To understate, there's a lot going on in our profession. With the rush of private-equity buyers, technology breakthroughs, massive retirements and talent shortages, growth simply isn't the highest priority. Why then should firms work to improve their understanding of strategic growth?
The short answer is that the current frenzy of activity will not last forever. Market conditions ebb and flow, and ours is no exception.
Historically, before technology freed firms from a future of mundane work, before the aging out of rainmakers, and before the tsunami of interest in consolidation, growth was fueled by individual contributors. Banker breakfasts and lawyer lunches worked well enough, typically until firms reached a volume of about $10 million, and a shortage of rainmakers made it difficult to sufficiently scale the firm and keep everyone busy. It's often at that point that a strategic approach has been needed to continue a sufficient growth path.
For those firms committed to remaining independent, and those committed to having a growth strategy in place, I offer this overview of strategic organic growth principles, which I consider as foundational and immutable as "debit left, credit right." The principle, built around service, channels and targets, has had a significant impact on the future and fortunes of highly successful firms.
One firm CEO graciously noted on our website, "Gale Crosley helped us to establish a foundation for growth that goes beyond traditional marketing and business development. To this day, all our discussions about growth begin with SCT: service, channel, target. The results speak for themselves."
Three elements
The visual representation of the strategic growth principle is simple. Imagine three circles with "plus" signs flanking the middle circle. From left to right the circles are named:
1. Services: The offerings you bring to market;
2. Distribution channels: How you and your target market find each other in great quantities; and,
3. Targets: The markets you seek to penetrate.
All elements of strategic growth roll up into one of these categories.
Understanding the principle of strategic growth makes it possible to discover and execute a strategy, rather than implementing tactics without a strategy (e.g., a booth at a conference!). You now have the framework and vocabulary to evolve a revenue growth strategy based upon constantly evolving market conditions.
For example, a review of below-expectation channel performance might reveal a channel into the wrong buyer group, a channel owned by a competitor, or a new channel keeper with limited understanding of the alignment of interests between your two firms.
Similarly, your service performance may be under competitive pressure due to a diminished value proposition. Or perhaps you're seeing a shift in the target buyer group, such as a regulatory change that reduces the buyer group's need for your service. Dynamic market conditions mean you need to be constantly attentive to the impact on each element of the strategy. Think about the effect on Ringling Brothers/Barnum & Bailey when Cirque de Soleil came to town — a complete market disruption!
The strategic growth principle is also valuable in making an initial assessment of a firm's industry and service line performances. In consulting with firm leaders, the three circles are my organizing principle. I envision in my mind the framework as I gain a sense of the relative strength of the three categories. These conversations lead to identification of the changes in the appropriate categories to shore up the strategy and get revenue flowing.
Today is not the future. Change is inevitable and market shifts are certain — don't be caught without a strategic plan to adapt and grow. In a future article, I will add depth and detail to each of the three circles.
