HBR to develop a framework relevant to small and growing businesses, has used a combination of experience, a search of the literature, and empirical research. The framework that evolved from this effort delineates the five stages of development shown in below image. Each stage is characterized by an index of size, diversity, and complexity and described by five management factors: managerial style, organizational structure, and extent of formal systems, major strategic goals, and the owner’s involvement in the business.
You can read more details of it in HBR article however by knowing the growth stages you still need to build up few important characteristics in your company in order to achieve realistic growth, your firm and employees need to have following characteristics:
- Growth Factory
- Growth Leadership
- Growth Mindset
There is a great book on this topic but in general think of three simple starting points in order to build Growth Facktory at your company.
- Build a Common Language. A common language is a key enabler of a systematic approach to innovation-driven growth. Even defining the simple-seeming word “innovation” can be a great accelerator. Beyond basic definitions, identify the types of innovation that matter to you. Procter & Gamble chose commercial, sustaining, transformational, and disruptive; Citi selected core, adjacent, and disruptive. Every organization has its own take on growth types. Most companies can develop a reasonable stake in the ground via an afternoon discussion with a small group of leaders. At my previous startup we had “profitable growth” as growth strategy by answering these three basic questions.
- Conduct a Detailed Assessment. Form a small team and task them with pinpointing the biggest accelerators and inhibitors of making profitable growth systematic. The small team should identify points of leverage, or areas that have the greatest potential to accelerate progress. The team should also develop a first-cut blueprint for what the full system might look like at scale and a corresponding road map that shows what happens when. My experience suggests that it takes from 4 to 8 weeks to do these activities well.
- Work on Demonstration Projects. Look around at your firm, try to find teams working on more expansive, disruptive ideas. Find ways to work closely with them. This kind of work serves as a stethoscope into the organization, helping you to discover which of existing capabilities are accelerating new growth efforts and which ones might be holding them back. It is a very quick way to diagnose what things you need to start working on first and what things should be eliminated from the whole picture and be removed from ecosystem.
Growth Factory framework is based around four components:
- A growth blueprint that details the types of innovation you are pursuing, along with goals and guidelines for getting there.
- Production systems that transform the raw materials of innovation—ideas—into tangible new products and services.
- Governance and controls that enable the management structure to scale innovations to deliver impact and growth.
- Leadership, talent, and culture that feature the right people, in the right roles, doing and saying the right things.
When Growth Factory is created and led by Growth Manager (aka Growth Hacker) it is time to empower your leaders by a powerful growth leadership.
- Portfolio management. How do we design, assess, and manage an innovation portfolio on an ongoing basis? What are the best means to measure the potential of ideas with high degrees of uncertainty?
- Parallel disciplines. Making a growth factory function requires that an organization manage the creative tension between minimizing mistakes in current operations and encouraging experiments in innovation efforts.
- Identifying and nurturing talent. Recent research supports the belief that innovation is a skill that can be mastered and managed. How do you systematically identify the people in your organization that already have required skills, while developing them in others?
- Rewards and incentives. Given innovation’s inherent uncertainty, rewards need to focus as much on the behaviors individuals follow as on the outcomes they achieve. They need to be long-term focused, and avoid unnecessarily punishing prudent risk taking. That all sounds good, but how can a large organization manage such a system at scale? That requires leadership's creativity.
Individuals who believe their talents can be developed (through hard work, good strategies, and input from others) have a growth mindset. They tend to achieve more than those with a more fixed mindset (those who believe their talents are innate gifts). This is because they worry less about looking smart and they put more energy into learning.
When entire companies embrace a growth mindset, their employees report feeling far more empowered, engaged and committed; they also receive far greater organizational support for collaboration and innovation. In contrast, people at primarily fixed-mindset companies report more of only one thing: cheating and deception among employees, presumably to gain an advantage in the talent race.
I often discover that people understanding of the idea is limited. Let’s take a look at three common misconceptions.
- I already have it, and I always have. People often confuse a growth mindset with being flexible or open-minded or with having a positive outlook — qualities they believe they’ve simply always had. Everyone is actually a mixture of fixed and growth mindsets, and that mixture continually evolves with experience. A “pure” growth mindset doesn’t exist, which we have to acknowledge in order to attain the benefits we seek.
- A growth mindset is just about praising and rewarding effort. This isn’t true for students in schools, and it’s not true for employees in organizations. In both settings, outcomes matter. Unproductive effort is never a good thing. It’s critical to reward not just effort but learning and progress, and to emphasize the processes that yield these things, such as seeking help from others, trying new strategies, and capitalizing on setbacks to move forward effectively.
- Just espouse a growth mindset, and good things will happen. Mission statements are wonderful things. You can’t argue with lofty values like growth, empowerment, or innovation. But what do they mean to employees if the company doesn’t implement policies that make them real and attainable? They just amount to lip service. Organizations that embody a growth mindset encourage appropriate risk-taking, knowing that some risks won’t work out. They reward employees for important and useful lessons learned, even if a project does not meet its original goals. They support collaboration across organizational boundaries rather than competition among employees or units. They are committed to the growth of every member, not just in words but in deeds, such as broadly available development and advancement opportunities. And they continually reinforce growth mindset values with concrete policies.
It’s hard work, but individuals and organizations can gain a lot by deepening their understanding of growth-mindset concepts and the processes for putting them into practice.
Growth Strategies give employees a richer sense of who they are, what they stand for, and how they want to move forward.