Many businesses, even healthy ones, can benefit from a growth transformation. Growth strategies are inherently cyclical and short-lived. If a company has a competitive advantage or sales and marketing approach that is working, it will soon be copied by competitors, which will cause the growth spurt to lose steam. Economic or technological cycles also require changes to business models and growth strategies. Often a new executive or management team is well positioned to execute a transformation, because they can objectively exploit the valuable strategic assets and let go of the less valuable elements of the old business model.

We are working with the chief financial officer of a growing public company on a transformation. We've actually changed his title to chief transformation officer, because he has been asked by the CEO to take on a role far broader than traditional finance tasks. He finds himself in a highly competitive industry that's going through structural change.

Like all transformations, his is a step-by-step process. At the beginning, this approach never looks or feels good. It may seem like you are rearranging the deck chairs on the Titanic, putting in a lot of effort to reposition the company with no growth to show for it. Successful transformations are only seen as successful at the end of the process, not the beginning.

Here are four elements of the transformation this CFO is pursuing:

1.  Position the balance sheet for growth.

Our client's first task is to restructure some of the debt on the balance sheet. He needed create a better platform and a fresh start in order to fund future growth investments. Without this, any future growth efforts would be stymied in process due to lack of funding.

2.  Build the elements of a competitive offering.

The CFO can't just grow the company as it is. Its current customer offerings are, in many ways, not competitive in the marketplace. Throwing more marketing and sales dollars at a disadvantaged offering will just result in lackluster results and a poor return on investment.

3.  Scale the business.

Once the business is positioned, the client can begin the task of growing the company. However, because much of the effort and expense will have been incurred by this point, the CFO will find himself in a do-or-die situation to grow the company.

4.  Grow profits and value.

Shooting for profits before revenue growth is established implies cost-cutting, not growth. After demonstrating evidence of customer and revenue growth, which is especially important in this case as a public company, the CFO can begin to focus on profit growth. By establishing a track record of top-line growth, he can then begin to shift the organization's focus toward growing the company's valuation.

Time (and results) will tell whether this transformation is successful. By that point, it probably will be time for another growth transformation to begin.

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