7 Lessons From High-Growth Businesses

A few weeks ago I spoke to the leadership team of one of my retail clients about what creates a high-growth business. Here, very briefly, are the 7 lessons I shared:

  1. Willing to be first. Most successful businesses are generally the first to successfully exploit new market opportunities. Requires entrepreneurialism and prudent risk-taking.
  2. Relentless focus on where you can win. High-growth businesses don’t try to be all things to all people. They make choices and trade-offs about where they can truly succeed.
  3. Less really is more. You should not have more than a handful of priorities at any one time. It’s far better to move three things a mile than 100 things an inch. You can always come back to your other ideas later.
  4. Fixed on the vision, flexible on the journey. This is a quote from Jeff Bezos, the founder of Amazon. It’s likely that you will need to constantly change your sails to harness the power of the fickle market winds, but you can only do this if you’re clear on your destination. Expect your initiatives and tactics to change, but be relentless in pursuing your key goals and priorities.
  5. Actions speak louder than plans. Success generally goes to businesses that learn – and apply those lessons – the quickest. Don’t wait till your offer is perfect, get it out in the market and refine and adapt as you learn. Fail fast, fail cheap and win big.
  6. Persistence and Discipline. Maintain commitment to your goals. Don’t give up if you don’t first succeed. This is the critical capability that enables you to deliver #4 above.
  7. Healthy paranoia. Nothing fails like success, so relying on your past successes is a great way to die. Focus on delivering constant innovation and evolution so that you can avoid having to try last-minute revolutions.

Which of these 7 lessons should you focus on to help accelerate your next stage of growth?

© Stuart Cross 2015. All rights reserved.

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Business Rocks – Finney’s New Pet Food

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Our dog, Finney, has been with us for a little over a year now, and has become a huge part of our family. My wife – who Finney mistakenly believes is the leader of our family pack! – has been looking to change his food. Her new solution is a tailor-made product designed specifically for Finney based on his breed, size, age, lifestyle and taste preferences, and which is even delivered straight to our door in a bag with Finney’s name on the side. Personalisation has come to dog food.

Many companies talk about the concept of personalisation, but few really innovate effectively in this area. Finney’s new food got me thinking about other possibilities for development. Staying in the food industry could you imagine, for instance, personalised baby and toddler food, breakfast cereals, tea and coffee blends, or diet and exercise related food products.

And what about your market? What are the opportunities for personalisation that you could be developing and offering your customers?

Off The Record: Hey Bulldog by The Beatles

Some kind of solitude

Is measured out in you

You think you know me

But you haven’t got a clue

© Stuart Cross 2015. All rights reserved.

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Business Lessons From The General Election

The UK’s unexpected election result immediately led to resignations, investigations and recriminations for the losing parties. This is particularly true for the Labour Party, which had hoped to install its former leader, Ed Milliband, as Prime Minister. There are already countless newspaper, TV and blog articles assessing and theorizing why Labour lost, and this exercise will continue for months, if not years.

Far less attention has been paid to why and how the Conservative Party won, and what the lessons are from its success – or, for that matter, the Scottish National Party’s revolutionary performance north of the border.

It’s the same in business. Failures are pored over to understand what went wrong, who’s to blame, how the weaknesses should have been spotted and corrected and what new approaches are required to improve the chances of success the next time around.

But successes deserve an equal amount of analysis and assessment. Some critical questions I would want the winning parties – and winning businesses – to ask themselves include:

  • What were the specific drivers of our success?
  • How can we replicate and extend these drivers of success in the future?
  • How can we leverage this success into other areas of our organization?
  • Were there any negative factors that reduced the size of our success, and how can we address them going forward?
  • What elements were missing from this success and how could we improve future performance by adding them into the mix?
  • How could we have achieved this success more quickly, and what do we need to do to accelerate the pace of future results?

How could you use these questions to more effectively review the secrets of your success so that you can further accelerate growth and identify ways to raise the bar still higher?

© Stuart Cross 2015. All rights reserved.

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The 3 Tasks Of Transformative Leaders

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Why are so many people focused on leadership style when they should be focused on leadership results?

A quick review of Amazon’s management book store, for example, highlights books on ‘human-centred leadership’ (What, as opposed to fish-centred leadership?), ‘conscious leadership’, ‘strengths-based leadership’, ‘uplifting leadership’, and even the top 100 ways to become a great leader (if you really want to confuse someone, then offering 100 best ways is probably a good way to go about it!). It’s little wonder that so many people are confused about what leadership is all about.

