I saw an interesting headline that caught my eye: “The 10 rules of growth.”
When I clicked, I discovered a research paper from McKinsey that examined the growth habits of successful companies. I read this through the lens of a small business owner and thought it would be interesting to add my observations. Do these 10 rules of growth ideas fit for everybody? Even small businesses like mine?
I was curious. So here’s my take.
I present to you the 10 rules of growth — with my entrepreneurial spin!
The article states that you should start with a winning, scalable formula.
I think this is an essential idea. When I consult with businesses, I often find they don’t have a clear idea of how they stand out. If you can’t explain your point of differentiation to me simply, how do you expect customers to understand why you’re special?
I encourage business leaders to finish this sentence: “Only we …” to work through meaningful points of differentiation. It might take weeks to come up with the answer, but it’s there. And once you find it, it’s liberating and provides a map of possible growth.
In my book Cumulative Advantage, I write about creating momentum by gearing your competitive advantage to seams of opportunity created constantly by this fast-changing world.
In my TED talk, I describe the strategy of attaining relevance like a surfer. Chances are, you have a great surfboard (competitive advantage). You don’t need to abandon your surfboard — you need a new wave!
Being constantly aware of the trends and prioritizing profitable, relevant, fast-growing markets is an absolute requirement for entrepreneurs! We don’t have time to keep re-inventing ourselves, and we don’t need to if we’re aware of the relevant waves of change coming at us.
The article states that it’s not enough to go with the flow — you need to outgrow your peers.
This means you need to be the best in your niche.
When I taught about social media and content marketing in the past, I used to describe a model called “RITE,” which stands for
In the early days of digital marketing, that was enough. Around 2016 I added an S — RITES. This is for Superior. You just can’t be good. You have to be superior, or you will be abandoned. Keep pushing for better.
For me, this means FOCUS.
Lack of focus is a HUGE problem with the entrepreneurs I coach. They jump from idea to idea without a plan. I am a big fan of focus and discipline in the small and growing business!
Focus on growth in your core industry — you can’t win without it.
If I had to vote on the most important among these rules for growth, it would be this one because it is such a fail point for so many businesses.
The article suggests you need to nurture growth in adjacent business areas. Now, we need to be a bit careful not to mess up our focus, but yes. When it’s time to grow, look at adjacencies.
Here’s what I’ve found for most small businesses — the world is telling them how to grow, and they’re just not hearing it. Sometimes entrepreneurs fall so deeply in love with one idea and one vision of the future that they’re ignoring the new ways customers are pulling them into profitable new opportunities!
Pay attention to interesting new needs and trends in your local city and community. Some of the most amazing businesses have been created from small observations about trends on the local level.
This is where small businesses find the gold. Most niches are overlooked by big companies looking for the next $100 million idea. But entrepreneurs have the power and connections to make riches in the niches.
The article specifically points out that this is a winning strategy as you seek adjacencies. How do your skills and competencies overlap with other new market needs?
Just as it is hard to achieve overall growth if your core business isn’t thriving, it is unlikely that you can raise your growth trajectory without winning in your local market.
As an entrepreneur, this is your test bed. If you can win in your home market, you can learn lessons that will help you …
Here’s the most exciting aspect of most entrepreneurship today: Almost every business is potentially an international business because the internet can provide global interest for any promising product or idea.
This was a mistake I made early in my entrepreneurial career. I was thinking way too small. I was planning for my business to be contained within my local region when in fact, the world found me and hired me.
Pay attention to global traffic trends on your website analytics.
McKinsey studied large companies to create this report and found that mergers and acquisitions account for approximately one-third of the revenue growth among companies in the data set.
When starting a company, the emphasis is usually on organic growth and cash flow. So this was perhaps a little less relevant for the entrepreneurial mindset.
While you might not be thinking about mergers and acquisitions early on, don’t overlook the power of collaborations.
The report suggests ruthlessly pruning your portfolio if you need to.
This is a very healthy suggestion. As a business owner wearing many hats, I tend to get into a groove of activity, without looking up to see if that activity is still working like it used to.
At the end of each year, I spend a few days thinking about strategy and taking a clear-eyed look at what I’m doing, what I need to quit, and what I need to start. This has resulted in some dramatic shifts over the years. But I guess you have to ask yourself … the world is changing so fast … if you’re NOT making dramatic shifts too, is something wrong with your strategy?
I thought this was an interesting article on the rules of growth, and I hope you liked the way I presented the ideas in a relevant format.
I’d also like to point out the blogging technique I used today. I’ve created a meaningful, interesting post of nearly 1,000 words — and the original idea was not my own.
I probably do something like this once a quarter when I see some other article that is profoundly interesting … but missing something. In this case, I am viewing the philosophy behind a multinational growth strategy through the lens of an entrepreneur.
Perfectly legitimate, and for one day, it took a little pressure off of me to come up with an original idea. And of course, I’m also benefiting McKinsey by positively highlighting their work and linking back to them.
A win all the way around!
Mark Schaefer is the executive director of Schaefer Marketing Solutions. He is the author of some of the world’s bestselling digital marketing books and is an acclaimed keynote speaker, college educator, and business consultant. The Marketing Companion podcast is among the top business podcasts in the world. Contact Mark to have him speak to your company event or conference soon.