With wildly volatile markets, irrational global competitors, disloyal customers, tumbling stock prices, and destabilizing geopolitical terrorist mayhem, it's been a rocky year. Many companies are struggling to manage change, integrate mergers, embrace global markets, and accelerate growth without confidence that their customers or employees are committed to transformation.
So what's the secret for those few who bucked the trend, like SalesForce, which recently reported 30% gains in revenue for both the quarter and year, an enviable growth rate for a $7 billion company? They generated a stunning $460 million in cash flow for the quarter in the face of intensifying competition and market uncertainty.
Founder, chairman and CEO Marc Benioff confided that even he was "surprised" at his company's results in this environment. "Very low turnover and a very fast growth rates for our size and scale. For a top-10 enterprise software company, you all know the growth rates of the big guys have slowed; negative growth rates in many cases, and here we are at a 27% growth rate in this enterprise applications market," he smiled.
Here are three sets of questions that have defined the difference between success or disaster in companies facing massive business transformation based on my one-on-one's with 30 CEOs at growth companies where I've keynoted in recent months:
- Don't Manage Growth; Drive the Disruption or Be Run Over By It. "You need to get to the future first, ahead of your customers, and be ready to greet them when they arrive." Benioff mused. Disruptive innovation doesn't just mean tech, it often involves disrupting your competitors with a new way you're approaching customer relationships, such as redefining a go-to-market strategy with your client. It's not just about making sales, but rather how you can accelerate your customers' success. The big questions are: Have you empowered customers and employees at every level to make this change happen, or have they just been asked to tolerate it? Do you have the right internal processes and employee tools in place to enable your teams to actually lead the business transformation? Have you 'disrupted' the fear of failure for 'disruptive' ideas at your company, and created management systems that celebrate (rather than punish) those who challenge business as usual? As my friend and mentor Sir Richard quipped as we created curriculum for the Branson Entrepreneurship Center, "You can't 'manage' change if your team doesn't understand how you're supporting them through the transformation. Show them."
- Don't Just Focus on the Sales Quota; Act Like You've Invested in Your Client's Business. Imagine you've written a check from your personal bank account to become a partner in your customer's business. Would you be more interested in your client's long-term prospects if your family's cash was on the line? Of course! It's your (our) money, so show your clients how you are taking risks on their behalf. For example, do your products and services demonstrate that your team knows everything that drives your clients' quality, profitability and growth? Has your team read the financial analyst reports and all the media coverage on your customers' competitors so you know exactly what they're worrying about and what's changing in their world? During my meetings with senior executives at Delphi, I learned about how they ignited growth after their spinoff from GM by leveraging their competitive knowledge of the entire automotive industry. By re-tasking software they used to help one specific product group at their customer's factories, for example, they could build a holistic picture of all the customer's costs in a broader way for that operation, and that enabled Delphi to optimize efficiencies that saved everyone time and money. There is no better way to build loyalty in a disloyal world than to understand what defines pain and profit for your customer; you should know what's turning their world upside down before you ever offer your products or services to them.
- Don't Do 'Annual' Reviews When Life is 24/7. The changes impacting your business never stop, so why do most executives wait to check in on company goals or individual performance on an annual or quarterly basis? Measurement must be continuous. Would you wait weeks or months to check your fitness if you're trying to lose weight, fight cancer or train for the Olympics? You've got to get feedback for yourself and your team so you can take action with urgency in ways that really matter if you want to supercharge performance. "The secret to faster transformation and better alignment is to have complete transparency over everyone's progress in real time," says Kris Duggan, founder and CEO of BetterWorks, the leading goal-setting software company. After 30 years coaching growth companies and developing sustainable change management strategies, I partnered with BetterWorks to close the biggest gap between success and failure for leadership teams: Great performance depends on having the right tools to manage continuous feedback, collaboration and clarity on progress. "It's like having a FitBit for your business management!" Duggan insists.
The secret to great earnings growth when the world is in turmoil is to have clear visibility and alignment about who's managing the changes needed, how they're doing, how you can help them and how to measure success 24/7 for all stakeholders continuously for every step of your transformation.