Profitable Growth 401 - Execution

This is the final posting in this four part series on steps to achieve profitable growth, it’s also my final posting for AllBusiness.com on Business Innovation and Growth.  It’s been great fun and I wish everyone out there the best. 

The four steps I have found that work the best for organizations of all types to grow profitably are:

1. Understand the Current Condition and Confront the Facts
2. Develop a barebones strategic plan focused at growth
3. Innovation and finalizing the growth plan
4. Execute, monitor and revise the plan

Without the first two steps, it is very difficult for any organization to find credible ways to innovate in products, services or to successfully find new markets.  It’s also difficult to develop a good growth plan if the current condition is not addressed at the beginning or if there is no underlying strategy or plan to guide the business.  It should be obvious that organizations can’t execute if there’s no plan focused at how to grow profitably.

What is Profitable Growth?
Peter Drucker famously said that the two and only two functions of a business drive profitable growth: innovation and marketing.  They are the only parts of the business that add value, everything else is cost. 

The times have changed for most businesses in the recently.  No longer can a strategy be developed to defend the status quo.  The world, markets and customers are simply changing too fast.  In other words, “what got you and your company here, won’t get you there”.  Change is unstoppable, competitive advantage decays, customers needs evolve, products and services are disrupted continually.  Therefore, companies need to understand that Strategy is Innovation, and they both must focus on profitable revenue growth.

What is Execution?
Consider the following shorthand:

• Execution = Shipping It (take a look at Seth Godin’s ShipIt Manual)
• Execution = the Deming Cycle
• Execution = Learning, Adjusting, Monitoring, Changing
• Execution = Oxygen for Innovation and Growth

Don’t confuse execution with the tactical part of your plan, execution is much more complex and strategic than simply tactics.  Here are a few suggestions on innovation and execution from The Other Side of Innovation: Solving the Execution Challenge:

Build the right team:

• Divide the labor - bring in a mix of outsiders and internal staff
• Assemble a dedicated team - find the right roles for each team member, act like you’re building a new company with every innovation project that is launched

Manage the partnership

• Manage a disciplined experiment:
• Formalize the experiment that is being studied - the hypothesis of the initiative that is being explored
• Breakdown the hypothesis - be clear, focus on conversations not spreadsheets
• Seek the truth - understand biases, expect contradictions, focus on accountability

And most importantly of all, find the right innovation leader to drive the execution side of the new business initiative, and who can:

• Get the initiative off to a good start
• Communicates back to the core business of the company
• Focuses on the learning aspects of the initiative
• Shapes the end game

Good luck to all and get out there and innovate and execute, profitable growth will be the result - Charlie

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Charlie Alter specializes in Business Growth, Innovation, and Coaching.  Follow Charlie on Twitter at: https://twitter.com/#!/cpalter or check out https://bentbrookadvisors.com.