How to 2x Your Current Growth Rate

23 December

The last in a series on generating growth from existing markets and products in materials, a topic on executive minds as sustainability investments disappoint.

Targeting & Changing Customer Behavior -

Key Insights

Method Focuses on Sales Conversion and Durable Results: The methodology discussed directly links to enhancing sales conversion rates, which is a key factor in jumpstarting growth in core markets..
It Has a Proven Growth Rate Boost Across Industries: The methodology has a track record of boosting growth rates consistently by 1.5-2X, as evidenced by a decade of case studies. The boost is achievable across various industries and regions, enhancing enterprise valuation by translating directly to the bottom line without the launch drag associated with new products.

In our previous posts, we looked at a powerful method for jumpstarting growth in core markets. In this post we discuss the potential payoff of doing so.

What would it mean to you to outgrow the industry average?

What would it mean to add an extra 50% to 100% of your current growth rate to the bottom line?
What would it mean to cash flow?
What would it mean to your valuation?

One key feature of the methodology discussed in this series is: its direct tie to sales conversion.

The method specifically enables novel tactics tied directly to sales conversion. In other words, it focuses organizational energy on activities that will yield results. That may be the fundamental reason it’s results are shown to be so durable.

Recalling previous case at a commercial HVAC manufacturer, sales growth restarted and the general manager (the third to attempt it) secured their job by improving the division's performance. All this done by identifying and targeting a key behavior that was shown to improve conversion rates. Here’s the case story:

A Track Record of Results

This methodology isn't new, but it's not part of the traditional playbook. Bob Lurie refined it over decades, during his time at Monitor Group and as VP of Strategy at Eastman. He outlines its principles in his book, The Organic Growth Playbook.

Developed over the last decade, there's evidence of its effectiveness. The method consistently boosts growth rates by 1.5 to 2 times. For example, a product line growing at 4% can add an extra 1.5% to 2% growth. While it won't turn a commodity into a high-growth specialty, it reliably increases growth rates, even in established, low-growth sectors.

This growth boost has been proven across various industries and regions, as shown in the sample figure below.

This growth boost has been demonstrated across industries, and across regions. The figure below shows a sample of actual growth rate changes in regions and industries where it has been implemented.

results

ROI and Valuation

Consider that unlike new products, growth improvements accrue to existing products, with known and optimized profitability. They have none of the launch drag commonly seen on new product investments, and can be realized rapidly. Growth quickly drops to the bottom line. Also consider the impact of proven profitable growth on enterprise valuation.

What would it mean to you to outgrow the industry average?
What would it mean to add an extra 50% to 100% of your current growth rate to the bottom line?
What would it mean to cash flow?
What would it mean to your valuation?

Growth Arc Advisors specializes in the implementation of the methods described in this series. We are former materials industry executives who understand the uniqueness of materials companies and have generated growth as industry operators.