The Missing Link for Profitable Growth, Ignored by Most at the Top (and what to do about it)

In a 2023 article by McKinsey entitled The Multiplier Effect: How B2B Winners Grow, here are the five lessons for success they gleaned from a comprehensive survey of companies:

1. Deploy advanced sales technology
2. Increase hybrid sales teams and capabilities
3. Deliver hyperpersonalization
4. Tailor strategies on third-party marketplaces
5. Achieve e-commerce excellence across the full marketing and sales funnel

Be sure to go "all in," as they recommend, or risk failure.

And there you have it. All of your most urgent and expensive problems solved. End of this article.

But wait, there's more!

Odds are you've read many columns just like the McKinsey example. And while no one said their daunting list of objectives and tactics would be easy to execute, let's face it - they sound plausible in concept, but execution is a whole different animal.

Which leads us to the primary point of this article:

Tools without an overarching philosophy that senior management believes in are just expensive, time-consuming false hopes

Let's take your average CFO. How excited will she be to support the aforementioned five objectives given the associated costs of each, especially based on her core deliverable - to help the company maintain a strong financial position? "Where's the ROI?" she'll ask. "How soon will we realize the benefits? How much risk are we talking about here? What's my role in this?" (NOTE: For all CFOs, there is a stark difference between expenses and investments)

And how about the head of IT, who gets tasked with delivering the significant technology innovations necessary to pull off these objectives? He's thinking, "With everything I have on my plate right now, trying to keep all of our disparate systems functional, where am I supposed to find the time for all of this stuff? And whose budget takes the hit? Will I be getting any help? And, hold on, you're telling I'm going to have to work with Sales and Marketing on this? Ugh."

Operations, you ask? "I have multiple projects in the queue, each waiting on approval for money and resources. Why does this new direction supersede my team's needs? And how am I supposed to prepare for additional business, not being able to forecast accurately?"

Take it from someone who led $80MM+ companies, those are each real world scenarios.

What's most important to understand is this: Why those reactions from various department heads? What about the pending 'chaos' and confusion that occurs because of those reactions? And how does that chaos correlate directly to the hidden costs that will manifest directly within the P&L?

Most important, is there anything that can resolve this dangerous dilemma?

What you're about to read flies in the face of what most business owners, CEOs, COOs, Presidents, Founders and the like believe:

Every company is 100% perfectly designed to achieve current results. If improved performance is desired, then a re-design is in order. Tweaking what's already there will have minimal impact.

And when undertaking any design initiative, we take our cue from one of Stephen Covey's 7 Habits of Highly Effective People, "Begin with the end in mind."

That means, as when building anything, the Front End - the foundation - must be stronger than steel to successfully "hold up" all else that comes after.

With this in mind, and with goal of preventing subsequent disaster, here's what we recommend to all of our clients before embarking on a profitable growth journey rife with new ideas, strategies, tools, financial investments, outside consultants, etc.

1. Top management Burns the Boats and commits to a singular business philosophy. Yes, this could take the form of company purpose, "The reason why the business exists and the difference it's trying to make in people's lives." It could mean continuous improvement, as W. Edwards Deming taught the Japanese after World War II, creating one of the greatest business success stories of all time. Whatever is chosen, it's primary utility should be one of not only guiding the business, but also to provide a belief system so strong that whenever a critical business decision is about to be made, top management asks in unison, "Does it help fulfill our Purpose?"
2. Top management truly understands what Chaos is, and how much it costs the company in both hard dollars and customer dissatisfaction. The concept of 'systemic variation' is foreign to most CEOs and business owners because it's usually not taught in Masters programs ... or anywhere else for that matter. Think of it this way: What happens when C-suite executives disagree on the company's reason for being - what it actually stands for? Its direction, short-term and long-term? This is how destructive silos form, not to mention internal cliques. And flavor-of-the-month strategies. Corporate confusion and employee disengagement. And so on. The cost is astronomical, and the business graveyard is full of former industry giants who did not heed this advice, including Eastman-Kodak, Compaq, Blockbuster Video, MCI-Worldcom, Amoco, Levitz Furniture, Sears, Circuit City, Toys R Us, Polaroid, and Borders. Most often, when top management measures the hard cost of chaos, often in the form of waste and rework - often running as high as 25% to 50% of annual revenues (think about that, do the math) - only then will they embark on a front-end-of-business-process remedy, as we are recommending here.
3. Top management becomes proficient in developing Unprecedented Customer Value, not mere 'value add' or 'incremental value." The business disease that's reached epidemic proportions is Sameness, and it's a killer. Per our research, the primary cause of Sameness is that over 90% of B2B companies do not understand their customers, and not just their spoken needs - which any salesperson can uncover (which compounds Sameness) - but far more important the unspoken customer need(s). Nobody asked for the automobile, airplane, radio, television, Internet, or $6 coffee three times a day. Rather, someone saw a need and filled it. But how does this happen, you ask - to 'see' what others miss? Let's put it to you this way. First, who has an all-access VIP pass into your customer's world? That's right, the salesperson. And how many salespeople are tasked with behaving as scouts, detectives, and sleuths whose primary deliverable is to provide their company with valuable customer observations so that real insights can be developed, leading to New Truths. Take it from us, every single industry is primed to have new source code written, allowing truly innovative companies to 'Break From the Pack' and un-even their competitive playing field. But when salespeople are held accountable to sales, Sales, SALES! and knowing that that's how they're compensated, what the boss will be asking them about, and can keep their very jobs, well, you get the idea. The entire Sales and Marketing system is broken.

This is the front end of the profitable growth design process. Before taking the bait with the hottest new tool or supposed solution, we ask that you remember it is the foundation of sustainable, exponential, and profitable growth that prevents against buyer's remorse down the line.

And that foundation is The Missing Link that most top leaders will ignore, and that spells O-P-P-O-R-T-U-N-I-T-Y for you.

Sean Stormes is a decorated Fortune 500 executive; served multiple tours as a small business and mid-market President and COO; 15-year proven performance management consultant; accomplished keynote speaker; published author; and nationally syndicated columnist on the topic of strategic growth.  He developed, designed, and delivered DCI’s proprietary system to help senior leadership ‘Break from the Competitive Herd’ and flourish.  As Sean is fond of saying, “DCI was developed BY business owners FOR business owners."

DCI is currently accepting applications for new Advisors (coaches). Top tier executive consultants are encouraged to reach out to Sean directly for more information.