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Profitable Growth is Everyone's Business

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Profitable Growth is Everyone's Business

  1. 2. Profitable Growth Is Everyone’s Business 10 Tools You Can Use Monday Morning AUTHOR: Ram Charan PUBLISHER: Crown Publishing Group DATE OF PUBLICATION: 2004 NUMBER OF PAGES: 198 pages Book pic
  2. 3. <ul><ul><li>The bottom-line of each company is to make a profit. The higher the earnings and the profit, the better for everyone involved. </li></ul></ul><ul><ul><li>In this book the author shows how focusing on profitable growth could be the answer. The author gives practical information that you can understand, use, and take to work with you on Monday morning. </li></ul></ul>THE BIG IDEA
  3. 4. Profitable Growth <ul><li>Ten tools for profitable growth that you can use: </li></ul><ul><li>Revenue growth is everyone’s business. </li></ul><ul><li>Hit many singles and doubles, not just home runs. </li></ul><ul><li>Seek good growth and avoid bad growth. </li></ul><ul><li>Dispel the myths that inhibit both people and organizations from growing. </li></ul><ul><li>Turn the idea of productivity on its head by increasing revenue productivity. </li></ul><ul><li>Develop and implement a growth budget. </li></ul><ul><li>Beef up upstream marketing. </li></ul><ul><li>Understand how to do effective cross-selling (or value/solutions selling). </li></ul><ul><li>Create a social engine to accelerate revenue growth. </li></ul><ul><li>Operationalize innovation by converting ideas into revenue growth. </li></ul>
  4. 5. Tools for Profitable Growth <ul><li>Why Profitable Revenue Growth Difficult To Achieve. </li></ul><ul><li>Companies turn to cost cutting methods which in the end actually undermines growth. </li></ul><ul><li>People think of growth as “home runs”, instead of concentrating on singles or doubles. </li></ul><ul><li>Improving productivity and increasing revenue are not two separate entities. </li></ul><ul><li>Reorient Your Thinking about Growth: Hit Many Singles and Doubles and Not Just Home Runs . </li></ul><ul><li>Managers always want to go for the home run, the big breakthrough, or the grand new product. Instead of aiming for that one grand home run, aim for singles and doubles. </li></ul>
  5. 6. <ul><li>Good Growth </li></ul><ul><li>Good growth increases not only revenues but also improves profits and is sustainable over time. It is profitable, organic, differentiated and sustainable, and should build shareholder value over time. </li></ul><ul><li>Bad Growth </li></ul><ul><li>Bad growth lowers shareholder value. </li></ul>Tools for Profitable Growth
  6. 7. <ul><li>Leadership for Growth: Confronting the Enemy Within </li></ul><ul><li>Becoming a Revenue Growth Leader </li></ul><ul><li>- The leader, whoever he or she is, always has an eye out for growth and “walks the talk” so that everyone can see. </li></ul><ul><li>Spreading the Word </li></ul><ul><li>- Having all the heads together helps close deals faster, encourages inter-office communication, and increases revenues without increasing cost. </li></ul>Tools for Profitable Growth
  7. 8. <ul><li>Accelerating Profitable Revenue Growth Through Revenue Productivity </li></ul><ul><li>Looking Differently at Productivity </li></ul><ul><li>- Revenue productivity is increasing revenue from the same level of cost. This is a different way of thinking from traditional cost productivity, which is usually about reducing expenses. </li></ul><ul><li>A Different Mind-Set </li></ul><ul><li>- Shift from the cost-cutting mind-set to revenue productivity. </li></ul>Tools for Profitable Growth
  8. 9. <ul><li>The Growth Budget </li></ul><ul><li>The growth budget is a plan that not only lays out how the organization intends to create growth, but how it proposes to fund that quest. </li></ul><ul><li>Building a Growth Budget </li></ul><ul><li>Develop a list of the sources of revenue growth and classify them as short, medium, or long term. </li></ul><ul><li>Note down each source of revenue growth and what it would take to make it happen. Prioritize and develop into a separate project. </li></ul><ul><li>Spell out the costs associated with each project on a quarter to quarter basis. </li></ul><ul><li>Identify which people will be assigned to key components of growth projects, what their accountabilities are, and how often they will be reviewed. </li></ul>Tools for Profitable Growth
