Two Wall Street Journal articles from the past few days caught my eye because of their significance to what many believe is the single most important business issue for 2011 and beyond: How to achieve strong, sustained growth.
The first WSJ article reported on how US corporations are now sitting on a mountain of cash, the highest level in the last half century. The Federal Reserve reported last week that non-financial companies in the U.S. held $1.93 trillion in cash and other liquid assets at the end of September, up from $1.8 trillion at the end of June. Cash accounted for 7.4% of the companies’ total assets – the largest share since 1959.
Over the weekend the Journal also reported that President Obama is convening a CEO summit at the White House this week to discuss ways to stimulate growth – and jobs. It’s no secret that the American economy is still struggling to rebound from the worst recession since the Great Depression. The President will likely implore the corporate leaders to start investing some of that massive cash hoard to help get the economy moving again.
Re-igniting growth is the business and economic imperative of 2011. It is probably the number one challenge that we hear about from our Marketo customers every day. It certainly is the key priority of the many C-level business executives that I speak with. As that old business maxim goes, “You can’t just cut your way to market leadership.” I would also add that you can’t “save” your way to winning in today’s high velocity business environment.
What’s required is growth…more of it, and with continuously improving profitability. Of course, achieving strong and profitable growth is easier said than done, especially given the battering that companies took during the Great Recession. You can’t blame corporate executives for being gun-shy about investing again. The fact is, however, that the really smart companies create opportunities out of turmoil. Many are already moving aggressively to employ growth ignition strategies for 2011, including:
Spur Breakout Innovation – Big ideas that turn into exciting new products and services are the life-blood of business growth and success. The leadership companies that consistently deliver strong growth results are the ones that are always innovating. Even with the record-smashing success of the new iPad, you can bet that Steve Jobs is now leading his Apple teams to come up with the next product innovation that will again set the world on fire. Innovation certainly takes investment. But, it’s clear that many companies today have plenty of cash that needs to work a lot harder to produce better returns. Turbo-charging innovation is a good use of that cash. It’s also a sure fire way to grow.
Invest in Human Capital – Great innovations come from smart, committed, and passionate people who love pushing the envelope every day. High growth companies are always on the lookout for standout people, now more than ever. Of course, it’s not just a matter of finding those people. Successful organizations also focus on how to develop, inspire, and retain their best people – the big idea generators and business drivers. A truly effective growth strategy starts with investing in and nurturing world class human capital.
Replace the Dysfunctional Revenue Model – The current sales and marketing model – how companies create, manage, and grow revenue – is at best dysfunctional, at worst totally broken. To be sure, this is nothing new. Sales and marketing departments have been at each other’s throats since the beginning of the modern company. The newest wrinkle is that too many companies have not successfully made the shift from the old “push” formula of marketing (“always be closing”) to the more relevant and effective “pull” approach (“always be helping”). Today’s buyer is in control like never before. With digital media, and increasingly the social web, these buyers are reaching out to a variety of trusted sources to get the information they need to make informed purchasing decisions. Companies that have not adapted to this fundamental power shift will not even come close to optimizing their revenue growth possibilities.
At the dawn of a new year and decade, business management has a big choice to make: Seize the day to ignite a revenue revolution. Or, settle for incremental gains that are more about just surviving than truly thriving.
So, what’s your breakthrough growth strategy for 2011?