How CEOs Think About Growth

Have You Ever Wondered What CEO’s Think About? 

Having been in different executive roles with P&L (Profit and Loss) responsibility and having held the top job a few times, I can tell you that the best CEOs think about a bunch of things that could, if they allow it, get really complicated and confusing. This is why it’s so important to find a way to simplify things.

Without a lot of confusion here, in this article, I can tell you that CEO’s think about growth all the time. To get the growth they want, they think about customers, shareholders, partners, employees, systems, finance (working capital, cash flow, equity, debt, etc.), liabilities and risks, strategy, competitors, political and economic factors, technology, real estate, assets, sales, marketing, brand, operations and the list goes on and on and on.

To avoid getting a daily migraine, I always take a complex and often concurrent crisis and simplify it into one of four different categories. Virtually everything that goes on in a CEO’s mind can be slotted into one or more of these buckets – all with the goal of growing the bottom line and increasing the value of the organization. I call this my “3 Ups and 1 Down” strategy.

3 Ups & 1 Down for Growth

As a leader, executive or CEO, you can use the following 3 Ups and 1 Down strategy to help you understand what lever to pull in order to achieve growth, solve a problem, or focus the organization around an issue:

The “3 Ups”…

1. Revenue.  To achieve bottom line growth and subsequent increase in value, we must always be looking for ways to drive revenues up. New products. New services. Reoccurring revenue streams. New customers. Earning more business from existing customers. Etc.
2. Productivity.  (These days, I think more in terms of ‘Engagement’). Driving productivity or engagement up is probably one of the biggest challenges in delivering growth that a leader faces. Whatever you do has to align with the company’s values and purpose. How do you get more out of the same team without burning people out or increasing team member churn? How do you build a great culture where your employment brand becomes your best recruiting tool? Can technology play a role in helping your team deliver more quality or efficiency? What innovation can be deployed?
3. Customer Satisfaction.  Happy customers buy more.  Happy customers tell their friends and family.  They are your best source of free advertising.  Piss them off and growth becomes an uphill battle each and every day.

And the “1 Down”…

1. Costs.  Topline revenue growth alone cannot consistently drive value growth that delivers on shareholder expectations. Great leaders always have their eye on costs.  Constantly looking for economies of scale and savings through replicable processes and standard operating procedures (this drives quality as well). In fast moving businesses, working capital (the cash you need to pay the bills while you wait for customers to pay you) is critical and attention to costs helps improve working capital without taking on debt.

That’s it. With this simple model, I like to say: “Anyone can be CEO,”  and… anyone can drive growth.

Robert Murray is a Vancouver, BC based Business Strategy Consultant, partner at Incrementa Consulting Inc., #1 Best Selling Author, and International Keynote Speaker. For further advice, insight and inspiration on how to unlock your inner leader, follow Robert on Twitter, LinkedIn, and Facebook.

The audio version of Bob’s #1 best seller It’s Already Inside is now available on Audible.