Growth system. You’ve heard the term, you thought about it, and you fell down the rabbit hole. And rightly so. Defining a growth system for your business requires a lot of thought and if you’re a large enterprise, you’ll need alignment and focus. For the sake of this discussion, we’ll keep things as simple as possible. Let’s discuss growth systems for digital business models, namely, e-commerce/digital ordering and SaaS subscription.
What’s a System and Why is it Important
To use the plainest language possible, a system is a collection of processes, technology, and people. A growth system would be the collection of activities performed by people and the technology used to realize growth. When we have a system, we can monitor health of that system and build in predictability.
When we think of growth and profit it’s easy to focus on traditional methods of growth realization.
- sell more to your existing customer base
- launch a new product or service
- enter a new market
- exploit emerging markets
These are, generally, slow ways to create customer value and certainly not done overnight.
The elegance and beauty of digital businesses is that everything is on hyper speed. Rapid experimentation can be performed on customer segments enabling a powerful growth engine. Because of the speed and evolving technology, a growth system for digital businesses is crucial. This system should allow you to:
- Monitor system health in real-time
- Create a sense of repeatability
- Perform long-term planning for enabling technology — more on this in the recommendations section
All these items are meant to slow entropy (chaos).
The Growth System
For a moment, let’s just clear the air. When we say, “system” we are NOT asking for you to throw your creativity and sense of self to the wind. In fact, it’s better if you keep your creativity as creativity leads to inspiration and team engagement. I’m a huge believer that non-linear thinking will get you far when you are staring into an unknown abyss. After all, you can’t determine unknown unknowns in a linear way. You must create a picture of a solution, test it, and chase it.
With that being said, a growth system is really two things:
- an experimental approach to solve problems
2. a way to capture the value discovered through experimentation
Both items also require a cross-functional team to research, ideate, create hypothesis’, test, and scale or scrap. However, this process would be lost without focus, for example, scientists have a general idea of what to research before they start ideating.
How to focus
- Know your growth levers — these are defined by your growth model or can be intuitively determined if you have large gaps. During my time as CPO of a Boston Consulting Group Venture our product had major gaps on the buyer side of our two-sided marketplace. We didn’t need a growth model to realize this. Don’t over analyze.
- Know your customer and the value you are creating for them. At Starbucks, our mobile order and pay app created convenience for the customer. Everything thing we worked on was centered on making things more convenient. That meant the Product and Marketing teams were alongside Operations unknitting customer anxiety.
Above I talked about utilizing an experimental process. That process looks like this:
Most, if not all of you, have seen this process. Many consultants, advisors, and colleagues who have just returned from conferences have all talked about it. We know it as something we aspire to. However, very few companies employ this cycle. Why? Because it’s incredibly hard to implement. There needs to be alignment from the top on down on goals and a team structure needs to be loose enough to take advantage and execute on all levels. In other words, clear OKRs and a team that can run Sales, Product, Marketing, and Operations experiments sometimes jointly and other times independently. Yet, come back together to prioritize and capture the value that was found throughout the experimentation process. This requires:
- An extremely humble, cross functional, and engaged team
- Top-down alignment
- Focused process
- Creative leadership
You can make this happen, but you actively must work toward doing what’s best for the team.
Alignment — Get alignment on the goal. This could be an experiential goal, revenue driven, or something else. The point here is that focus matters and the team won’t be able to focus without a cemented goal
Assemble the Team — Create the team around the customer value proposition. If the customer value involves Operations, include them on the team. I speak about growth teams in more detail in my article Creating Growth Teams for Multi-Channel Businesses.
Get Your Metrics Together — Understand what success looks like. Have some leading and lagging indicators to show whether you are moving in the right direction. For the Starbucks app we kept it simple, we looked at retention, new users, and lapsed 30–90.
Build Your Growth Model — Your growth model will provide clarity to your stakeholders and to the team. It will show you THE WAY FORWARD.
Create Your Process — Go as light or as heavy as you need to with process. Understanding how much certainty will be required for an investment will help you determine whether you need a heavy or light touch with process. Over engineering the process may not necessarily provide more certainty. However, know when you need that certainty like when you’re impacting revenue generating programs.
Capture The Value — It’s one thing to experiment but it’s another to capture the value determined by those experiments. A team or set of teams needs to be in place to prioritize and capture that value.
Technology Strategy — Determine what tools you’ll need in order to execute and figure out a plan for evolving those tools. This would include your martech stack, Operations technology, loyalty, etc. Mature companies have a plan for how their technology supports their business capabilities.
Learn and Share — The purpose of experiments is to learn, to learn about your customer and learn how to work together as a team. Earlier in my career, I remember spending an enormous amount of time preparing materials for my executive steering team. I focused on the mechanics of how we were going to execute an initiative. One of the steering team stopped me and asked, “this is all great, Chris, but what do we intend to learn from this?” It was a good lesson that learnings create value for the business.
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Chris Brandsey is the CEO and Founder of Frame and Flight, a boutique consultancy company helping businesses achieve digital growth. Prior to founding Frame and Flight, Chris led product organizations at several startups and grew mobile app and omnichannel technology for Starbucks Coffee Company.