What characterizes a development leader? When we have posed this topic to company executives, they have typically replied, "I'll know it when I see it." However, it turns out that growth leaders all share a particular set of characteristics.
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We discovered that growth leaders1 had seven specific attitudes and behaviors after surveying 165 C-suite executives and senior vice presidents in charge of growth and conducting in-depth interviews with 20 executives.
Additionally, our research demonstrates that executives' top lines expand twice as quickly as those of their colleagues when they adopt more than 70% of these modes of thinking. Seven assertions that reflect the current thoughts and behaviors of development leaders have been formed from these ideas and behaviors.
Always prioritize progress. Growth is the primary priority for growth-oriented leaders at all times, including board meetings and performance evaluations. The head of a major consumer products company declared that growth was his organization's top objective. This intense focus on growth results from a strong conviction that "growth is everywhere" and that there are chances to grow more quickly than competitors in every sector.
Our research supports that opinion. Our findings from prior McKinsey studies indicate that there is a growth-capability difference between the best and worst performers of 20 to 46 percentage points. This demonstrates that growth is feasible in any sector as long as those in charge of it follow through on their commitments.
Growth leaders show dedication by always seeking growth money. They actively manage that allocation by assisting those impacted (shareholders, owners) in understanding why each additional dollar they find should be invested where they believe it should be.
Continue to grow better. The heritage business will resume operating as usual, regardless of how lofty the growth objectives may be, unless it is consistently encouraged to be more ambitious. Growth leaders achieve this by establishing goals that appear nearly insurmountable. Teams are motivated by this to work more and have a greater impact. The CMO of one tech company informed us that the CEO had growth targets that were three times the rate of the industry. Additionally, he added, "We expanded at a rate that was 2.5 times the market average." Working hard was rewarded, and it didn't matter if we didn't succeed.
Growth leaders are 50% more likely to discuss growth with the board either first or second on the agenda.
Expand the company as a whole. By providing everyone with a single set of values and a common language, leaders of growth ensure that everyone in the organization is focused on growth. As an illustration, they develop growth objectives and measurements with their leadership teams and then assist in converting these into measures for each individual at every level. Employees are more willing to collaborate and consider how they might aid in the expansion of the company when there is this kind of shared and co-created language in place. One executive at a technology business created a single set of expansion objectives that were directly related to the bonuses of 250 managers throughout the organization. You all have the same objectives, he added, whether you work in legal, marketing, sales, or service.
Place numerous bets. More bets on growth are placed by those who drive growth than by their contemporaries. They create a list of initiatives and ensure they have the necessary funds and resources. Growth leaders in Europe are 70% more likely to place multiple growth bets than just two. They boost their odds of winning and spread their risk by monitoring a scaled portfolio of growth bets. An ex-board member of a computer business once said, "Winning large pays you so much that it's more significant than how often you lose."
Support the people who are willing to take chances. Effective leaders have always been skilled at delegating work to others, but growth leaders go one step further by fostering an environment in which people believe they have the authority to make decisions. For example, approximately 40% of growth leaders in the U.S are likely to be fine with middle managers and frontline staff making crucial decisions.
70% of growth leaders are more inclined to place multiple long-term growth bets as opposed to just one or two (in the European Union)
Growth leaders establish specific, challenging targets (#1) and keep the company informed of their progress (#6). Then they move aside to let others in the company to experiment with other approaches in order to achieve the growth objectives. Starting with rewarding risk-taking, even on a small scale, and refraining from punishing failure, this is the first step. The previous CMO of a technology company said, "Things will go wrong if you want people to build your business. People are more inclined to take chances when they have assistance. Growth leaders in the EU are 40% more likely to explicitly recognize risk-taking on their teams.
70% of growth leaders are more inclined to hold on to or reserve budget funds in order to fund growth initiatives, teams, and skills (in North America)
Assist the client. The majority of business owners and managers believe they prioritize their customers. However, the reality is that the client is frequently ignored due to the demands of operating a large company, such as dealing with shareholders, managing risks, etc. The consumer, however, is indisputable to development executives as the focal point of everything they do. A senior executive of a major apparel company said, "What's in it for the customer is the first question I ask when presented options during meetings.
70% of growth leaders use both formal and informal methods to find out what their customers want (ethnography, surveys, in-store visits, etc)
Tell your story. Many of the top businesses have effective systems in place for gathering consumer feedback. Insight and analytics on customers are crucial for growth. Growth leaders, however, go above and beyond by putting design thinking to use and taking the time to get to know their clients. An executive of a manufacturing company who spent the entire day with one customer remarked, "I followed this customer from 6:30 in the morning till he went home at the end of the day. That gave me a lot of information about what he desired, what alarmed him, and what our company might do.
Growth leaders are 50% more likely to create a company that prioritizes the needs of the consumer (in North America)
Growth is worth taking risks for, the managing director of a transportation company declared when he slashed costs to bring in 20% more customers in a declining industry. The pricing team would calculate the amount of value that was at stake and record it while preparing a deal for a new customer. A public declaration that the director would be accountable for this risk would be made after the director signs it.
