by Tiffani Bova
ADVANCE PRAISE FOR
GROWTH IQ
“This book captures the essence of how to consistently grow an enterprise through relentless customer focus . . . Tiffani Bova is the quintessential storyteller . . . leading us through a framework that gives structure to our growth strategy. As a founder, some of these things are innate . . . but this book is a valuable tool to inspire my leaders throughout each of our businesses. It made me giggle, too. I remember my CFO asking as we hit our growth stride, “What is it that worked?” The answer, of course, is everything. We are in the 1 percent game now, looking and seeking growth of 1 percent from each of our initiatives—combined they deliver double digit growth annually. Thanks, Tiffani, for writing this down . . . a guide book for all leaders to inspire those around them.”
—Naomi Simson, shark on Shark Tank Australia, founder of RedBalloon, cofounder of Big Red Group
“Whether you’re planning to disrupt an industry or protect your company from competitors, Growth IQ shows how urgent it is to choose the right path. This choice can be overwhelming but Tiffani simplifies your options into ten proven paths and empowers you to embark upon the right one for you with confidence . . . and results. Our love affair with comfort zones can be our downfall; Tiffani reminds us that almost all the good stuff happens when we venture off the well-trodden trail into uncharted—and therefore uncertain—territory. With her guidance, we discover that the uncertainty need not be so daunting—through examples, savvy, deeply-experienced analysis and synthesis, and valuable checklists, Tiffani will provide a bump to anyone’s Growth IQ.”
—Whitney Johnson, Thinkers50 management thinker, author of Build an A-Team and Disrupt Yourself
“A worthy successor to Michael Porter, Bova’s book is that rare gift: It opens doors for new ideas and new actions. No glib answers here, simply hard-won wisdom that will provoke big changes for organizations large and small.”
—Seth Godin, author of Linchpin
“Too many companies foster cultures of burnout in the pursuit of short-term growth as an end in itself. Smart growth is sustainable growth and Tiffani Bova shows us how to maintain it by building a purpose-led culture and leveraging, instead of sacrificing, the dedication of your people.”
—Arianna Huffington, founder and CEO of Thrive Global, and founder of The Huffington Post
“We all want our business to grow, but how can we make that happen? Fortunately, Tiffani Bova is here with answers. In this smart book, she reveals ten growth paths—from creating an inspiring customer experience to disrupting business as usual. And she backs her findings with solid data and examples from thriving companies. You’ve got a choice: Tread the old paths or follow Bova into the future.”
—Daniel H. Pink, author of When and Drive
“Tiffani Bova has a knack for rendering complex insights in clear, elegant prose. Growth IQ tackles the biggest question in business.”
—Martin Lindstrom, author of Buyology and Small Data
“Look, I LOVE this book. PERIOD. Growth IQ has a crisp, clean, and invaluable superstructure. And it is well written. Those things are great, but not the basis for my love affair. The love comes from: Stories. Stories. Stories. Ten sound strategies, thirty compelling, memorable stories—from Starbucks and McDonald’s to Under Armour and Red Bull. If these stories don’t inspire you and add a ton to your stockpile of personal intellectual capital, I don’t know what will. Bravo, Tiffani Bova!”
—Tom Peters, author of In Search of Excellence
“Growth is top of mind for every company, but the path to achieving sustained growth can be elusive. In Growth IQ, Tiffani applies her deep expertise from working with the world’s top brands to light a path to growth in this era of rapid digital transformation.”
—Keith Block, vice chairman, president, and COO of Salesforce
Portfolio/Penguin
An imprint of Penguin Random House LLC
375 Hudson Street
New York, New York 10014
Copyright © 2018 by Tiffani Bova
Penguin supports copyright. Copyright fuels creativity, encourages diverse voices, promotes free speech, and creates a vibrant culture. Thank you for buying an authorized edition of this book and for complying with copyright laws by not reproducing, scanning, or distributing any part of it in any form without permission. You are supporting writers and allowing Penguin to continue to publish books for every reader.
ISBN: 9780525534402 (hardcover)
ISBN: 9780525534419 (ebook)
While the author has made every effort to provide accurate telephone numbers, internet addresses, and other contact information at the time of publication, neither the publisher nor the author assumes any responsibility for errors, or for changes that occur after publication. Further, the publisher does not have any control over and does not assume any responsibility for author or third-party websites or their content.
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This book is dedicated to my tribe, my Ohana, who have been on this journey with me since day one. Without your support, none of this would have been possible. I am forever grateful to each of you.
