Posted 08.18.2010
Emerging growth opportunities: part 1
There's been a silver lining to those economic storm clouds
By Mark Francischetti
Unless you've hidden under a rock for the past few years you know that we've gone through one heck of an economic trauma. Now that the "experts" are pointing to recovery, we have the dubious luxury of looking back over our collective business shoulders to assess what was lost and perhaps more importantly, what we have learned.
In some respects, there has been a silver lining to the economic shakeout. One positive result of the downturn has been that it has forced companies to truly scrutinize their operations and P&L's to eliminating waste, redundancy, fat, etc., while looking for ways to be more efficient at lower overall expense. So if the first half of the crisis was panic, shock, large paper and real losses, etc., the second half of the down cycle has been characterized by companies systematically tightening their economic belts.
These actions collectively are described by such terms as "downsizing", "right-sizing", (and I love this one) "positioning for growth". At this point, most smart companies have or are nearing completion on the efforts to remove cost from the business such that their cost models are in line with their revenue models.
It is no coincidence that as the economic experts are now projecting that we're at or near the bottom of the crisis curve that newly lean cost structured companies are slowly turning their attention back to top line revenue growth. This somewhat predictable phenomenon has/will create a huge demand for answers as to how to drive those increased revenue aspirations. Topics that have been largely ignored by the majority of businesses in the midst of economic crisis such as; Branding, Positioning, Sales Force Optimization, Market Share, Competitive Strategy/Differentiation, etc., are not only in vogue, but critical to long term success.
This natural evolution of the macro business cycle will create a boon market for companies focused on providing their customers with strategies and executable tactical plans to drive increased sales. Both strategic marketing/sales consultancies (strategic plan elements, branding strategy, positioning, etc.) and tactical marketing implementation companies (providing services such as event management, collateral, e-marketing, etc.) should find customers hungry for their services.
The key for CEO's and entrepreneurs will be to keep their pursuit for growth in check and not get caught up in a revenue land-grab (revenue and market share at all cost!) by remembering the lessons of the recent past and keeping a corporate financial balance between growth and their newly optimized cost structures. Spending on growth is critical but requires the checks and balances of prudent financial decision making.
I'm sure many of my friends who have grown up on the Sales/Marketing side of the house are cringing a bit by this message, and I'll be railed out of town as a traitorous heretic in the traditional battle between the sales/marketing teams and the company financial watchdogs. If any lesson was taken away from the current downturn, it must be fiscal prudence in light of the allure of top line revenue growth opportunities. Just as an alluring temptress needs to be approached only with certain protections, seductive potential returns need to be considered from a holistic corporate perspective.
The goal is not just top line revenue growth and market share expansion, but "good" growth and expansion. "Good" means sales at the appropriate margin and overall growth that makes sense balanced with the needs and capabilities of the entire enterprise. Those of you who have been around long enough to recall the lessons of the Dot-com crash will relate easily to this message.
Mark P. Francischetti is a partner and VP of Marketing and Business Development at CXO To Go LLC. He has more than 30 years of executive leadership and management experience in a broad range of organizations and environments. Mark's areas of expertise include IT sales, operations, marketing professional services and international leadership.
Readers Respond
Excellent article and to the point......companies must do more with less to stay competitive and profitable!
By Bob Corbett on 2010 08 19Leave a comment
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