Before boarding what was to be a long flight across the Atlantic several years ago, I stopped in an airport bookstore looking for something to read. After scanning the standard fare on "leadership" I decided to purchase a book with an unusual title, "The Alchemy of Growth." (Baghai-Coley-White, Texere Publishing)
It turned out to be a good decision.
If you're unfamiliar with the term alchemy it's "a power or process that changes or transforms something in a mysterious way." (Merriam-Webster)
As most businesses and nonprofits are constantly looking for ways to grow--more customers, more markets, or more donors, etc.--understanding just how transformational the right process can be is an important insight to have in strategy development or tactical change.
Think how much time and money are spent annually on strategies, planning retreats, incentives, and brainpower, all attempting to make growth happen. What tends to be left out of the conversation is the relationship between process and results--and how much can't be known.
Growth comes from where?
Whenever you read about a company on a growth trajectory it helps to dig a little deeper and understand why and how that's happening. Two decades ago, when the "Alchemy" book was published, most growth in the for-profit sector came as a direct result of four things (mostly the first two on this list):
- Mergers and acquisitions
- Creative accounting
- Increase in revenue from existing customer base
- Increase in customer base
The last two items, increasing revenue from current customers and a bigger customer base, are the results of hard work. Pay attention to companies who grow from Nos. 3 and 4.
Here's a lesson from the book that's potentially worth a lot of money: A single-pronged strategy is insufficient to achieve sustained growth.
Avoid focusing on one aspect of strategy to the exclusion of other opportunities. Focus is good but not if it limits your vision for other possibilities.
What underpins sustained growth?
The authors say the long-term is realized by having a continuous pipeline of initiatives. Keeping other ideas alive helps the pipeline stay full with new growth engines ready when the existing ones begin to falter--and falter they will.
What's the problem in making that concept work?
Being pre-occupied with existing operations is one answer. Another is that leadership often lacks a way to talk coherently about current operations, new products coming on stream, and future options--all at the same time.
Stewarding the pipeline
The art of managing the pipeline comes through a disciplined and focused effort. Most fail at this point. Even having a list of promising ideas can be a false sense of security since there's nothing tangible until action is taken.
The authors state that the leadership task is to nurture promising options while excising those with diminishing potential.
It's management's responsibility to steward the pipeline--for the short, medium, and long-term future.
Up next: What should be in the pipeline?
(C) Bredholt & Co.