In reality, there is no one best way to become an effective leader: they come in all shapes and sizes. I’ve known some great business leaders who were natural communicators and those who would be reluctant to address a crowd of more than three people. I’ve known effective leaders who were brilliantly insightful strategists with an MBA from the best business schools, and others who eschewed the need for detailed strategy development. And I’ve known some truly impressive leaders who want to get close to their teams and others who couldn’t care less about team bonding and who are only interested in getting the job done.

That said, whichever style you choose to lead your organisation, there are three critical tasks you must deliver. How you achieve these tasks is up to you, and should reflect your own strengths, preferences and personality. But if you want to build a successful, thriving organisation, then you need to focus on the following:

  1. Establish a compelling future. Do you know where your business is going to, and how it will succeed in the future? Does that future have both a sound, rational basis for people to support it, as well as generating emotional excitement for your teams?
  2. Build genuine organisational commitment. Is everyone in your organisation focused on the same overall goals? Does everyone feel involved in the delivery of these results, so that they are willing to go the extra mile to deliver?
  3. Ensure effective delivery. Are delivery accountabilities clear and are your people up for – and up to – the job? Do you have effective ways of managing results, and have you found ways to deliver new ideas and innovations faster than your competitors?

Don’t look to develop a supposedly ideal leadership style, or to become the ‘perfect’ leader. Instead, look to deliver the best leadership results you possibly can. By focusing on these three critical tasks you may just find that you are finally able to deliver a real transformation of your organisation’s results.

© Stuart Cross 2015. All rights reserved.

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You Can’t Spray And Sprint

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As part of the research for the new book I’m writing, I recently met with Richard Baker, the former CEO of Boots the Chemists and now the Chairman of Whitbread plc and DFS Limited.

Richard talked about the importance of strategic focus – concentrating your efforts and resources on those core activities where you can win – and how management teams can easily become distracted chasing sales in markets where they’ll never be able to lead. He calls such distractions “spraying” and ended our meeting by saying “You can’t spray and sprint!” Effort spent trying to grow where you’re not advantaged simply slows you down and reduces the pace at which you can develop your core business.

In his time at Boots, Richard refocused the business on pharmacy, healthcare and beauty, calling time on non-strategic categories and services as diverse as homewares and in-store massages. Alongside operational improvements and sharper pricing, his approach returned the business to growth and led to the successful merger Alliance Unichem in 2006 and the new group’s £11 billion acquisition by private equity firm KKR a year later.

Where are you becoming distracted by non-core revenue growth and how can you stop “spraying” so that you can start “sprinting”?

© Stuart Cross 2015. All rights reserved.

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Business Rocks – In-Flight Maps

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This week’s riff: I’ve just returned from a quick trip to the US. The in-flight entertainment choices seemed almost limitless, covering all the latest movies, a wide choice of TV programmes, different musical genres and a selection of games. Yet, as I stretched my legs around the plane at least half the passengers weren’t watching the entertainment at all. Instead, they had switched channel to the in-flight map, showing where we were on our flight and how far we still had to go.

People want to know where they are and where they’re headed. That’s true for people’s work-life as much as it is for long-haul flights. How do you help your people understand the direction of your business and where you and they are on that journey?

Off The Record: Do You Know Where You’re Going To? By Diana Ross (written by Michael Masser and Gerald Goffin)

Do you know

Where you’re going to?

Do you like the things

That life is showing you?

Where are you going to?

Do you know?

© Stuart Cross 2015. All rights reserved.

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Growth’s Hidden Killers: Business Leaders’ Top 10 Self-Limiting Beliefs

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What do Nokia, Kodak and HMV have in common? The answer is that they are all major companies that have failed. Not only that, but they are excellent major companies that have failed. Their failures weren’t a result of poor operational performance, but instead resulted from poor leadership. Each of these businesses failed to change and evolve in response to rapidly changing markets and that problem is, at its heart, a leadership issue. And, in turn, the poor leadership decisions made by each company’s executive teams reflected the invisible beliefs that each leader carried around with them.

In my 25 years working with businesses of all shapes and sizes across different geographical markets I have identified 10 common self-limiting beliefs that kill companies’ growth potential and prevent organisations from achieving their potential.

