Ram Charan What Every Company Should Know

Too often, when we contemplate organic growth -- ways to increase revenues (and earnings) from internally developed new products and services -- we think about hitting a "home run."

These big ideas could take the form of a disruptive technology, such as digital photography, or a breakthrough product based on existing technology like Apple's iPod.

We may say things like, "If I can't get a double-digit sales gain next year, it's not worth the effort. I need to swing for the fences."

But business home runs don't come along often. And, as we know from baseball, people who try to hit home runs frequently strike out.

Small Victories Add Up

Another alternative is to try to hit lots of singles and doubles, relatively small wins based on improvements to or extensions of your existing products and services. (See my earlier column "A Simple Tool for Sparking Growth" for more on this.)

Singles and doubles add up, and cumulatively may allow your company to grow a couple of percentage points faster than the market. By growing even a little faster than the market, you're gaining market share.

If you start looking for small, relatively easy-to-implement growth projects instead of waiting for a big idea to come along, two things will happen.

First, you'll increase your chances for success. And with success, your whole psychology will change. The organization will see that growth is achievable, and people will be anxious to spot more opportunities. Then you can aim higher.

Second, creating a consistent, disciplined practice of hitting singles and doubles invariably leads to the occasional home run. One of the "simple" ideas you come up with is bound to turn out to be far bigger than anyone could have imagined.

Growth in a Hundred Days

One way to get your organization thinking in terms of singles and doubles is to borrow a process used by Avery Dennison, the global leader in pressure-sensitive technology and office products (such as the familiar Hi-Liter markers).

Frustrated by years of swinging and missing when it tried to hit growth home runs, the company decided to try for singles and doubles instead. It created pilot teams throughout the company, each composed of people from all the departments within that division. Their mission: Getting a revenue project up and running in a hundred days.

Size didn't matter. Some of the projects were as small as $250,000 in revenues (tiny even for a $500 million division, let alone the $5.5 billion parent company). What was mandatory was that the team had an order in hand for a new product in slightly more than three months after going to work.

Not surprisingly, people were skeptical at first, especially about the time frame. But the 100-day deadline served a purpose: It forced everyone to immediately confront issues that could keep the team from succeeding.

Cross-functional cooperation is not something that happens naturally, but the clear focus and short time frame forced team members from different departments to break down the walls that literally and figuratively kept them separate.

In addition, whenever possible Avery Dennison tried to include a potential customer on the team to make sure it stayed focused on user needs. When that wasn't practical, the company tried to include someone from sales to help keep the team customer-focused.

A Sticky Situation

Does this approach really work? Yes.

For example, a team was assigned to solve a problem for Procter & Gamble, one of Avery's major customers. P&G wanted to be able to attach samples of new products to current ones (the thinking being if customers liked the first product, they'd also love the second one once they tried the sample).

Existing adhesives strong enough to keep the sample in place during shipping were almost impossible for the consumer to remove at home without damaging either the product or the sample. The only other alternative -- taping the sample to the product -- was not attractive from a merchandising point of view.

By the 100-day deadline, the team had developed a glue that both held the sample in place during shipping and was easy for the consumer to remove. Not only did this generate a sale to P&G, it gave Avery Dennison a new product it could sell worldwide.

This is fairly common. A "single" that works in one place frequently will work in another, giving you a new profitable product to add to your line.

The program at Avery Dennison firmly implanted a growth mentality within the company and got people energized. As they saw success achieved fairly quickly, they wanted to become part of a growth project of their own -- helping not only the company but also their own careers.

Questions for Success

Singles and doubles come from taking a disciplined approach to identifying under- or unmet customer needs and figuring out how to fill them. You can build on that discipline to pursue bigger ideas.

Ideally, you'll be consistent in getting people from different parts of the business together to generate ideas and explore the organization's capabilities. (I elaborated on this in my previous column, "An Undiscovered Path to Personal Growth.")

A prepared set of questions can get the mental juices flowing. For example, you might ask the group to grade the following questions on a scale from 1 to 10:

• How well and how regularly does the sales force extract intelligence from customers and other players in the market?
  
  
• How good is the relationship and information flow between marketing and product development? Between marketing and R&D?
  
  
• How good is the flow of ideas in the business?
  
  
• How good is the company at creating value propositions for each major customer segment in the business?

Individual departments can generate singles and doubles through their own focused discussions. Sales, for example, might focus on how well they customize unique value propositions or how effectively they tie pricing to the attributes customers value most.

Manufacturing might ask about cost advantage, inventory turns, and quality. Finance might ask about billing and the clarity of information it provides to other departments. The legal department can examine how it writes contracts -- do they facilitate sales or bog things down?

As people throughout the organization ask these kinds of questions, they'll invariably discover lots of areas where they rate low numbers. Start there. In the process of addressing those shortcomings, you'll be identifying lots of ways to contribute to growth by hitting singles and doubles. The cumulative impact will be dramatic.