Four Steps To Bottling Your “Secret Sauce” and Preparing for Rapid Growth
Guest: Kevin Adams, a coach at CEO Coaching International. Kevin’s experience includes leadership roles in publicly-held, private equity-backed, and family-founded businesses including Isagenix, ConAgra Brands, International Home Foods, and Stella Foods.
Quick Background: No, “growing broke” isn’t a contradiction in terms. It’s what happens when a CEO’s eyes get so wide that she loses perspective on what made the company special in the first place. Without that clear focus on what’s really driving your growth, your business could wander off track and burn cash with every wayward step.
On today’s show, Kevin Adams describes a four-part framework for achieving rapid growth that’s centered on the “secret sauce” your company needs to make BIG happen.
4 Keys to Rapid Growth from Kevin Adams
1. Identify your “secret sauce.”
“Most people who’ve been in business for a while think they know their business, but to try to find their secret sauce takes some time, it takes some energy,” Kevin says. “It’s different than a unique value proposition. It can be products, it can be services. It can be the way companies attract employees. It can be access to capital. They can come from many different places, but every business has their secret sauce. It starts with brainstorming and asking what’s different about our business model? What do we do that nobody else can do? How do we serve a part of the market that people don’t serve? Why are customers picking us, and why are they picking us in this situation? And it’s just unpeeling that onion until you get to what’s really different about your business model.”
Take Kevin’s tenure as CEO of Isagenix as an example. As the company tried to pivot from being a detoxification company to a weight loss company, an outsider might think that Kevin’s “secret sauce” was the product he was selling. However, Kevin and his team understood that consumers can buy weight loss products from anyone. What made Isagenix special was their process, which combined products with intermittent fasting. Focusing their strategy on supporting customers who were using that process to improve their health drove product sales and rapid growth from $300 to $900 million in three years.
2. Build core competencies.
“Core competency is your enabler to go after your secret sauce,” Kevin explains. “Companies usually fall in one of two groups. Either they believe my core competency has to be in sales, or people say, ‘I have to be great at everything.’ And so they try to put that stress on their company of everything we do has to be the best. And what I’ve found is that that’s not the case. If you can identify what’s unique to your company, what really drives your company, and build core competency there, that’s how you succeed through rapid growth.”
At Isagenix, two competencies that enabled the company to improve their secret sauce process were sourcing and formulation. Kevin and his team realized that they were spending too many resources trying to excel at manufacturing. Shifting those resources to purchasing the best available raw materials and locking down ownership of their proprietary formulas ensured that the company would maintain its global stock as its process support continued to drive sales.
Most businesses only have one secret sauce. But the CEO will have to develop multiple core competencies to support that key driver. For example, Isagenix also needed competencies in food and drug regulation, digital sales and marketing, and broadening its supply chain. Post-pandemic, those last two items are going to be table stakes for just about any business.
3. Think ahead.
“I know this sounds simple,” Kevin says, “but most people plan based on what’s happened in the past. ‘We grew 5% last year. Can we handle 5% next year? Sure.’ But what if you grow 50%? What if you grow 100%? With my clients, we develop a checklist and then we review that checklist pretty frequently. Can our systems handle increased volume? Do we have all the pieces we need to handle the customer interface? Do we have supply chain scalability? Do we have enough manufacturing capacity?”
If No’s start piling up as you’re thinking about your own business, then you don’t have systems in place that will support growth. And if you do see a sudden surge in demand that you won’t be able to meet, that’s when “growing broke” becomes a real danger.
The annual planning process that we facilitate with our entrepreneur coaching clients is always focused on what we’re doing today that’s helping us prepare to grow tomorrow. “We look at our one and three-year plan,” Kevin says, “and then we’ll say, ‘We want to have three qualified suppliers for every raw material, we want to have two points of distribution that can get to a customer within 48 hours, we want to be able to scale our customer service department by 50%.’ And then quarterly, we check in to see how those things are doing. Each functional team will give us their readiness and we don’t stop until we’re ready to go 100%. So many companies make the mistake of saying, ‘Hey, sales is ready.’ And what happens is you generate a huge customer demand, but then you lose it because you can’t deliver what you’re trying to do. The only thing harder than getting a customer is getting a customer back. You have one chance to deliver. And that’s why this exercise is so important.”
4. Plan for expansion.
“Typically, when you go into rapid growth, you’re going to outgrow the geographic market that you’re in,” Kevin says. “You’re going to potentially have to go to different distribution channels. A lot of people don’t start to prepare for that early on. You have to understand that expansion invariably leads to stumbles. Good companies start to say, ‘I’m designing my plan for this next year. But how do I also expand that if I want to get into new geographies, if I want to get into a new distribution channel? What kinds of core competencies would I need to have? Does that change my core competencies? Does it change my product in terms of size or positioning?’ A lot of people wait until it’s time to go. They set an unrealistic deadline to get into a new market or a new distribution channel. And then there’s the stumbles and you hear all the war stories afterwards of, ‘This costs us three times more than we thought!’ and ‘This took twice as long!’ That’s all something that can be planned to be done smoothly if you’re planning ahead for expansion.”
Isagenix got ahead of its expansion ambitions with years of careful research. They identified new target markets, anticipated manufacturing challenges, and prepared their North American logistics plan to expand internationally. They also noted a key consumer difference: in the U.S., Canada, and Australia, customers often bought 30-day supplies in bulk. Asian and Central American customers were more likely to make occasional daily purchases. So Isagenix designed a smaller package of products that would appeal to those customers.
For the past two years, many CEOs have felt like they haven’t had the luxury of thinking that far ahead, or that BIG. And it can be challenging to see an overseas expansion when you’re still struggling with supply chain issues and trying to keep your WFH and in-house teams in sync. But what these CEOs don’t realize is that their current woes aren’t going to fade away. The only way through today’s challenges is to outgrow them.
“You can’t not think that far ahead,” Kevin says. “You have to be able to build flexibility into your system. When we were doing those things, they didn’t add a lot of costs or a lot of extra effort. It was just saying, ‘Eventually we want to be an international company. Eventually these are the kinds of markets we’re going to have to penetrate. Eventually these are the kinds of challenges we’re going to have logistically or from a manufacturing perspective. We’re building our logistics, and what would that look like if we took it international, and having those same people just extend the work they were doing.’ You have to do that if your plan is aggressive growth. You can’t not do this.”
1. Set yourself apart. The thing that makes your company special is what’s going to drive BIG growth.
2. Make an annual plan whose daily, weekly, monthly, and quarterly targets will keep your company moving towards a 3-to-5-year goal.
3. Don’t wait. You company has to be ready to seize its BIG moment when that opportunity comes.
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.