The majority of businesses are constantly looking to grow their revenues and scale their companies. Although there are some that are firmly in “lifestyle” mode and are happy to have next year be just like last year, few will admit to that.
There are a myriad of growth strategies of ever greater complexity. Whole sections of the business book library are devoted to the topic many of which clearly demonstrate the brilliance of the authors and their grasp on growth strategy.
This author is not one of them; this essay is all about a simple construct for evaluating growth strategies. And while mergers and acquisitions are a fundamental aspect of growth strategies we will leave that entire topic for another day. Instead we will explore a simple construct for proposing and evaluating them using a simple two by two matrix.
The Matrix
A matrix can be an extremely useful construct for understanding complex phenomena; I am not the first Shale to come up with one – you can read about a far more clever one here: TL;dr: Shale used the following matrix to understand oscillator representations in quantum mechanics:
The matrix that I am proposing for developing growth strategies is based upon these four concepts:
Current
New
Product
Market
Putting them into a matrix we find the total values are:
Current Product, Current Market
Current Product, New Market
New Product, Current Market
New Product, New Market
In a future essay we will explore these four; now let us declare – and avoid – the serious pitfall for using this matrix for strategic planning.
The Pitfall
Now we have defined a tidy way to formulate and evaluate growth strategies. But there is a significant danger: trying to do them all at once with equal vigor.
Each of these four require different strategies – in personnel, in investment, in resource management, in Marketing and in Sales. Trying to do more than one at a time will quickly exhaust resources, overwhelm personnel and sow doubt in strategic planning. The key is to carefully evaluate the matrix and pick ONE upon which to build a strategic plan. It is perfectly fine to re-evaluate a plan at some point in the future and to make a change. Just don’t get enamored with “the Pivot” (NSFW link)
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