The Analytical CEO – the Blocked or Negative Growth Transformation Case

Company transformation is a recent buzz phrase.  What does it mean?  What’s involved?

Transformation, in our terms, means taking your company to a safer place and one where the company is more capable of sustainable growth.  Which implies you need to find out:

  1. Where you are;
  2. Where you want to be;
  3. And how to get from A to B.

In this blog we’re going to talk about Blocked or Negative Growth companies.  The symptoms are straight forward; you’re exposed to changing markets which leave youGrowth Map with a falling customer base.  With that usually comes a fall-off in the size of average sales and of margins.  Which, in turn, means there will be growing cash flow pressures.  This is not a good place to be.

The Growth Map, opposite (Sector 4) shows the case of companies which have capacity to supply but are lacking opportunities (willing customers).

Are you in this space?

Our GrowthMentor Assessor helps you find out where you are (link on Home page).  If you complete the 10 minute process you’ll end up with a diagram which could look like this if you’re in Sector 4.  The example company has strength in Production & Delivery, reasonable Goals, and reasonable Corporate Support (company-wide management).  But its Sales & Marketing is weak and its Future Development is very weak.  There are no prizes for guessing what the for company survival.  Transformation is required.Assessor - B&NG

The instinct of companies in this situation is to immediately strengthen the Sales & Marketing arm of the company
.  Got to get customers!  Need more Marketing!

But, if the problem is falling or changing customer demand, there’s not much point in flogging a dying horse.  What’s really required are new ways to find and serve customers through Opportunity Generation (finding and validating new opportunities) and Customer & Product Development (converting these opportunities into high-margin, readily saleable products and services).  Straight forward?

Not straight forward, at all.  This calls for transformation – a change of direction and a new pathway.  Which could involve new skills, new investments like R&D and plant, and a new business model.  So you need to start at the beginning – not in the middle.

What do the company’s shareholders want?  How do they want to get there?  How do they want to see the company managed?  What sort of investments are they prepared to make?  In other words, you need to re-orient and update your Corporate Support.  Then, you can more safely tackle Future Development.  Which will lead to a new Sales & Marketing view of the world.  And possibly require you to change your Production & Delivery as well.

So, to sum up:

  1. You can find out where you are using the Assessor on our Home Page and by thinking about the Growth Map above;
  2. If you’re in the Blocked or Negative Growth Sector, you need to navigate to the Sustainable Growth Sector by increasing your Opportunities while retaining your Capacity;
  3. But you need to creep up on the Future Development space by resisting the temptation to just throw Sales & Marketing at your current customers.  Instead you need to back off and re-orient your company’s basic direction first.  From that Future Development and new Sales & Marketing campaigns follow.

Is this easy?  No it’s not.  But it’s likely to work better than any other strategy.

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