CONTENTS
Advance Praise for Growth IQ
Title Page
Copyright
Dedication
Foreword by Geoffrey A. Moore
The One Thing Is—It’s Never Just One Thing
PATH 1
CUSTOMER EXPERIENCE
STORY 1
Sephora: A Beautiful Experience
STORY 2
Shake Shack: Radical Hospitality
STORY 3
Starbucks: Losing the Soul of the Past
Putting It All Together
PATH 2
CUSTOMER BASE PENETRATION
STORY 1
Red Bull: A Thai Pharmacist and an Austrian Entrepreneur Walk into a Bar
STORY 2
McDonald’s: Ready, Set, Breakfast
STORY 3
Sears: Uprooting Retail
Putting It All Together
PATH 3
MARKET ACCELERATION
STORY 1
Under Armour: Sweaty T-Shirts
STORY 2
The Honest Company: Better Living Through Chemistry
STORY 3
Mattel: Toys Will Be Toys
Putting It All Together
PATH 4
PRODUCT EXPANSION
STORY 1
Kylie Cosmetics: Keeping Up with Kylie Jenner (#KUWKJ)
STORY 2
John Deere: And the “Beet” Goes On
STORY 3
Blockbuster: “Be Kind, Please Don’t Unwind Our Business”
Putting It All Together
PATH 5
CUSTOMER AND PRODUCT DIVERSIFICATION
STORY 1
Marvel: Superhero Saves the Day
STORY 2
PayPal: Banking on the Future
STORY 3
LEGO: Coming Apart, Brick by Brick
Putting It All Together
PATH 6
OPTIMIZE SALES
STORY 1
Salesforce: Four Men and Two Dogs
STORY 2
Walmart: The Ultimate Retail Matchup
STORY 3
Wells Fargo: A Rhyme Is Not a Reason
Putting It All Together
PATH 7
CHURN
STORY 1
Spotify: Winning Playlist
STORY 2
Netflix: Twenty Years Old (and Counting)
STOR
Y 3
Blue Apron: Too Much on the Plate
Putting It All Together
PATH 8
PARTNERSHIPS
STORY 1
GoPro: Adrenaline Junkies
STORY 2
Airlines: The Friendly Skies
STORY 3
Apple: Killing Me Swiftly
Putting It All Together
PATH 9
CO-OPETITION
STORY 1
Fiat Chrysler, BMW, and Intel: Joining Forces
STORY 2
Wintel: Attack of the Clones
STORY 3
Cisco-VMware-EMC: Better Together?
Putting It All Together
PATH 10
UNCONVENTIONAL STRATEGIES
STORY 1
TOMS Shoes: Heart and Sole
STORY 2
Lemonade Insurance: When Life Gives You Lemons
STORY 3
Grameen Bank in Bangladesh: On Purpose
Putting It All Together
KNOWING WHEN TO JUMP
AMAZON CASE STUDY: STAYING IN DAY ONE
Acknowledgments
Notes
Index
About the Author
FOREWORD
Geoffrey A. Moore
I HAVE HAD THE PLEASURE OF working with Tiffani Bova over the past few years. I remember when she told me she was in the midst of writing her debut book and asked for any advice. I paused for a moment to reflect on how much the world had changed over the past three decades since I wrote Crossing the Chasm in 1991. Despite the changes, were there still some universal, fundamental ideas and wisdom—“the Force,” if you will—that continue to be relevant? And if so, how would they apply to meeting the growth challenges of today?
Growth IQ provides great answers to these questions. As a former distinguished analyst and research fellow for Gartner, and now as the growth and innovation evangelist at Salesforce, a company on the cutting edge, reshaping the way the world does business, Tiffani has had numerous inside looks at successful growth strategies from a wide variety of companies. She has seen what has worked and what has not, and in Growth IQ, she shares a wealth of valuable lessons learned.
The book is organized around ten growth paths—each presented through a wealth of stories of both successes and failures, each making clear what things to focus on and what factors are critical for future success. She illuminates her core concepts with insightful stories and distills theoretical models with real-world examples that are relatable, accessible, and applicable. While a number of these growth paths may be familiar, Bova’s conceptual model of applying market context, the combination of initiatives, and the sequence in which various paths are deployed goes above and beyond to establish a new paradigm for strategic business thinking.
It is true that every business must grow to stay healthy and relevant, and all the successful ones have proven formulas for so doing. Some of these strategic playbooks have become so powerful that executives are recruited away specifically to help another company re-create a similar growth trajectory. How does Amazon do what they do? How does Salesforce? Red Bull? Starbucks? Sephora? What can these companies teach you that you can apply to your business? Being able to draw on insights like these can be truly game changing.
Growth is good for everyone in the value chain, and it should always be top of mind for business leaders. However, the truth is that finding sustainable and repeatable growth is getting harder. Sometimes we hold on to our old growth “playbook” for too long, or our world is disrupted by a more agile start-up in ways we could have never imagined.
Either way, if you are looking to accelerate growth, recover from a slowdown in top-line sales, or expand to new markets or customer segments, I recommend that you read Growth IQ. It will reveal the landscape of opportunities you may not even realize you have at your fingertips. It will empower you and your team to navigate the realities of business today. And it will give you a framework that you can revisit over and over again.
