Sources for Growth

Intro

During a recent family trip to Arizona, I spotted a shrub that somehow was green and flourishing when all the surrounding shrubs were dry and dormant, struggling to survive. It got me thinking. It was tapped into a source that led to flourishing.

The source made all the difference.

Steps To Find Sources Of Growth For Your Business

Finding a source of growth and flourishing for your business is hard work especially in the B2B world where market research is hard to come by. It boils down to identifying and balancing market opportunities with risk. Here's one example of how I helped a small B2B business get on a path to growth several years ago.

First, Identify the Opportunities

1. Identify the Growth Team – We started by identifying executives in the organization that were mostly market and customer facing. They were tasked with identifying (using any method they wanted) opportunities, providing a short description of it, estimating the incremental revenue it would generate, an estimate of the probability of success, and a "distance from the Core" (DfC) rating (0-7 scale).
2. Start with the Core – Each team member identified opportunities with existing customers in existing markets with existing offerings. (DfC 1 or less)
3. Expand to New Customers in Existing Markets with Existing Products – Each team member also went through the same process for new customers in existing markets. (DfC=2)
4. Expand to New Products or Expanded Offerings for the Core – Identify new need-based customer offerings that may generate additional revenue opportunities. (DfC=3)
5. Expand to New Customers in Adjacent Markets with Existing Products – Finally, team members identified opportunities outside the core in new markets. (DfC=4-5)
6. Expand to New Customers in Adjacent Markets with New Products – Higher risk opportunities.(DfC=6)
7. Expand to New Customers in New Markets with New Products – Highest risk. (DfC=7)

Next, Assess the Opportunities

1. Compile the Opportunities – For ease of use, all opportunities were put in a common spreadsheet that listed the name of the opportunity, a short description, the estimated size, an estimated probability of success, and the DfC rating. Team members then individually reviewed every opportunity.
2. Team Evaluation – The team discussed all opportunities in a meeting where they also agreed to the DfC ratings and Probability of Success.
3. Final Compilation – Finally, all opportunities were compiled into a risk weighted portfolio analysis. Here's an example.

Finally, Make Strategic Choices

Once the opportunity portfolio was compiled, the team made strategic choices that balanced overall estimated impact (revenue) with risk and resource needs. Here are some examples.

• Close-in opportunities that  have a DfC<3 and are low risk were not considered strategic and were instead folded into the day-to-day business as "just do it".
• Opportunities with a DfC in the 3-4 range were chosen based risk weighted size, resourcing needs, and overall risk.
• Opportunities with a DfC >4 were chosen based on overall portfolio needs and risk.

Conclusion

Just as the source of flourishing made all the difference for that shrub in Arizona, the source for your business to flourish will make all the difference in your business' long term health and vitality. Because of this, it needs to be the primary focus of any strategic effort.