Hacking Growth? There’s a Better Way
“Sustaining long-term growth … requires a scientific approach to growth.
In fact, growth experts resoundingly say that “growth hacking” isn’t in their vocabulary or something they relate to their work.
“Hacking” implies a haphazard / gut-driven approach, and the reality is quite the opposite.”
This article isn’t about the perils of growth and what’s the right target. That’s for another time. But if growth is something you wish to pursue, there’s a systematic way to go about it.
Too many businesses treat growth like buying lottery tickets: make a few sentimental choices and hope for the best.
A better way is to design growth with a robust system that strikes the right balance between creativity and the scientific method, and critically, establishes the routines and discipline to make consistent progress.
So how do you do it?
While the concept of a dedicated growth team and the Head of Growth role first gained traction in Silicon Valley, the principles and concepts are equally applicable to all companies.
Y Combinator and Brian Balfour have developed great articles describing the implementation, so here I’m going to focus on the core concepts as they translate to companies generally, whether you’re in tech or otherwise.
1. Growth is a team sport
Just as sports teams are comprised of people specialising in different positions, so too is an effective growth team.
Growth isn’t a marketing function, a product function, an operations function or a customer service function.
Indeed it takes forward-thinking individuals from each of these areas, and others, to contribute their perspectives and insights to build a complete picture that you can use as the basis for guided experimentation.
Even in a company with a handful of staff, its typical to find that no one person has an accurate understanding of the entire customer journey.
2. Choose your goal carefully
I’m a strong believer that a team focused on growth shouldn’t look only at customer acquisition and revenue.
In fact, until you’re hitting high customer satisfaction levels, dealing with customer retention is a higher priority than acquiring new customers. The problems might be product-related or choice-of-market related, but until you sort it out you’ll lose customers out the back door as quickly as they come in the front door.
Similarly, your goal for any given quarter might be fix up sloppy execution. Other than soaking up cash (which you therefore can’t use to fuel growth), poor execution has a tendency to permeate its way through the company culture and become systemic. It’s important to look at the cost or process side with just as much rigour to say what can we do faster, better or cheaper?
3. Focus on what’s going to really move the needle
Yes, it’s certainly true that small changes add up. But everything that you do soaks up resources.
People’s time. Money. And the opportunity cost of whatever else you aren’t doing.
If the best ideas you’re prioritising look like mere tweaks, then it’s a sure sign that you need to be thinking much bigger or having a serious look at the value proposition.
The ‘10x question’ is a powerful way to reframe thinking here. Instead of ideating based on what’s going to move the needle a few percentage points, consider what you could do to achieve a 10x improvement?
This forces you step out of the usual linear thinking and move into exponential thinking, which requires a lot more creativity, deeper insights and sparks much more impactful discussion.
But there’s a flip side to this…
You want to think big but execute small.
Try to avoid soaking up resources for too long making too little progress, by breaking down initiatives into quickly implementable chunks that you can learn from and build upon.
4. Be relentless in getting outside your own head
Too often companies use their data merely to measure results, not to generate ideas.
Sure, dashboards showing progress on OKRs, goals or KPIs is important. But that’s table stakes.
Data should be fuelling ideas on where to make your next move. All companies have customer feedback, operational data and marketing data, yet don’t do near enough with it.
But that data has the power to answer some vital questions to fuel growth:
- What prompted our customers to choose us in the first place? [acquisition]
- What are the real reasons our customers choose to stay with us? [retention]
- What would we have to do better such that our customers would tell everyone they know about us? [referral]
- What would our customers most want that we aren’t currently offering? [revenue growth]
These questions can only be answered by that truly know the answer. Inferences can be made from surveys, call centre reps and customer behaviours, but leaders need to be out in the marketplace interacting with enough customers – and talking to enough staff – to really get clarity on them.
There’s a school of thought against this that says: “Wait – if Henry Ford had’ve asked customers what they wanted, they’d say faster cars”.
Probably true, but the key insight here is they want to go faster!
And that’s what you need to be hyper-focused on… the insights not necessarily the words themselves. What’s the story behind the data?
5. Remember that the goal is to learn fast
… it isn’t to fail fast.
I’ve seen this thinking cause companies to abandon ideas too early and to miss the vital learnings from what they do pursue.
Think about it – you get your very best people together, you bring the right data to the table, identify an opportunity and select it as your #1 priority.
And then it doesn’t work.
In this case there’s almost always an important insight waiting to be found. Often it’s that you’ve debunked a fundamental assumption held about your customers, market or product that opens up a series of new opportunities.
When you shift the focus to nailing the fundamentals and learning, results will follow. Your objective is to build and sustain momentum – a series of regular successes – not achieve sporadic ones built on serendipity.
6. Don’t fall victim to the ‘it worked for them’ trap
Every company is unique.
It’s a futile game trying to copy what others are doing, whether you’re on the outside or have intimate knowledge (which is rarely the full picture).
Each company has different people, culture, strengths, weaknesses and capabilities. They also have different strategies, goals and access to resources to pursue them.
And that’s before you overlay other factors like luck, timing and everything else outside their control (like social media algorithms!).
By all means, look at what others are doing – competitors, partners or even those outside your industry – but use it as an input rather than the sole basis for the decision.
The core idea is that sustainable growth requires a system. A system comprised of people, processes and tools using routines and discipline to find and pursue the right opportunities for growth.
The ‘right opportunities’ are all about what you have the resources to execute right now, rather than picking the very best opportunities. And whether they’re successful or not, you need to be learning from them. If you don’t have a good answer to the question: “What did we learn?” then it might have all been a waste.
Pete has worked with the leaders of startups, government and publicly-listed companies for over 15 years, providing advice on strategy, operations and technology issues. He is the founder of Starteer and helps founders and CEOs to achieve sustainable growth.