Growth Management

by Ibrahim Niftiyev, PhD in Economics

Azerbaijan State University of Economics (UNEC),
International School of Economics (ISE)

Week 2
Contents
 Implementing sustainable growth management (Chapter 4)
 Identifying growth opportunities (Chapter 5)
Learning objectives

 Outline “Getting Started” Phase

 Explain how to establish an initial team
 Identify the roles of the Board and “Champions”
 Identify relevant Growth Opportunities
 Define the scale of each opportunity
 Identify the need to “War Game” competitor activities
 Highlight the need to understand barriers to entry and exit
Implementing sustainable growth
management
Chapter 4
Getting started
 In Chapter 3 we established the need for a “Two Hats” approach to manage
separately the day to day activities and growth.
 We all want to work in businesses that are energetic, provide ongoing
shareholder value and test and develop us as individuals and as teams.
 The only way to implement Growth Management in businesses is to:
• have commitment from the Board to a progressive, long term and
sustainable change;
• set the scene internally to key players and influencers;
• use a practical real opportunity (pilot) for growth;
• include a broad range of functions of the company to expose the whole
organization to growth management;
• select a core team to work on the first pilot opportunity.
What does it mean to use
“Two Hats” approach
- Thinking beyond tools, This simply means integration
of teams and players with the
processes and techniques;
- Joined up thinking between overall business growth
- Energetic and
day job and growth opps. dynamic
business;
- Increased
The crucial question is What are we trying to achieve? shareholder and
customer value;
- Developing and
testing as
inviduals and as
• Adopt “Two Hats”
teams.
approach;
• Set the scene for the key Sector
players and influencers; leaders
• Use a pilot; A team that makes
• The pilot uses all the faster and better decisions
functions of the company; than a competitor.
• Select a core team
It has clear stages Growth management
Board Commitment

Agree the Agree the Last the

priorities resources duration

Support the Remove

Enable
teams and barriers and
capability
individuals politics

Guide and Be open and

mentor encouraging
Setting the scene internally
 Setting the scene internally to key players and influencers
requires clear communication of the objectives and principles of
a Two Hats approach over time.
 The messages need to be consistent to get the message across
fully to all employees.
 Everyone knows that different people will take different
meanings out of the same communication and some need more
convincing than others.
Don’t do too much at first and learn by doing

 Your first pilot project needs a small team working together

across as many functions as is reasonable.
 This gives the company the opportunity to expose Growth
Management to a broad range of employees.
 However, you need to choose a pilot project that is big enough to
be worthwhile commercially, but not so big that it requires too
much resource and risks sufficient focus on the day job to deliver
cash.
 A pilot growth management project provides the basis to learn by
doing. This focuses individual and team actions on what works
as a team and cements the learning quickly into the company.
Team selection
 To give the team the support it will need, it needs to be supported by the
personal commitment of the board and senior directors and by a specific
“champion” who is a board member or senior director.

Support team Role

Board and senior Board commitment to integrating Two Hats into the company's
directors business structure, with individual sign-offs and open support for the
pilot and subsequent growth projects, emphasizing mutual support
among board and senior directors, and agreeing to prioritize and
allocate resources for selected growth projects.
“Champion” Dedicated champions for each growth project committed to both
growth management and day-to-day operations, focused on
overcoming obstacles, representing the project to the board, and
supporting team development.
Choosing the champion

Additional
supporters +
Sales and HR
supply are
expected to
Balancing the grow
core capabilities
of the team
members
ComCo
selects the
champion: the
purchasing
director
Identifying Growth Opportunities
Chapter 5
Identifying growth opportunities
 Companies need to make sure that their Growth Opportunities reflect the
capability of the business as well as being sufficiently large to justify
investment in time and resources.
 Growth is not about getting new customers. It is about getting sustainable
new business.
 Gaining new customers is far more expensive than retaining existing
customers.
 In both cases, customers that are bought by the business are the most fickle
and provide the lowest returns.
 Organizations that genuinely offer real and perceived customer value must
ensure that all new growth opportunities are based on maintaining the same
focus (providing long term customer value)
 Business strategy/ business alignment

 A well known tool for

helping analyzing various
growth opportunities is the
Ansoff Matrix.
 Igor Ansoff in the Harvard
Business Review in
September 1957 published a
simple chart based on two of
the key factors – products
and markets
Competencies and enablers
 What are competencies and enablers in a given company? (Systems,
technology, processes).
 Not many companies really understand them.
 They should be based on two things: customer value they add + differential
advantage they provide versus competitors.
 How do we understand it? By using Relative Competencies Matrix which
follows the logic below.

Required Created value

Customers
competencies (profit)
 Experience/ sector understanding

• If you analyze how and why, you

Comp
etenci
analyze competencies
es

• If you analyze who, where, and when?

Then you analyze experience in
Exper
ience company.
 Experience/ sector understanding
How to understand the experience of the
company and its sector understanding?

• To explain
Who is and
Collect Look for Look for buying what, Use interpret
data patterns patterns where, when experience the
and why? patterns
 Experience/ sector understanding
What the
How to understand the company works
experience of the company on?
and its sector
understanding?

What it
supposed to
work on?
 Experience/ sector understanding
How to understand the experience of the
company and its sector understanding?

What are the

things that
your customers
Check the Look for gaps Compare Do I
regularly buy
transactional in the current with the Ask yourself understand my
data competitiors from the
offering sector?
competitors
that you do not
offer?
Transferable capability, learning and partnerships

 Competencies + Enablers + Experience, and then you need to

understand which capabilities can be transferred to new
sectors.
 New sectors or growth can require new capabilities.
 You may have gaps.
 If so, learn or partner!
 But beware: be realistic, pragmatic and have achievable
assumptions.
Current gaps, market trends, emerging sectors and new markets

 Some of your growth opportunities will come from researching

market trends, and emerging sectors, defining over time the
opportunity in revenue, margin and unit volume.
 The research should also reveal the similarities and differences
versus existing market needs and your company’s current
propositions.
 Using a “Diagnostic Matrix” can be useful.
Current gaps, market trends, emerging sectors and new markets

 Some of your growth opportunities will come from researching

market trends, and emerging sectors, defining over time the
opportunity in revenue, margin and unit volume.
 The research should also reveal the similarities and differences
versus existing market needs and your company’s current
propositions.
 Using a “Diagnostic Matrix” can be useful.
Barriers to entry and exit
 Each growth opportunity will have barriers to entry and exit which
your company will need to identify. The relative “height” of the
barriers will have a direct impact on investment, financial return
and business risk.
 During the analysis of barriers to entry and exit, you should focus
on the competitions.
 Importantly some opportunities will have high barriers to exit:
disposal costs that have to be recognized in the risk assessment.
Competitor strategies and “war gaming”
 The amount of information you can get on competitors is dictated
by how much is in the public domain.
 You may have three general types of competitors: direct, indirect
and latent.
 How to get data on competitors?
Website Financial accounts/ Price lists
Companies house/ Financial
press
Catalogues Advertising, POS, Conferences/Forums/ Industry and
Events, Promotions trade bodies (also 1 on 1 meetings &
contacts)

Industry Press/PR Customers and

coverage/local, prospects
regional, national press
Simple mapping
 To help work out how competitors are likely to respond to market
trends and opportunities, it is a good idea to use simple mapping
techniques.
Thank you!