We often hear the term ‘Business that isn’t growing is dying’. But is it really true, or is it just a way to create an unnecessary hype around the culture of expansion and commercialization?
The truth is that no business can survive in stagnancy. It must constantly change, evolve and keep up with market expectations and industry trends. As Jeff Bezos (founder of Amazon) mentioned,
“In today’s era of volatility, there is no other way but to re-invent. The only sustainable advantage you can have over others is agility, that’s it.
Because nothing else is sustainable, everything else you create, somebody else will replicate.” So it is clear that no company can just create a product and service, and expect lack of competition. The only way to survive in a competitive environment is to constantly grow and adapt to changes, but what does growth really mean? Is it only revenue growth and expansion, or can is it a more holistic form of growth?
Let’s look at different dimensions of growth that a company needs:
The most common concept when anyone thinks of growth regarding business is revenue growth. Revenue growth for business is extremely important. It’s a competitive age. Businesses not only have to compete with each other to stay ahead of the curve, but they also have to compete to hire the best and most productive and talented employees. To hire and even retain such talent, their salaries should be lucrative with constant raises and benefits. With growing inflation, revenue growth is an absolute necessity. Furthermore, the lack of revenue growth can lead to declining profits, equity, employees, goodwill or a combination of all.
While revenue growth is extremely important it’s not the only factor of growth in a business. It is equally important that each individual within the company grows in terms of skills, expertise, and productivity levels. This highlights the growth culture within a company, and growth culture is crucial. Consider this: employees join a company for salary, and benefits, but also to learn, grow and improve. If a company does not challenge its employees to strive, learn and constantly perform better, then they lose interest, and the work atmosphere becomes stagnant. The best and brightest minds don’t even want to work at such a company, and if this situation occurs, you will see all your talent flocking to change jobs. That is why a growth culture with constant challenges and aspirational objectives is a must in every organization.
Every business that needs growing revenue, can only achieve it by growing customers. Businesses need to grow their marketing strategies, sales efforts, and overall performance to attract new clients while retaining old clients. But that isn’t possible if your customer outgrows your company’s ability to meet its demand. Often market demands for certain products increase, and if a company cannot grow to scale their supply, they lose their clients to a competitor. This is especially true for B-to-B models.
GROWTH OF TECHNOLOGY
We cannot consider any advancement in today’s age without talking about technology. Going digital and constantly evolving technologically is essential for every company. More than a billion people are connected on social media platforms, one-third of the population uses smartphones, and Millennials and Gen Y are all about technology. If a business doesn’t constantly keep up with the latest innovations, then it stands to lose an immense number of potential customers. Technology provides the benefits of higher engagement, increased data security, better time management, and detailed analytics, just to name a few. The importance of digitization is so widely recognized that most companies are expected to have a Chief Digital Officer soon. And the only way for a business to survive in this environment is to follow these trends or lead in creating new ones through the adaptation of the best and latest technology.
Now that we have looked at the different aspects and dimensions in which an organization has to grow, we can see that they are all interlinked, and crucial to the survival of any business. But how can such growth be achieved?
The simple(but not easy) way is execution. Any company that isn’t focused on the discipline of execution cannot grow. But how can a business instill a culture of execution? The answer lies in OKRs (Objectives and Key Results). OKRS are a tool or a framework used to define the main goals or focus of a company and measure the performance based on the execution of these defined objectives. But how should these objectives be defined? The same goals are often not necessary for every individual as they are for the company. One of the ways to implement OKRs is to do it in various levels.
These can be:
- Company Objectives
What is the vision of the company? Why was it founded and what is its purpose? This is what the driving focus of everything should be in the long run. This decides what your company’s primary objectives are, in alignment with the vision of the owner or founder, which truly defines the purpose of that company. Some key aspects of these are:
- Summarizes the vision of the company.
- Set for 1 to 3 years aligned with your vision
- We don’t define the Key results for company objectives.
- CEO OKRs
These are objectives set for the CEO They can be objectives like revenue goals, minimum growth targets, expansions, acquisitions, increased goodwill etc. They must be in alignment with one of the company objectives.
- Team OKRs
These are objectives set separately for every team in the company. They are created in tandem with the annual objectives of the company, in order to ensure their execution. Every team through it’s own set of objectives and key results works together to contribute towards the company’s annual goals. These OKRs are monitored by executives and can help them quantitatively judge the progress towards the company’s objectives. Some key aspects of these are:
- Objectives set quarterly.
- Managers own the objective and key results are owned by people under him or in different teams.
- Growth initiatives which need cross-functional collaboration can also be created as OKR’s.
- Used to align the aim of every team to the aim of the company.
- Individual Learning OKRs
These are objectives set for every individual employee which fulfills the learning agenda of the individual. If every employee works towards its success, through individual learning goals, it clearly enhances their professional growth and in turn their skills & capability. This allows for smooth execution and easy monitoring of performance. Some key aspects of these are:
- Very precise in nature; Easy to understand.
- Very short term, perhaps monthly.
No company is formed with a static vision or purpose. Every company has a vision of expanding and growing. Hence growth is not only aspirational but, as the article highlights, essential for every company. As business leader & author, Jack Welch states in his book Winning, ‘Change before you have to’, so that you can remain ahead of the curve and grow. But the only way to consistently achieve growth is to maintain the discipline of execution.
With varying departments, competing employees, bureaucratic processes, execution becomes increasingly hard. That is why a strict framework is necessary to maintain an upward trajectory. There is no better or more customizable tool for this than OKRs. If your business isn’t growing in this fast paced competitive age, it surely is dying. OKRs can be the weapon to stop this stagnancy and ensure constant growth.