The 5 Levers of Growth REVISITED: How to activate them for your business post-COVID19
Recent events have played havoc with the growth plans of almost every business. As we collectively work through the 3 phases of the COVID19 crisis – Response, Recovery and Revival – businesses are required to put greater focus on growth strategy. But they are required to do it at a more rapid pace than ever before, whilst also remaining agile enough to keep evolving as market conditions change. In the Response phase, we saw fashion houses move into making personal protective equipment for medical staff, high-end restaurants doing meal deliveries, and bank tellers retraining as call centre support staff. It was an intense period of innovation by necessity, whilst fear and uncertainty reigned. At this point in time, the businesses who have survived are sitting between the Recovery and Revival phases. We have a much clearer line of sight into the changed conditions we’ll be facing in the next 6-12 months. We also have a firmer understanding that a number of our pre-pandemic activities and behaviours will never be quite the same again. We can consider emerging key trends and scenario-plan for multiple eventualities. This makes it the perfect time to start thinking about the levers of growth with greater clarity and intention. The 5 levers of growth have not changed. What will change is the emphasis placed on one over the another due to the changed market conditions and what may lie ahead. In the article that follows we have left our original piece largely intact, explaining the fundamentals of each lever – but we have also added new commentary around the key considerations in the current business environment. As always, we like to remind our clients that the best way to respond to the future is to create it. This has never been more true, particularly considering that after every crisis we see the emergence not only of new business models but entire new systems that challenge old ones. Post-GFC saw the rise of cryptocurrency, the sharing economy and the gig economy. The courageous who dare to innovate whilst tapping into changed sentiment and behaviours will emerge the victors, with truly future-fit businesses. So as we settle into the ‘new normal’, don’t forget that you play a role in shaping what that looks like through your selected growth pathway. “Only those who will risk going too far can possibly find out how far one can go.” T.S. Eliot How to Activate Them for Your Business Post-COVID19 Levers of Growth There are 5 key levers you can use to grow your business: 1. Geography All businesses market within particular geographic regions. Those areas of focus can range from global down to individual suburbs, depending on the scale of the organisation. Large FMCG brands like Coca-Cola sell in most countries of the world, telcos such as Optus or Telstra sell their services to people and businesses all around Australia while dentists have a hyper-local market with most of their customers coming from a few surrounding suburbs. Expanding outside the geography a business currently operates in enables the acquisition of an entirely new set of customers previously outside their reach. To activate this growth lever, a company must ascertain demand in the target geography. This will entail understanding whether their existing product or service will have traction with customers there, or whether it will need to be adjusted to be more locally relevant. In the case of modifications being necessary, it’s important to weigh up any lost economies of scale, and whether the expansion will deliver an acceptable return in the required timeframe. Moving into any international market can be a very attractive proposition, but when barriers to entry are high, it may be more prudent to extract growth in known environments by activating one or more of the other levers. Done well, opening up new geographic markets can deliver fast customer acquisition and grow overall business value. NEW CONSIDERATIONS: With cross-border travel grinding to a halt during the peak of the crisis, and international travel set to resume later in 2020 and under very changed conditions, entering new territories may be logistically challenging. At the same time, there will be international markets whose own changed conditions may have created a growing demand for your product or service. In this case, do utilise digital means for establishing and building the local relationships that will be essential to you opening in those international markets. AusTrade will be your friend – use any resources they make available. Keep in mind that even pre-COVID19 there have been businesses who have established new distributorships or license agreements internationally without setting foot in the new target market, so it can be done. In the short to medium-term, national (and Trans-Tasman) growth presents lower barriers to execution. But this must be evaluated versus the return on effort versus pursuing a more complex but potentially more lucrative international expansion. 2. Distribution Channel For many businesses, the advent of digital in the early 2000’s provided new channels to reach customers. Previously limited to retail stores or face-to-face sales for B2B, companies were limited in the ways they could sell to customers. With the rise in the ‘always on’ customer, it is important for businesses to make sure their product or service is easy to buy, by being just a click or walk away from wherever customers are. To activate this, Growth Lever organisations need to make sure they have recent customer research that answers the question of where potential customers want to be able to purchase (what they say they will do) and where they might purchase (what channels they are active in). If customer behaviour insights identify channels that may drive additional sales with existing customers or acquire new customers entirely, then the business should activate these new distribution channels as soon as feasible. Some of the distribution channels available include: NEW CONSIDERATIONS: The rapid adoption of new technologies during lockdown has clearly demonstrated a greater openness to online sales platforms as well. In the fashion industry,
