4 Steps to Break Through a Business Growth Plateau
Former Kendall-Jackson Winery President Shares 4 Steps to Break Through a Business Growth Plateau
Episode in a Tweet: If you’re too scared to experiment, learn, and recalibrate, a slow growth period can turn into fatal stagnation.
Quick Background:A successful business is a marathon, not a sprint. And just like long-distance runners and Ironman competitors, good CEOs have to prepare for “hitting the wall”: that inevitable point in your company’s progress where you’re just not progressing anymore. Growth stagnates. Gears grind. The next BIG goal is one step in front of you, but you can’t find the energy to move your feet.
In her career as an entrepreneur and executive, Ramona Cappello earned a reputation for breathing life back into dying businesses. On today’s show, she explains why companies of all sizes hit the wall and how the best CEOs break through and start growing again.
Key Insights on Breaking Through the Wall from Ramona Cappello
1. Reassess your KPIs.
CEOs who are baffled when they hit the wall often have a poor understanding of what was driving their company’s growth in the first place.
“It’s really easy to get early wins,” Ramona Cappello says, “and then, all of a sudden, it’s really hard to keep that momentum going if you don’t have the right kinds of steps in place. A lot of times you’ll walk into a business and they may not even know how they got to where they are, so when things slow down, they don’t know what drove it.”
If you can’t define the key performance indicators that are driving your business, then you can’t measure and manage them. Go back to square one. What’s the Huge, Outrageous Target (HOT) you set at the beginning of the year? What are the actionable, measurable steps you put into place to hit it? And which one of those steps is lagging behind where it should be, dragging your overall growth down with it?
2. Stop saying “No.”
Successful companies never stop experimenting. When a new initiative catches fire, they add more fuel. When something doesn’t spark, they snuff it out and move on.
However, Ramona Cappello discovered that at many stagnant companies, failures received far more attention than the successes.
Ramona Cappello: If success is 100% of everything we try must work, that’s not realistic.
“Failure was rewarded in that that was what was recognized,” she says, “that was what was spoken about. Instead of, ‘Great, we tried, we failed, we’re going to make it on the next one.’ It’s all about the lens you use to view the problem. And it’s amazing how fast negativity breeds.”
Ramona’s solution at one company she revitalized was a new rule: No saying no. The results were enormous.
She remembers, “I said, ‘No one can say no to anybody else’s request. No is not an option.’ However, we all get to put a list of demands for what it will take for us to say yes. What that forced was a deeper understanding of what the obstacles were, what was required to overcome them. And then we were making decisions about how to make something happen instead of why not to make anything happen. And we went from launching or developing three to four products in one year to 60 new products launched successfully in one year. Within about 18 months, we had more than tripled the size of the company and we sold it for the second highest internal rate of return in the private equity firm’s history at that point.”
3. Get your best ideas “on base.”
The “Moneyball” statistical revolution in baseball taught smart teams that gaudy home run numbers weren’t everything. Instead, successful managers and executives began to prioritize players who could get on base.
Ramona Cappello wants more CEOs to manage their teams and their best ideas the “Moneyball” way. “If success is 100% of everything we try must work, that’s not realistic,” Ramona says. “Instead, what we’re going to recognize is at-bats. Attempts made, and then learning from what didn’t work fully and how to make it work better. Success breeds success. When you get onto a couple of bases, all of a sudden people are looking for ways to hit home runs, and not everything is a home run. But if you keep rounding the bases, you score runs. So, the idea is how do we keep trying, how do we keep moving forward?”
Of course, in a baseball game, you can’t have more than 3 players on-base at a time. So, what are the top 3-5 ideas that your team is mulling right now? What assumptions behind those ideas need to be challenged before they’re implemented? And, perhaps most importantly, are those ideas going to drive up the key metrics that will get you growing again?
4. Cultivate a learning culture.
Ramona Cappello learned a powerful lesson about what a learning culture looks like when she was a junior executive at Nestle sitting in on a top-level meeting:
“The president of the company asked me a question. And my boss answered the question and it was clear to everybody that he answered it because, most likely, he didn’t want to hear what I had to say.
And so the president of our division, under his breath said, ‘Ramona, do you agree with that?’ And I said, ‘Mostly.’ And in his booming voice, he said, ‘Well, speak up then.’ Then the president of the company said, ‘What’s that conversation going on down there?’ So I said, ‘Well, Dave asked me what I thought of Bob’s answer. And I mostly agree with it, but I have something to add.’ He said, ‘Well, why don’t you add that?’ And so I added my thought to it and all day long I waited to be paged.”
Ramona assumed she’d be fired for talking out of turn. But when the president did call her to his office at the end of the day, she was surprised to hear him say, “No, I called you into my office because I pay you a salary. And that salary is because I want your opinion. And there’s only two things that’ll happen when you share your opinion. One is you’ll be wrong, and you’ll learn something, and the other is the company will be wrong, and we will learn something and benefit from it. But either way the company benefits.”
Few CEO blind spots are as glaring to the rest of your team as the boss who acts like a bull in a china shop. If you’re more worried about being “right” than you are about what’s right for the company, you’re going to trample over some great ideas and send your best people stampeding for the door.
Advises Ramona, “If you’re not constantly re-examining everything you do, good and bad, you will not have a learning organization. But if you do, it will create an energy of trial, success, picking yourself up, dusting off your knees, and getting to the next level.”
1. Keep your door – and your mind – open. If you aren’t listening to your best people’s best ideas, they’ll jump to a company where they do have a voice.
2. Don’t fear failure. Say “No” to everything and you’ll never get anywhere new.
3. Stay focused. New ideas and experiments should push you towards your BIG targets, not veer the company off course.
About CEO Coaching International
CEO Coaching International works with CEOs and their leadership teams to achieve extraordinary results quarter after quarter, year after year. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, CEO Coaching International has coached more than 1,000 CEOs and entrepreneurs in more than 60 countries and 45 industries. The coaches at CEO Coaching International are former CEOs, presidents, or executives who have made BIG happen. The firm’s coaches have led double-digit sales and profit growth in businesses ranging in size from startups to over $10 billion, and many are founders that have led their companies through successful eight, nine, and ten-figure exits. Companies working with CEO Coaching International for two years or more have experienced an average EBITDA CAGR of 67.8% during their time as a client, nearly four times the U.S. average and a revenue CAGR of 25.5%, more than twice the U.S. average.