  1. Our goal is profit. Profit is not a goal; it is a constraint. The sustained success of a business is not achieved by pursuing profits but by creating products and services that customers can’t get enough of in a cost-effective way. Without the customer demand there is no company, and that should be the goal of every leadership team.
  2. The customer is always right. They’re not. In particular, customers are seldom right when it comes to creating innovative new products and services. When Renault was planning the launch of its unusual Twingo car in the early 1990s over 75% of customers tested gave the concept negative ratings. The car’s design took some getting used to and it required a collective leap of faith before the company made its most successful launch ever. If the directors had just listened to its customers the car would have never seen a production line.
  3. We want an organization of happy, satisfied workers. Wrong. Instead, you want an organization of productive colleagues. I once worked with a grocery chain that was investing $ millions on a new staff satisfaction scheme. The only problem was that when we did a bit of research we found that the happiest, most satisfied staff worked at the least productive stores. The busiest, fastest growing and most profitable stores were staffed by colleagues who were far less satisfied, mainly because they were under pressure all day to deliver.
  4. Strategy is long term. The creation and delivery of a strategy needn’t take years to achieve. In fact a new strategy can be envisioned in a matter of hours and its delivery can be achieved within months not years. At one business I worked with, we established a new strategic ambition and direction in a two-day session, including a 4-year goal to profitably double its level of production. Immediately following that meeting managers and executives began making decisions consistent with the new strategy and the business had delivered a 30% performance improvement on its new #1 goal in less than 12 months.
  5. 100% quality is mission-critical. Pursuing 100% quality is self-defeating in three ways. First, it is likely to cost too much. Second, it takes too long to achieve. Third, it inhibits you from taking the risk of launching 90% quality products with the potential to inspire, engage and attract more customers. The only mission-critical factor you need to consider is your ability to deliver innovative new products and services faster than your rivals.
  6. Only implement what your organisation has the capability to deliver. If that was true no company could ever truly innovate. Let the strength of the new ideas you’re your business direct the capabilities you need, not the other way round. Find new people with the skills and talents you need, partner with other organisations, and use the innovation process to build the capabilities you need. Even Procter & Gamble, the consumer goods giant, now aims to source over half of its new product ideas from outside the company.
  7. Fail to plan and you plan to fail. I much prefer the army’s adage, “Plans rarely survive contact with the enemy” or, even better, Mike Tyson’s quoate that “Everyone has a plan – ‘till they get punched in the mouth!” In other words, success doesn’t go to those companies with the best plans, but those that are able to repeatedly act, learn and adapt quicker than their competitors.
  8. Reward success. Everyone wants success, but if that is all you ever reward you are unwittingly reducing the level of risk-taking in your company. Your people will only ever do anything if they know it will be successful. Instead, you need to reward behaviours, rather than simply results. Have a reward for the best idea that failed, for example, or talk about a glorious failure that brings to life the attitude and behaviours you are trying to embed in your organisation.
  9. Downturns are dangerous. When markets decline and times get tough the natural reaction is to batten down the hatches, cut costs and reduce investment. Yet, the evidence shows that a totally different approach is required. A study of 1,000 businesses clearly demonstrated that the companies that performed best in the years following a 1990s recession were those that had continued to invest in marketing, maintained their appetitie for acquisitions and continued to innovate. The winner of the Tour de France doesn’t build a lead going downhill – all the cyclists go at a similar speed on these stretches. Instead, the winner makes his move on one of the tougher climbs in the race. Similarly, it is in difficult market environments that you can move to accelerate the growth of your business.
  10. Only operate in attractive markets. Business leaders are attracted to high growth, profitable markets. This seems natural, doesn’t it? Who wouldn’t want to expand their business operations into China. The only trouble is that you are far more likely to make profitable returns if you are advantaged in an unattractive market than if you are disadvantaged in an attractive market. The critical success driver is building and exploiting your sources of competitive advantage, not merely investing in supposedly attractive markets. Vodafone pulled out of China and Tesco exited the US market, for instance, after both companies had invested £ millions without creating any clear advantages. Compare that to Ryanair’s ability to consistenly deliver profits in the tough, unattractive European airline business. The difference is Ryanair’s business model is based on a series of distinct competitive advantages rather than the hope that involvement in a strong market will lead to success.

Which of these beliefs do you and your company’s leaders hold? And what new growth ideas could you identify and deliver if you challenged and removed these self-limiting beliefs and growth killers?

© Stuart Cross 2015. All rights reserved.

