Profitable Growth is Everyone’s Business: Book Summary

The days of ruthless downsizing and drastic cost cutting are long gone. Today, companies have realized that the best way to make a profit is only through growth – profitable growth. In this book, author Ram Charan provides 10 tools anyone can use to overcome obstacles and achieve profitable growth.

These tools are:

1. Revenue growth is everyone’s business, so make it part of everyone’s daily work routine.

2. Hit lots of singles and doubles, not just home runs.

3. Look for good growth and avoid bad growth.

4. Dispel myths that inhibit both people and

organizations to grow.

5. Flip the idea of ​​productivity by increasing

income productivity.

6. Develop and implement a growth budget.

7. Strengthen upward marketing.

8. Understand how to cross-sell effectively (or value/solutions sell).

9. Create a social engine to accelerate revenue growth.

10. Operationalize innovation by turning ideas into

income growth. One of the most critical points discussed

it is the need for a reorientation of thought. Most

entrepreneurs and executives think of growth as

“home runs” and most of the time they ignore the “singles

and doubles.” Managers often look forward to the big

breakthrough or the great new product inadvertently

that home runs don’t happen everywhere; sometimes,

it won’t even happen in a decade.

Instead of aiming for that big home run, aim for singles and doubles. This is a safer and more consistent path. Of course, it’s important to note that when aiming for singles and doubles, home runs shouldn’t be excluded. These singles and doubles come from an in-depth analysis of ALL the fundamentals of a business.

Another factor to consider is the difference between

good growth and bad growth. Managers must dispel the myth that growth in any form is a victory. Although growth (both good and bad) generates revenue, only good growth not only increases revenue but also improves profit and is sustainable over time.

Bad growth, on the other hand, lower shareholder value.

Reckless mergers and acquisitions are examples of bad growth. Cutting prices to gain market share without cutting costs can also be detrimental to the health of your business.

Here are some questions that can help you diagnose whether or not you are part of a growing business:

1. What percentage of time and emotional energy does the

management team typically dedicated to revenue growth?

2. Are there only exhortations and do you talk about growth or is it

is there really follow up?

3. Do managers talk about growth only in terms of home runs? Do they understand the importance of singles and doubles for long-term sustained organic growth?

4. How much of each management team member’s time is spent making effective customer visits? Do they do more than listen and seek information and then try to “connect the dots”?

5. Does the management team come into contact with the end user of your product?

6. Are people in the business clear on what the

will be the future sources of revenue growth? You know who?

it’s responsible?

7. Would you characterize your company or business unit?

Culture as cost reduction or growth oriented? If the answer is one or the other, you should start doing both. Do people in leadership positions have the skill, drive, and determination to grow revenue?

8. Does the company practice revenue productivity? it does

Think about whether there are ways to use current resources more effectively to generate more revenue?

9. How well does your sales force extract intelligence from

customers and other players in the market? that’s good

Is this information communicated and applied by other parts of your organization, such as product development?

10. How good are upstream marketing skills, that is, the ability to segment markets and identify consumer attributes, in your business?

About the Author:

Ram Charan is co-author of the landmark Fortune article

“Why CEOs Fail” and advisor on corporate governance, CEO succession and strategy implementation. He was named Best Teacher by Northwestern’s Kellogg School and Top Rated Executive Educator by Business Week. He is the author of Boards at Work, co-author of Every Business Is a Growth Business, and a frequent contributor to the Harvard Business Review. (6/2000)