  9. 10. <ul><li>Pinpointing Opportunities for Profitable Revenue Growth Through Upstream Marketing </li></ul><ul><li>The ability to create or pinpoint the specific needs of chosen customer segments and satisfy them on a profitable basis better than the competition. This not only creates profitable revenue growth, it is also a competitive differentiator that creates long-term value. </li></ul><ul><li>Getting Unfiltered Information </li></ul><ul><li>- The first question we should ask ourselves is, “Who are our customers?” Answering this question means understanding every link in the demand chain – from wholesale stores, to retail stores, to the customer who will ultimately buy and use your product. </li></ul>Tools for Profitable Growth
  10. 11. <ul><li>An Underutilized Asset </li></ul><ul><li>- Your salespeople can be an amazing source of information and revenue. Here are five questions you may want to ask them: </li></ul><ul><li>Do they understand what their customers are looking for from suppliers, and how purchasing decisions are made? </li></ul><ul><li>Are they skilled at working with people at several levels, both within their customers’ organization and at their own? </li></ul><ul><li>Are they perceptive enough to see the customers’ evolving needs? </li></ul><ul><li>Once they have gained information about customer needs, how skillful are they at communicating without distortion what they have learned so that your organization can act on it, possibly providing customers with new products, new services, a new pricing structure, or whatever else is required? </li></ul><ul><li>How close is the connection - both socially and business wise - between those who produce the products and those who provide the intelligence? </li></ul>Tools for Profitable Growth
  11. 12. <ul><li>Cross-Selling: The Art of Creating a Value Proposition </li></ul><ul><li>Cross-selling is based on the idea that you can get more out of your customers by convincing them to do more business with you. </li></ul><ul><li>Creating the Value Proposition </li></ul><ul><li>- Look at the total picture of the customer and then work backward to create a value proposition in a language that the customer understands. </li></ul>Tools for Profitable Growth
  12. 13. <ul><li>Creating the Social Engine of Revenue Growth </li></ul><ul><li>a structure that allows information to flow in the right channels throughout the organization. This is more than simple communication – it is information flow. </li></ul><ul><li>Four elements: </li></ul><ul><li>1. It is unfiltered. </li></ul><ul><li>2. It is timely. </li></ul><ul><li>3. It is simultaneous, not sequential. </li></ul><ul><li>4. It is to the point and presented so that people can see how it is relevant to them. </li></ul><ul><li>Converting Innovation into Revenue Growth </li></ul><ul><li>Innovation is a largely social process. This process should be firmly integrated into the way the company does business everyday. </li></ul><ul><li>Five components – ideation, selection, nurturing, launch, killing failures early. </li></ul>Tools for Profitable Growth
  13. 14. <ul><li>Ideation </li></ul><ul><li>the flow of ideas that can be converted into growth on a consistent basis. </li></ul><ul><li>Selection </li></ul><ul><li>choosing the more viable of your ideas to focus on. </li></ul><ul><li>Nurturing </li></ul><ul><li>nurture an idea so that it develops, grows, and thrives. </li></ul><ul><li>Launch </li></ul><ul><li>Problems to anticipate in order to launch your innovation: </li></ul><ul><li>The launch may come at a time when funds are not available. </li></ul><ul><li>The marketplace may not be ready for the new product. </li></ul><ul><li>Key employees may not be available to help in the launch. </li></ul><ul><li>Killing Failures Early </li></ul><ul><li>can help the organization achieve profitable growth more easily. </li></ul>Tools for Profitable Growth
  14. 15. BusinessSummaries.com is a business book Summaries service. Every week, it sends out to subscribers a 9- to 12-page summary of a best-selling business book chosen from among the hundreds of books printed out in the United States. For more information, please go to http://www.bizsum.com. ABOUT BUSINESSSUMMARIES

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