Are you ready to grow?'' was a rhetorical question we posed at a recent company sales meeting.
In fact, with our current investments in manufacturing capacity and new products, the phrase has become our company's unofficial rallying cry to encourage personal growth that keeps pace with the growth of our business.
For many companies as well as individuals, however, growth is an elusive concept that is difficult to define. When pressed, few executives can characterize what ``growth'' really means to their company.
To us, growth means capitalizing on opportunities. It means providing something of value that exceeds a customer's expectations or standards. When examined more closely, these opportunities really fall into four basic categories of growth: revenue, profit, customer and people growth.
Revenue growth (i.e., ``building the top line'') usually comes from acquiring new customers or from expanding business with existing customers. It is often the most important measure of a healthy business.
Without top-line growth, there is little chance of any other kind of growth.
Each year, Hewlett-Packard Corp. generates 25 percent of its revenues from new products sold to new or existing customers. 3M has equally impressive results. How does your company compare?
Are you investing in new-product development? Are you promoting and marketing to existing customers? To new audiences? Is your marketing staff uncovering new markets, new uses, new challenges?
The old saying, ``If you are not moving ahead, you're falling behind,'' is truer today than ever before.
Increasing sales is important, but you must always pay attention to the bottom line, or profit growth.
Profit growth can be approached from several directions: higher-value products; reduction of waste; and a tightening of the new-product development process.
Focusing sales efforts on higher- value products means recognizing that your standard products can't and shouldn't do everything.
Customers often want — and need — the performance of higher-value products. Don't ignore obvious opportunities to charge a premium for a more valuable product or service.
If your research and development efforts are closely linked to sales and marketing, your reward is higher margins that come from better-performing products.
Waste reduction and resource
management are internal issues that strongly affect profitability. Depending on your margins, each dollar in increased efficiency
is worth $3 in sales.
The best efficiency programs focus on activities and products that have value for the customer. Eliminate everything else. This enables you to substantially eliminate waste while making you a stronger, more focused and more profitable supplier.
Another way to reduce costs is to leverage the expertise of suppliers. Rather than making one- dimensional, low-price demands, think big and ask for cost-saving and revenue-growing ideas.
Our company recently implemented a supply-management process that does just that. In one category — purchasing of equipment and supplies — we partner with suppliers to generate not just impressive short-term savings, but equally impressive long-term opportunities that can generate substantial revenue growth.
Finally, to grow profit, re-examine your business processes with an eye toward faster response. Improve your company's ability to identify target opportunities faster, thereby responding to customers' needs faster. Ideally, your business should be a closed loop, running from opportunity identification, to product concept, to product development, to scale-up, to manufacturing, to repeat business, and back to new opportunity identification.
Once you've identified your strategic business processes and become more efficient at making and marketing products, focus on growing your relationships with customers. Move up customers' hierarchy by better understanding their needs and goals, their competitive environment, and their people. Broaden the relationships between your organizations. Anticipate their challenges and opportunities. Sense their future direction.Make your competitors seem like mere ``vendors.''
Finally, recognize that your company is no better than the people who work for it. We all have different needs and wants. We make decisions differently. Work to develop a more collaborative organization, one better able to reach both the critical decisions and the little decisions more easily and quickly.
Every employee in your organization has an obligation to do what he or she can so that the entire company will succeed; none of us operates in a vacuum. It's up to each of us to keep it well-oiled and running smoothly.
If we do everything right and to the best of our abilities, always striving for the best practices, then we are ready to grow.
Vranesich is the director of marketing and sales for BASF Corp.'s Polystyrene Business Group in Mount Olive, N.J.