The pitfalls of a growth goal
as a business strategy

Many companies decide they want to grow at one point or another.

Here are a few things to watch out for.

Proceed with caution.

You can’t necessarily force growth to happen

Seems obvious when I say it that directly, doesn’t it?

The desire to grow isn’t a unique position.

If you knew ahead of time that you could put X dollars into something and get some multiple greater than 1 out of it, don’t you think most people would go for it?

And don’t you think most of the sales and marketing people that definitively knew with any certainty ahead of time would be retired on an Island long ago?

Growth is a wildly complex endeavor, with human behavior, market forces, resource efficiency, and complicated algorithms in the mix.

Lots of unknowns that you can’t predict ahead of time.

Forgetting this reality will get you into trouble.

A goal to grow means nothing without an experimental plan

As an executive, saying “we want to grow by 50% in the next 4 years” has no legs to stand on. In fact, its really just a business desire, not a goal.

A goal contains some level of understanding of how you think you might get from A to B.

Just because you set the desire, doesn’t mean you can get there (nor does it mean you even have buy-in to try).

In addition, even after you have a plan in place, you still have no baseline data to suggest what’s reasonable and what’s not.

If you think you’re going to benchmark off industry standards, or what one of your peers accomplished, best of luck to you.

Whatever those other companies did, it’s not going to be close enough for you to judge against. You don’t have:

  1. the same people,
  2. the same culture,
  3. the same products / services,
  4. the same customers,
  5. or the same history.

You’ve got to bootstrap yourself and learn as you go.

Once you create sufficient detail in the way of goals and a plan, if you’re paying attention you’ll realize what you’ve got (at best) is a worthwhile experiment.

Growth goals are often confused as a “marketing thing” or a “sales thing”

To be sure, it’s both, but more importantly, it’s much more than that.

It’s an entire business thing.

Leadership, engineering, HR, IT, …. If the vast majority of your company isn’t bought in on this desire and contributing to this as one team marching in the same direction, don’t even bother getting started.

Motivation is super important.

Do you know what motivates your people?

Get specific about what you mean by “grow”

Do you mean top line revenue? Profit margin? Headcount? Customer base? Market share?

Getting clear on what dimension you want to grow can help add clarity to how you might try to get there.

It’ll impact your decisions around hiring, marketing, sales, and processes.

Not knowing why you want to grow can be just as problematic as not knowing how

There are better reasons to want to grow and there are worse reasons. In either case, you need to understand why because you need to be able to communicate these reasons internally to serve as motivation for others.

Some reasons to want to grow:

Market pressure

You feel like you can’t be competitive in the market forever at your current size. I consider this a solid reason to want to grow.

Professional growth

You want your people to have additional ways to grow professionally. I can be convinced this is worth it in some circumstances, but recognize the growth will leave some people behind and irritate others that already liked things the way they were.

More money

You want to increase the owner’s piggy bank. If your main objective is to make yourself more money, why is your entire organization going to get behind it? Even if you’re going to share the wealth across the org, you’d be wise to realize that not everyone is driven by more money, especially those that already have a comfortable lifestyle and good work-life balance.

Being acquired

You want to be bought out. Are you sure that growth is going to get you there? Why do you think that? Are you seeing a pattern of potential buyers all telling you that you need to grow, or did one company tell you that? You might be better off refining your business model, target market(s), or processes.

So now what?

So does that mean you shouldn’t try for growth?

Not at all.

You just want to be real with yourself about why and how you want to grow.

More than anything, this is going to be a series of thoughtful experiments.

If you approach it any other way, you’re increasing the odds of failure.

If you want to go anywhere with this, you need to:

  1. Be able to articulate clearly why it is that you want to grow.
  2. Get buy-in across the organization. If you don’t have buy-in from leadership, sales, and marketing at a minimum, do not proceed. You’ll need buy-in both at the motivational stage, and then buy-in again once you have an experimental plan to work from.
  3. Get specific about how you want to grow. Are you going to sell new things to the same customers? The same things to new customers in your market segment? New things to a new market segment? What sales channels are you going to focus on? What marketing methods? Do you have well-defined niches (see Why you need a niche)?
  4. Create experimental sales and marketing plans around this (see The problem with marketing plans and what to do instead for the marketing side of this).
  5. Experiment: start small, measure, iterate.

If you’d like to chat about your interest growth experiments, feel free to reach out for an outsider’s opinion on where you stand.

Yes, let’s chat

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