What Does 'Growth' Actually Mean?
Growth is fast becoming a dirty word. The idea of "more, bigger, more" seems to have had its day. And that's just as well. Sounds crazy maybe, coming from the mouth of a Growth Hacker. Unless you realise that Growth Hacking actually means 'Innovation Hacking': a way to stay relevant by continuously reinventing yourself as a company. And to thereby ensure continuous value creation, and sustainable growth .
As growth hackers, marketers, entrepreneurs, and even as a society, we have been continuously talking about 'growth' for decades. Obsessively, almost. But what do we actually mean when we use that word, growth?
A perhaps philosophical, but at the same time extremely relevant question that we don't give enough thought to. Is growth really what we should always strive for? Is that even possible?
If we look at the world around us, the answer seems to be a resolute 'no'. Nothing on earth has the ability to grow in perpetuity. Anything in nature that tries to keep growing indefinitely will eventually either destroy itself or the environment in which it exists.
What does that mean for our perspective on our economy? And what does that mean for your perspective on your business?
The pattern we do see in nature is the following:
A thing will grow until it reaches maturity. Then it stops growing, after which it continues to flourish for a longer or shorter time. And then, at some point, it decays, dies, and provides the breeding ground for new life and new growth cycles.
Growth, therefore, is not a goal, but a phase.
And this natural law also applies to businesses. This means that companies that want to prolong their existence and 'growth' will have to innovate during their phase of flourishing in order to enter a new growth phase. Or else, they'll have to simply accept and embrace their natural fate with grace. Not everything has to be forever, does it?
A universal pattern that shows how growth proceeds is the S-curve graph:
The horizontal axis depicts time, but sometimes also investments of effort and money. The Y-axis usually represents a certain form of growth.
After an often difficult start, with little or no turnover and profit, and high costs, there comes a phase of solid growth. This includes increased sales and some profit, at relatively lower costs. This phase finally often flattens out slowly to a point where growth stagnates, with low costs and consistent sales and profits.
Beyond this point, the growth curve will almost always go down again. Just as the natural process dictates.
Maturity stage
You could argue that at a certain point, when the phase of rapid growth has come and gone, a company is mature. To hold this growth plateau, and avoid negative growth, it is important to find new ways to achieve growth.
This is the time to innovate. To look for new products and/or services; a new growth strategy.
This starts with ideas for services and products, or additions to existing propositions, that you test and validate with the target group you are trying to serve. And then the maturing of such new or renewed propositions, by getting to know the paths through which you can best reach your target group.
To continue to grow, it is therefore important to constantly reinvent yourself as a company, as well as your offerings and the way you reach and serve your target group. To keep improving.
Only if continuous innovation is part of the culture and DNA of your company, it is possible to remain relevant in the market. And to extend your right of existence and reason for being, as a company.
If not, you run the risk that competitors or disruptors in your market will catch up with you. Or that you simply turn out to no longer be relevant to your target audience.
How important is it that your company survives the test of time?
In a Harvard Business Review survey a few years ago, it was found that 87% of companies had experienced one or more periods in which growth slumped dramatically. On average, these companies lost 74% of their market capitalization during these periods of stagnant growth.
For the vast majority of companies, growth in the sense of innovation is absolutely necessary for survival.
And that has more to do with mindset and culture than anything else. And it has much more to do with figuring out new ways to deliver value, rather than chasing more revenue, a bigger company, more, more, more.
Ultimately, the greatest benefit of this type of growth - i.e., innovation - is that you remain agile. And that you'll always be able to respond to new challenges and changes in your environment. In addition, in this way you continue to deliver value. This way, your company retains its right to exist.
Finally, there are one or two "mores" that we approve of when it comes to growth. Namely:
And that's where Growth Hacking comes in as a very handy tool.
This story and the reflections on growth in it, come from the introductory part of a programme we're developing at BAMMBOO Growth Hacking Agency. The Master of Growth program is all about growth, and the ways you can systematically address that for your business. Want to know more about this project and stay up to date?
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