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Business Rocks – The Key To Running Faster

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This week’s riff: I love coaching my U9 football team and am always looking for ways to improve my coaching skills. As a result, last week I attended the FA’s Coaching Conference at St George’s Park, the FA headquarters. One of the workshops I went to was on sprinting and movement technique. At one point the coach had a group of children jogging lightly on the spot. He then asked them to move their arms faster but to jog at the same pace. Of course, the children found this impossible. As their arms accelerated their legs couldn’t help but follow.

In business many managers are focused on ‘increasing sales’ or ‘growing profits’. This is the equivalent of demanding that someone run faster. Instead, you should focus on the actions under your control that you know will drive sales – the equivalent of moving your arms more quickly. At one opticians business I worked with, for instance, we focused on increasing the number of eye tests as the key to driving sales and profit, while at a bathroom manufacturing client, the company’s ability to guarantee overnight delivery of its entire range was the critical driver of its success and growth.

So how about you? What is the key driver of growth that you could focus on to deliver your growth ambitions and to run ahead of your competition?

Off The Record: Run Rudolph Run by Chuck Berry

Run, run Rudolph, Santa’s gotta make it to town

Santa make him hurry, tell him he can take the freeway down

Run, run Rudolph, reelin’ like a merry-go-round

© Stuart Cross 2014. All rights reserved.

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Business Rocks – Your #1 Goal

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This week’s riff: If you’re the leader of a business, what’s the most important thing you can do to deliver success? My answer is that your most critical task is to set the challenge for your organisation. Establishing a #1 goal – a single, quantitative performance target – that sits over and above all of your other objectives provides cut-through and focus for everyone to help deliver.

For the past few years, for instance, I have been working with the executive team at Topps Tiles. One of our first tasks was to clarify the retailer’s #1 goal, and the team settled on to profitably grow market share from 25% to 33%. In a little over three years, their share has already exceeded 30% and is on-track to achieve the 1/3 share goal. Over the same period profits have doubled.

Topps Tiles’ CEO, Matthew Williams, said, “At the time establishing a single and measurable #1 goal felt a little scary, but in reality it has helped align our people, made decisions easier and got our collective competitive juices going to enable us to make it happen.”

As you take your Christmas break, why don’t you think about potential #1 goals for your business and in January work with your team to settle on a preferred goal and then build your strategy and lead your people to make it happen?

You can find out more about our work with Topps Tiles here, access our archive of articles here or contact us to find out more.

Off The Record: Move On Up by Curtis Mayfield

Just move on up

And keep on wishing

Remember your dreams are your only schemes

So keep on pushing

© Stuart Cross 2014. All rights reserved.

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Case Study: Growing Share and Profits at Topps Tiles

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Situation

In 2011 the executive team at Topps Tiles plc were looking to refresh and strengthen their strategy and identify new avenues for sustainable growth

Our role

Since 2011 Morgan Cross Consulting has worked with the executive team to

  • Identify and embed a clear, #1 strategic goal for the business, that would drive ongoing strategic decisions and actions. The goal selected was to profitably grow market share from 26% to 1/3 of the UK domestic tile market
  • Establish focus around the retailer’s core competitive strategy, ensuring that it can deliver its sales and share growth ambitions. The strategy has been summarised as “out-specialising the specialists”. This meant delivering competitive advantage in three areas; customer inspiration, multichannel convenience and range authority.
  • Agree specific strategic initiatives and priorities for action, enabling the organisation to deliver the competitive strategy and achieve the #1 market share goal

Results

Topps Tiles’s market share has grown from c.26% in 2011 to over 30%  by the end of 2014, and is on-track to achieve the 1/3 goal. Alongside this success, sales have grown 14% to £200 million and pre-tax profits have more than doubled to £17 million.

Client Testimonial

The successful delivery of our strategy has resulted from the hard work and efforts from all our colleagues across the organisation. Among other things, working with Stuart Cross helped us define a clear and specific goal that galvanised the entire organisation and has been a key part of our success. At the time, establishing a single and measurable #1 goal felt a little scary, but in reality it has helped align our people, made decisions easier and got our collective competitive juices going to enable us to make it happen. Quite simply, we wouldn’t have achieved these results without a #1 goal and I would recommend Stuart Cross to any executive team looking to create focus and growth for their business.” Matthew Williams, CEO

© Stuart Cross 2014. All rights reserved

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