“The Strategic Piece” series looks at the hidden issues and topics that can challenge a business, add value, or point to a leading indicator that’s a story about a new customer behavior, trend, or market shift that’s developing and could impact the way we do business in the future.
In Part 2 of “The Strategic Piece” on leading indicators, also known as stories that haven’t been validated as facts, could dramatically shift elements of your business, and change assumptions you’re taking for granted about your business. We’ll discuss benefits as insights for growth, why it matters more than just scaling a company, and how one company is navigating this. Read Part I where we discuss why caring about stories matter just as much as a focus on lagging and current indicators.
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Growth, Not Scale
Business Growth_Photo Credit: Canva.
Nod your head if you’ve listened to a podcast, watched a TV business program, or heard a CEO on a radio interview talk about the desire to scale their company. In business-speak we understand he or she wants to grow their company to a distinctive, relative size, extent or degree.[1] If you fall into that category – wonderful. Yet, I think we often equate scale with growing a company because many of us use it as a yardstick for measuring success.
Newsflash – not every CEO wants to scale their company. You can be successful without scaling your company.
What everyone should focus on instead is growth – regardless of whether you want to scale your business – and, especially if you want to remain the same size company or want to build a sustainable business.
What’s the difference? It’s how we define growth.
Growth
The definition of grow we’re familiar with is “to increase, expand.”[2] Growth “is a stage in the process of growing.”[3]
We’re accustomed to discussions and actions that focus our attention on growth – looking at our lagging indicators such as ROI (Return on Investment) or EBITDA (Expense Before Income Tax Depreciation and Amortization) which memorializes our past success. We evaluate our current indicators like cash flow of current products on a weekly basis to validate we’re on track to drive enough revenue from the products for continued success.
What we are missing is a focus on stories, which are leading indicators that provide a window into the future. These stories could significantly change the way your business operates. This is where the definition of grow is important.[4]
“To promote the development of; to pass into a condition – become.”
Growth has usually meant expanding the company footprint into another market, deepening relationships with current customers, or acquiring new customers. What it also means is the development or creating new skills internally that allows the company to grow.
Insight Stories
Follow-Me-Home. Photo Credit: Canva.
Intuit, known for Quicken and QuickBooks, personal financial and small business accounting software solutions, respectively, incorporates the stories as a critical roadmap for their growth strategy. Thirty-seven years ago, Intuit started off with Quicken software. When they talked with customers, they learned customers were using the personal software at work. It didn’t make sense why they were balancing their checkbook at work. To discover the reason why, Intuit instituted a “follow-me-home” program with their customers.
What the insightful stories told them was customers were using their software as a workaround to solve another problem – to run their business. It also opened their eyes to another opportunity. This led Intuit to develop QuickBooks.
As the company grew during the 1990s, it’s focus changed. Less time spent on understanding the customer and more time fixing product bugs. They acquired a tax prep company and were almost acquired by Microsoft. The failure of the Microsoft acquisition and later direct competition from
Smartphone and Apps. Photo Credit: Canva.
Microsoft in the personal financial software space motivated Intuit to cannibalize their DOS-based applications and deliver them as web-based solutions.
Yet, when the smartphone was developed in 2007, Intuit recognized in 2012 the average small business used between 16 to 22 apps and they had only developed three apps. While the CEO recognized the need for change, the management team wasn’t on board. They didn’t see mobile apps as the path to pursue because they couldn’t see how to monetize mobile. Intuit went back to basics.
He required the management team to reach out to executives at companies that had figured out how to do it. Based on those conversations, the management team was on board, creating over 1,400 apps and developed what some call an Intuit ecosystem for customers, accountants, and app developers. They
Cloud Computing. Photo Credit: Canva.
also decided to make the move to cloud-based computing and move all of their software products to this platform, cannibalizing their current product line.
In 2017, Intuit dove in to deeply understand the new stories around such topics as data analytics, AI, and
machine learning. What they’ve learned has led to incorporating AI into all of their products to eliminate repetitive tasks and identifying mistakes that cost money and patterns amongst the billions of transactions. New products have been developed to help small businesses hold on to their money until it’s distributed on payday and to stand up a new line of business called QuickBooks Capital. This business line provides access to capital for small businesses that normally wouldn’t qualify.
Intuit’s willingness to embrace change and focus on stories paid-off. In 2012, they had revenue of $3.8B.
AI. Photo Credit: Canva.
By 2019, their revenue was $6.8B. For the decade, their stock price was up 850%, achieving double-digit growth every year since 2017. That wasn’t by accident. Attention to insight stories has contributed to their growth engine.
If you’re grappling with how to grow your business and you’re ready to pivot, take the Growth Assessment and let’s talk.
In Part 3 of “The Strategic Piece,” we’ll share how you can embed stories into your business.
[1] Merriam-Webster Online Dictionary.
[2] Ibid.
[3] Ibid.
[4] Ibid.
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