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Knowledge framework for growth

Module 6: Knowledge framework for growth

Risking current stability in their business to attempt growth can be a confronting task for many CEOs. Some think of growth as something mysterious, others think it has more to do with luck that strategy. The truth is, many more companies could grow, if only the CEO knew how to lead and manage growth.

The good news is that by leveraging a proven business growth framework, CEOs can identify the decisions they need to make to lead and manage their company through sustainable growth.

The Knowledge Framework for Growth, developed by Dr Jana Matthews, ANZ Chair in Business Growth and Director of the Australian Centre for Business Growth at the University of South Australia’s Business School, helps CEOs, MDs and their executive teams understand how to lead and manage a growth company. Its components are outlined below. They are most relevant when a company is in Initial, Rapid and Continuous growth phases.

Spanning the whole Knowledge Growth Framework is strategy. The strategy you choose (being the low cost provider, or having a differentiator, or being focused on a specific market) will influence what kinds of products and services you develop, your marketing and channels, pricing, financing, and the people you hire.

1. Building an awesome organisation

Most of the challenges a company experiences are organisational (i.e. a weak culture, under-performing employees, a dysfunctional executive team, no plan, inattention to financials, inadequate systems, or a CEO who does not understanding his/her roles and responsibilities as leader).

For a company to be successful, you need to understand how to:

  • create a culture that supports growth
  • hire the right people into the right roles (preferably people who can grow and be promoted at least two levels)
  • have a well-functioning executive team and a well-defined planning process.

By leveraging a proven business growth framework, CEOs can identify the decisions they need to make to lead and manage their company through sustainable growth

The CEO is responsible for ensuring that the mission, values and vision are communicated and embedded within the organisation. They are also responsible for having the right organisational structure in place (systems, processes and procedures) to support the company as it moves through different stages of growth.

2. Products and services

Every company begins with a product or service that the founder thinks someone wants – indeed, the survival of the company depends on getting that product-market fit right. This part of the framework covers the many factors that relate to the production function (i.e. what products or services you offer, as well as how you design, manufacture and produce them).

As your company grows, you need to adapt to changes in your market and keep re-assessing your products and services to make sure they meet customer needs and are developed with stakeholder feedback. Your production function needs to be efficient and effective and you need to make sure that your delivery mechanisms work for the company and the customers.

The survival of the company depends on getting that product-market fit right

3. Marketing and sales

It’s about having a game plan to reach your ideal customers

Some CEOs think marketing and sales equals a brochure, a website and a business development/sales person. Actually, it’s about having a game plan to reach your ideal customers – and then ensuring that you deliver your product/service in line with your brand promise.

You need a marketing and sales strategy and plan to ensure that you are reaching customers via the appropriate channels (direct or indirect), that your sales process is efficient and effective, and that your pricing strategy makes sense for the customer and the company. Recognising the value of your brand and having strategies in place to increase visibility and credibility is also an important part of marketing and sales.

4. Financing growth

Financing growth is all about how you make money, manage your balance sheet, and figure out how to use debt or equity financing to fund growth. In other words, you need to decide where, and under what conditions, you will get the money needed to finance growth.

Most companies grow through debt financing (borrowing from the founders, family trusts or banks). But there are other ways to finance growth, including equity investors, government grants, strategic partnerships or reinvesting profits. It’s critical to understand your business model and how you make money to be able to manage cash flow, and to have budgets and financial controls in place.

It’s critical to understand your business model and how you make money to be able to manage cash flow

5. Managing me

The “managing me” component of the Knowledge Framework for Growth explains how a CEO can manage all their demands. Most CEOs find it difficult to get enough sleep, exercise, and eat well, manage their ups and downs, and maintain the “quiet confidence” needed for their employees – and at the same time be a good spouse, parent, son or daughter – and be a good community citizen. Taking care of yourself (mind, body and soul) throughout growth is critical to being an effective, stable, and balanced leader.

6. Externalities

It’s easy for CEOs to work “heads down, tails up” in their company and be so consumed with daily operations that they are only marginally aware of the externalities that could have a positive or negative impact on their business (including regulations, competitors, exchange rates, technology changes, etc). As CEO, you need to track those things that are out of your control but could have a serious impact on the business, and not be blind-sided by them.

As CEO, you need to track those things that are out of your control but could have a serious impact on the business

Now that you have been introduced to all components of the Knowledge Framework for Growth and how they work together, you can see how CEOs and executive teams build companies by design, instead of by chance. To find out more, read on.

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