How Many Steps From the Core is Your Next Growth Initiative?

How Many Steps From Your Core is Your Next Growth Initiative? - #GetInSynk

It’s an intriguing question.

Strategy expert Chris Zook asked the audience. I could see that it challenged everyone. “How many steps away from your core is your next growth initiative”?

This audience was a room full of  entrepreneurs and many Gazelles International Coaches (I’m one). Chris Zook, from Bain, was presenting a talk entitled, “The Three Predictable Pitfalls to Growth and How to Avoid Them.” The question addressed the second pitfall. We’ll take a look at the other two pitfalls in future posts.

Scale-able Growth comes from the repeatability. Zook contends that most companies fail to leverage this repeatability by making strategic moves that are NOT adjacent to their core. Another way of saying this is that leadership takes too many steps away from what it’s good at. Go only one step away at a time, and you leverage your repeatability. He called these adjacent moves, and he listed six types of them. Each of these is just one step away from the core.

  1. New geography or territory
  2. Additional channels
  3. New value chain
  4. New customer/consumer segment
  5. Different products
  6. New businesses

These moves are each one step away from the core. Doing two of them takes you two steps way, doing three, three steps away, and so on.

Trying to do more than one step away decreases your chance to succeed.

When you try to take more than one step away from the core that has been successful, it multiplies complexity instead of just adding it. Sticking to one step away at a time, until it is mastered, is the way to grow, according to Zook. He had the data and case studies to back it up. Eighty-seven percent of executives indicated that their one step adjacent moves were much more complex than they anticipated.

He introduced “strategy on a hand,” which I found compelling. One step away is your thumb, the second step away is the index finger, the third step away is your middle finger, and so on. Don’t go further away than your thumb.

I’ll talk about pitfalls #1 and #3 in my next two posts.

 

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