Where Do We Grow from Here?
Amazon’s 2010 acquisition of BuyVIP for €70 million ($96.5 million) in many ways fulfilled the cofounders’ ultimate ambition when they were just getting started. "We said ‘sell to Amazon’, but originally as a joke, like it would never happen," explained Gustavo García Brusilovsky, BuyVIP cofounder and CEO, at the 4th Annual Growth Summit.
Starting his first company at age 39, the average age of most entrepreneurs, García is one of many examples that debunk the start-up entrepreneur myth: It is not a realm reserved for young techies in Silicon Valley.
After getting off the ground, the struggle for most budding businesses is how to grow. While having a lot of money or being in the right place at the right time have worked for the Facebooks and Whatsapps of this world, it’s not realistic for most startups to seek this path to growth. According to García, you have to have the idea that really works, not be the first to have the great idea, like Dropbox. In addition, "You have to think about the customer all the time, and you’ve got to do your homework for this to work," he advises.
He also encouraged entrepreneurs to be global from day one "You have to think of the end game," he said, "and what they care about in an eventual trade sale." Geographically, this is most likely the UK, France and Germany for a European company. Therefore, "for a Spanish-born company, the best strategy is production in Spain and commercial offices in London, Berlin and Paris."
Growth through Leadership
George Kohlrieser, IMD Professor, author of Dare to Care and former hostage negotiator and David Marquet, retired U.S. Navy Captain and author of Turn that Ship Around, concurred that strong leadership is the key ingredient to growth. Of the many things in a leader’s job description, first and foremost, he or she must be able to gain the trust of the team. "Trust is the fundamental currency of leadership," Kohlrieser told the audience. "When leaders are a secure base and trustworthy, followers will trust the leader to guide them through change." Unfortunately, he also pointed out that only 80% of people surveyed in the U.S. don’t trust their bosses.
Turning around the state of affairs is critical in creating favorable conditions for growth. Marquet made a 180 degree turn in the U.S. Navy’s traditional definition of leadership and as a result transformed the worst performing crew to first, preparing a disproportionate number of officers for promotion.
"The boss doesn’t have all the answers," he said. "Once I gave up the pretense of knowing the answers, I gained the trust of the crew." Employees on all levels are in fact the ones who have many of the answers. Therefore, pushing authority to where the information is and giving employees psychological ownership of their work, is a powerful approach that changes attitude, morale and results. Giving control, says Marquet, needs to be supported by two pillars: technical competence and organizational clarity.
On the U.S. Santa Fe, Marquet created an environment where employees are allowed to blossom, where leadership could be exercised at all levels. Similarly, Kohlrieser encouraged the audience to rethink leadership: "It’s not about how you control the situation. It’s about influencing. How you are able to influence that person to have a mindset change, that’s what leaders have to do every day."
Growing Sales in Changing Times
Today there is much greater flow and access to information across organizations. It is this same information without boundaries – but to potential customers and competitors-- that is changing sales drastically; very well-informed customers are becoming tougher to deal with and demanding more expertise. Neil Rackham, author of Spin Selling, discussed the blurry boundary between marketing and sales, and how breaking the traditional functions assigned to each can help companies grow in an environment where there are twice as many competitors as five years ago.
Companies must decide how to deal with customers who are either transactional or consultative. "The new role of sales is not to say ‘our mousetrap is better’," he explained, but rather, "to give expertise to add more value to the product." Rackham advises companies on how to reorganize sales and marketing to maximize growth. Some companies, for example, are moving transactional sales to marketing and keeping consultative functions in sales, while others like GE split marketing into upstream, focusing on product development and brand strategy, and downstream, which focuses on working with the sales force.
In a shifting, global landscape of increased competition, growth is a conundrum. How to invest efforts today to yield results tomorrow, may begin with something as simple as "collisions per square meter." This was one of the three key performance indicators that Verne Harnish, founder and CEO of Gazelles, Inc. and the event’s host, highlighted as a predictor of which companies will be in a better competitive position. "How much interaction can you create within your company?" he asked, citing 3M in Austin, Texas as the best designed facility in the world precisely because it maximizes interaction and idea-sharing between departments. Designing space that lends itself to creativity combined with leaders who know how to inspire and empower people to reach their potential may be the ingredients to open new paths to growth.