GEOFFREY MOORE
a.k.a. “The Chasm Guy”
Author of Crossing the Chasm and Zone to Win
THE ONE THING IS—IT’S NEVER JUST ONE THING
How do you stay ahead of ever-rising customer expectations? There’s no single way to do it—it’s a combination of many things.
—JEFF BEZOS
OVER THE THOUSANDS OF INTERACTIONS I’ve had with some of the world’s biggest companies, I’ve found that one of the most persistent and vexing challenges faced by executives is determining how best to grow their business. Unless you’re a small family business determined to stay small, or you are unable to take on more financial risk and workload along with their associated hiring demands, the quest for growth is never ending. While there is always a balance of high-sales and low-sales periods, an extended stall or slowdown in growth is often a cause for great concern among investors and employees.
Why? Because every company faces the same pressures—to keep the lights on, pay its people, get products out the door, and support its customers even when experiencing a low-sales period. There is no way to reduce those pressures and keep the business going without top-line growth and bottom-line profitability. Finding ways to grow the business, the top line, can become all consuming, especially for start-ups, small businesses, or even a new division of a Fortune 500 company. Every business has room for improvement, but not every business leader knows where to look for that improvement or how to course-correct and rally the company to change when times get tough.
Repeatable and reliable growth for established companies and new ventures alike is hard and seems to be getting harder. That’s true even for one of the largest and most celebrated brands in the world. In its third quarter in 2017, IBM found itself with twenty-two straight quarters of declining revenue. Ginni Rometty, chairman and CEO of IBM, noted: “Be prepared to spot growth opportunities when they present themselves—because they are the key learning opportunities. You’ll know because they make you uncomfortable, and your initial impulse may be that you’re not ready. But remember: Growth and comfort never co-exist.”
So, what can executives do? Where do they go looking for that next 10 percent of growth—in revenue, in market share, in active users, or all of the above?
I have found that most executives—armed with reams of data, consultant white papers, and market trend reports—are looking for the one new product offering, new market, or sales and marketing tactic to fix their problems quickly. They may say: “We should try to sell more [product name] to our existing customers,” or, “We should expand our distribution/sales overseas,” or, “We should increase our marketing spend”—and they may be right. But that is only part of the story.
After years of watching companies make the same mistakes over and over again, or miss golden opportunities to accelerate growth, I realized that too many companies seek the one right move—which, by the way, rarely exists—in order to improve or sustain their performance, respond to a competitive threat, or recover from a growth stall. The reality is, when it comes to growth . . . the one thing is it’s never just one thing.
RESPONDING TO CHANGE
Why do companies look for the one right move? Maybe it’s because they do what seems doable: look for the one problem area to fix, the one big initiative they can take to boost the numbers quickly, or even repeat the one growth strategy that worked in the past. This last tactic is particularly insidious. Companies often rely on strategies that worked for them once but may have outlived their purpose and no longer have the desired impact in current market conditions and context. Companies that reach into a bag of old tricks without careful consideration of the changing market dynamics risk getting trapped in a vicious downward cycle, repeating the same actions and yielding ever worse results over time.
Success is a lousy teacher. It seduce
s smart people into thinking they can’t lose.
—BILL GATES
The cost of misalignment between perception and reality can be enormous, and keeping a business-as-usual attitude under such circumstances is bound to only make responding to change more difficult. The perception may be: “We got this . . . it’s just a temporary setback,” when the reality is that customers change, industries change, technology changes—heck, the world changes—and companies that don’t constantly evolve, sometimes in the smallest ways, risk being left behind. Let this bring you comfort—you are not alone.
While it is true that many companies struggle to keep up with the pace of change or the rate of disruption caused by innovative technology and new business models, these are not the only reasons why companies struggle to find and maintain growth and revenue streams. Sometimes, the biggest threat to a company can be its own success or, worse, complacency.
Why? Because for companies that are currently growing, and not yet aware of an impending growth stall, it reinforces the status quo, it rewards (at least for a time) resistance to change, and ultimately it makes company leaders terrified to pursue a new direction for fear they will mess up a good thing that it’s got going. What had been, in the early days, an entrepreneurial spirit that embraced new opportunities (and risks) often shifts to one that fends them off . . . especially when things start to go wrong. The fact is, 87 percent of all companies go through a growth stall at some point, and only a small percentage of them ever recover.
FOR THE PURPOSES OF GROWTH IQ
Growth refers to top-line sales organic growth, not cost cutting, mergers and acquisitions (M&A), or other means to grow profitability or the bottom line.
Growth strategy is defined as “a plan of action or policy designed to achieve a major or overall aim.”
Growth path is HOW—initiatives that can focus the company on the task at hand and achieve the strategic growth goal.