The Truth About What Drives Growth

February 22, 2021
February 22, 2021 Jamie Notter

Most leaders I talk to are looking for growth. It doesn’t have to be exclusively financial in nature (though that’s almost always in the definition somewhere)—it can include things like impact on your stakeholders or operating environment, creation of new IP, market share, etc. But growth is king. Growth equals success. There only three scores on the growth scale: growing, flat, or declining. Guess which one we want.

So if growth is that important, you’d think we’d have a clear picture of how to achieve it. If you Google “what drives growth,” you’ll find lots of opinions, including from big names like Ernst and Young, American Express, and PWC, as well as a wide range of niche consultants, all of which tout their secret to driving growth. These “secrets,” however, seem pretty generic if you ask me, falling into two basic categories:

Strategy and Implementation.

On the strategy side, you’ve got everything related to products, sales, and marketing, as well as ascertaining risk, understanding customers/markets, etc. Short version: choose the right strategy, and you will grow.

Implementation is more frequently labeled “Operations,” and includes people, technology, finance, distribution systems, transactions, and the like. You have to nail all those details if you want to grow. Or, in other words (the short version): implement better, and you will grow.

Am I the only one totally frustrated by lists like these? Sure, they make logical sense: if you make good strategic choices and are disciplined in your implementation then you will win—but does that advice really help? It feels circular, like the secret to growth is in knowing the right way to grow. The items under both strategy and implementation are laundry lists of areas where you might need to improve in running an organization, but I wouldn’t call them “drivers” of growth. They feel more like table stakes.

One article I found from PWC, however, had a slightly different take. Based on their survey of executives they concluded that the differentiator when it comes to growth came down whether or not the company mastered these three things:

  • A distinctive way of creating value;

  • Powerful internal capabilities; and

  • A coherence between their capabilities and their strategy.

I suppose this just summarizes the two categories of strategy (creating value) and implementation (internal capabilities), but it is more interesting to me, because it attempts to connect some dots in the “coherence” between capabilities strategy. That matches my experience with clients—growth happens when you connect the right dots, and not just generic dots—YOUR dots, the ones that make you unique, that drive your success. As you might expect, though, I find only one thing missing from the PWC analysis:

Culture.

It’s probably somewhere in the “distinctive value creation” part, because they associate that with a strong organizational “identity,” but culture isn’t just about identity. A lot of people frame it that way, particularly those who are keen on the “employer brand” concept, but culture is deeper than brand. Culture is about what is valued, and what is valued drives behavior, so it is, in fact, your culture that is the secret to the dot-connecting needed for growth. It’s your culture that makes the coherence between capabilities and strategies possible. It’s your culture that ensures your distinctive approach to value creation is preserved and maintained. This is what I was referring to in my post at the beginning of the year about “Culture Based Management,” which I suppose could be described just as accurately as “Culture-Based Growth.” PWC calls for coherence, but I would argue coherence (and growth) is, at best, fleeting until you bake it into your culture.

When your culture is coherent, your results are not random. A coherent culture brings strategy, capabilities, and operations into powerful alignment. It is like a lever for growth. The culture you have today, on the other hand, is likely just getting in the way, occasionally eating your strategy for breakfast, and generally causing friction that draws you back toward flat or declining. Our long-term work with clients is not about creating a culture that makes them feel good or gives them a shiny employer brand. It’s about creating a culture that is completely integrated with strategy and operations. It’s about creating a culture-based system that drives growth. It’s about exceeding even your own expectations of what you can achieve.


 

Photo by Gary Meulemans

Jamie Notter

Jamie is an author and growth strategist at PROPEL, where he helps leaders integrate culture, strategy, and execution to achieve breakthrough performance and impact. He brings twenty-five years of experience to his work designing culture-driven businesses, and has specialized along the way in areas like conflict resolution and generations. Jamie is also the co-author of three books—Humanize, When Millennials Take Over, and The Non-Obvious Guide to Employee Engagement—and holds a Master’s in conflict resolution from George Mason and a certificate in Organization Development from Georgetown, where he serves as adjunct faculty.