote “Get the right people on the bus” is now part of the fabric of business.
The reason Good to Great was earth shattering was that it was built on quantifiable evidence. Other business thought leaders approached strategy from a qualitative approach. Collins sampled 1,400 good companies. What he examined was their performance over 40 years to find 11 companies that had become great. The main metric was 15 years of stock returns at or slightly above the market punctuated by a transition point where they outpaced the market 3X over a 15-year period. The implications were based on proven data. Business leaders listened.
SBI takes the same quantitative approach to revenue growth. We study the best practices of those companies who consistently outpace their competitors and industry. This article builds on the Good to Great core concepts to offer enhancements for revenue generation.
The core enhancements to go from Good to Great today include:
- Strategic Alignment – SBI data shows the top 22% of companies that grow revenues faster than their competitors and market have Strategic Alignment.
- Execution Planning – Collins addresses doing the right things (Strategy), but came up short with doing things right (Tactics).
It’s difficult to grow revenue faster than your industry’s growth rate and faster than your competitors. The Revenue Growth Diagnostic interactive tool will help you determine if you are likely or unlikely to make your number.
Strategic Alignment is defined as strategic plans that exist, are implemented, and are aligned internally and externally. The functional strategies include corporate, product, marketing and sales. Internal alignment involves interlocked corporate, product, marketing and sales strategies. External alignment involves alignment with buyers, users and trends of the market.
Why is this important? To leapfrog the competition as Collins describes, you have to align functional strategies to produce above average results. Research shows that the companies that consistently hit their revenue growth have the common denominator of strategic alignment. These are the top companies representing 22%. To be great, you have to achieve strategic alignment to leapfrog and stay ahead.
The Hedgehog concept was introduced by Collins to drive focus in your sweet spot. This moves companies away from trying to do a lot of things well. The Hedgehog concept is to pick just one thing and do that better than anybody else.
To illustrate strategic alignment, here is an example: The CEO of a company allocates people, time and money towards the pursuit of profitable growth. Once that’s defined, it makes sense then to design and launch your products into the marketplace that solves the market problems that you’re trying to address. Then your marketing strategy can be built, which is driving demand for those products and services. Then comes the sales strategy, which is converting that demand. This is the execution piece. Converting the demand into revenue.
Strategy is doing the right things and tactics is doing things right.
Best-in-class growth executives blend strategy and execution masterfully. They understand that this quarter’s results reflect actions they took a year ago. And next year’s results will be determined by the actions they take today.
Some executives just focus on strategy (i.e., doing the right things) and suffer periodic short-term revenue misses. They sound good but don’t produce. And other executives just focus on execution (i.e., doing things right) and suffer periodic long-term revenue misses. They work hard but are unreliable, going from hero to goat quickly, and unexpectantly.
Growth executives in the top 22% work on strategy, and tactics, together in unison, resulting in making the revenue number always, in a predictable, hassle-free way.
It is easy to be good. It is difficult to be great. If you want to be great and grow revenues faster than your competitors, and your industry, read on. We have codified these emerging best practices in a methodology you can implement at your company.
Have expectations gone up and left you wondering if you can make your number? Here is an interactive tool that will help you understand if you have a chance at success. Take the Revenue Growth Diagnostic test and rate yourself against SBI’s sales and marketing strategy to find out if:
- Your revenue goal is realistic
- You will earn your bonus
- You will keep your job