Utilize concepts that are "good enough." Growth leaders worry more about speed than they do about having flawless insights, yet smart judgments require solid data. They don't hold off till the data is perfect. Instead, they carefully consider their options, act on their decision, and then reevaluate their decision in light of the outcomes. A growth leader of a tech company advised, "Always seek for chances around you and be prepared to jump."
Examine the reality. Growth leaders aren't scared to let rid of a company or product when it's obvious that it isn't performing effectively. Making ensuring that resources are always going to new ventures that offer a better return on investment or to tried-and-true growth strategies is a crucial leadership ability. Even if it means letting go of beloved brands or things, this is still true. One boss of a fast-moving consumer goods (FMCG) company established a method to refer to any service or commodity that wasn't expanding as a "zombie." Every three months, leadership provided a "kill list" to each business unit, aiding in the company's removal of 700 "zombies" in a single year.
70% of growth leaders value speed over perfection (in North America)
Avoid thinking in the present. There is a lot of demand on leaders to do tasks promptly. Growth leaders are aware of this, but they nevertheless pursue long-term growth. They choose how to deploy their resources in a way that positions the company for future growth in order to shield themselves from these pressures. The CMO of a telecom company declared, "I invested 50% of my resources in the first year, 30% in the second year, and 20% in the third year. This prevents you from perpetually going off a cliff at the end of each year and enables you to create growth that endures.
Growth leaders take extra effort to prevent the organization from taking those resources back, which frequently occurs. More than 70% of North American CEOs, compared to their peers, safeguard or reserve funds in the budget to support initiatives, teams, and competencies that will contribute to growth.
Dismantle barriers within oneself. Growth is a team sport, but a lot of functional leaders are fiercely protective of their turf, which stifles a lot of smart suggestions. Conflicts are sought out by growth leaders, who then attempt to resolve them. They dismantle silos, put an end to territorial disputes, and aid teams that are short on resources so that their teams can do their duties.
For instance, the CEO of a large beverage firm established a central growth office to unite the marketing, consumer insights, and commercial teams under a single, clearly defined unit with shared accountability for growth. Functional silos that were impeding progress were eliminated as a result.
A clear, multi-year mandate to work on growth projects and the ability to do so without being required to prove short-term outcomes are 60% more likely to exist.
Give the company a purpose for being. Growth leaders are aware that having a purpose provides them influence and that speaking about growth is more than simply stating the what; it also involves stating the why. Talking about a mission that transcends brands, categories, and companies is a wonderful method for growth leaders to galvanize the entire organization. For instance, growth leaders are 70% more likely to ensure that each employee is aware of the growth plan and what it implies for them in the European Union. Everybody needs a cause to live, according to the CMO of a significant consumer brand. It promotes progress, makes employees happy, and is anticipated by society."
Be in constant communication. Business leaders are aware that they must communicate, yet they frequently underestimate its significance. Not at all, growth leaders. They communicate with one another in a clear, original, and regular manner.
Growth leaders are 80% more likely to frequently discuss growth wins (in the European Union)
Additionally, they create a plan for connecting with everyone and go above and beyond the typical communication channels (such as progress updates, newsletters, town halls, and similar events). They frequently share their stories with the public in order to inspire workers, alter investors' perceptions of them, and communicate their goals to clients. The proprietor of a company that serves clients
Our firm advised us to "use the media to communicate about wins, results, and new ideas." For everyone with a stake in it, make it as genuine as you can."
To ensure that every employee is aware of the company's growth plan and what it implies for them, 70% more growth leaders will do so (in the European Union)
Growth-oriented leaders devote more time to both formal and informal training. This training covers methods of thinking in addition to practical abilities and leadership qualities. Training for marketing and sales workers at one large beverage company includes teachings on exponential thinking (aiming for tenfold improvements rather than 10%) and utilizing network effects to accelerate expansion (engaging stakeholders and ecosystems to boost a product launch or a marketing campaign).
Give the people on the front lines ownership.
Getting individuals to make decisions and take risks without providing them with a plan for how to do so is half the battle. Leaders in the growth sector are explicit about granting others the freedom to make decisions. The owner of a European digital company ensures that the most crucial choices are made by the business-unit executives because they are the ones who know the clients and goods the best. However, these executives must collaborate across all functions. The chief growth officer of a significant consumer products company said, "Product, engineering, and sales make decisions together, so there are no fingers pointing at each other."
Go outdoors and get what you need. Growth leaders don't hesitate to collaborate or join forces with other companies to fill in the gaps in their own business models or competencies. A travel agency intended to expand its low-cost bus business but learned it couldn't effectively compete with larger organizations. It collaborated with a ride-sharing business to provide a door-to-door long-distance service that incorporated automobile, bus, and rail travel into one practical package. This facilitated its speedy growth and adequate scale.
Growth leaders are 40% more likely to have definite methods for rewarding their people when they take chances (in the European Union)
"Growth is a journey that calls for ongoing optimization, action, and adjusting throughout the entire organization, but it begins at the top. Only if the CEO, C-suite, and business unit executives have the proper mindset can they promote growth throughout the company.