My recipe for organic growth

I'm putting the finishing touches on my upcoming book, Break the Mold. It's filled with real-life stories and examples of the principles I write about in these weekly emails.

If you enjoy these articles, you'll love the book because it's not just about accounting or running a firm; it's about thinking differently to create remarkable outcomes. The pre-order link will be available very soon...

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4 Keys to Achieving Organic (Sustainable) Growth

The most rewarding part of my work as an advisor is getting into boardrooms and leadership sessions with the organizations I work with. It’s an opportunity to dig into an organization’s goals and friction points—and I love every minute of it.

In recent weeks, I’ve traveled around the country for in-person sessions with a few leadership groups. The thing on everyone's minds right now?

Growth.

“Duh, Whitman, it always has been…”

Sure, but the environment is also different.

Private equity is placing higher expectations on sustainable and predictable growth rates and demanding increasing results faster. And whether you decide to take on a financial sponsor or not, you’re competing in the same arena as everyone else. Grow or get left behind.

So CEOs are trying to figure out what will lead to growth that’s sustainable and predictable for years to come.

From my experience as CEO leading an organization that grew revenue from $475 million to nearly $1.5 billion in a few years, I’d like to share my recipe for growth—and it has nothing to do with your ownership model.

The coal that fuels the engine

Organizations are either growing or on the path to becoming less relevant. There’s no middle ground because others in the marketplace are constantly making investments in their growth.

I'll say it again because it's worth repeating... I don't care if you love or hate PE or want to take on a different type of financial sponsor or not... The firms that do are your competition. Plain and simple.

And the reality is that not everyone can grow, and certainly not at the same rate. So if you aren’t growing, you are falling behind.

Now, it doesn’t mean you can’t still perform or maintain as an organization, but you’re unlikely to be the organization that thrives in the future and redefines what’s possible if you aren’t achieving better-than-average organic growth.

And if you’re reading this email, I imagine you aspire to more than simply keeping the ship from sinking.

So if growth is so important, how do organizations actually do it? What’s behind a 10%+ compound annual growth rate (CAGR)?

As you can imagine, growth can be a complex process with many variables. I’m going to do my best to distill it down to what I believe are the foundational principles required for growth that’s actually sustainable.

Let’s dive in.

My recipe for sustainable growth

Just like you can’t bake a cake without some essential ingredients like flour, eggs, sugar, and baking soda (at least that’s what AI told me), there are four “ingredients” that I believe all companies that grow in a meaningful and sustainable way have in common:

1) A well-defined and well-executed strategy

A strategy is a framework. It’s a roadmap that defines:

• Where are we going?

• Why?

• How are we getting there?

Effective strategies describe a future state and establish a guidepost that an organization’s plans and actions will align with.

Don’t confuse this with defining how big or profitable you want your organization to be—or how fast you want to grow. Strategies aren’t about numbers.

“We want to be a $100 million firm by 2025” isn’t a strategy.

And strategies aren’t plans either.

Strategies define what we want to represent and how we make a difference for our stakeholders.

Well-executed plans may lead to immediate results.

Well-defined and executed strategies are likely to lead to intentional, sustainable results.

It’s rare to see an organization BREAK THE MOLD™ and achieve differentiated outcomes without an effective strategy.

​I wrote an entire entry about how to build strategies that lead to sustainable results here.​

2) A truly differentiated solution/offer in the marketplace

Organizations that grow at a rapid rate have clear answers to the question: Why are we different?

Hint: It’s not going to be something like “we care about our clients” or “we’re advisors” or “we’re people first.” It has to be deeper and more specific than that.

What’s unique about the way you care for clients? How do you do it? How do you approach advising in a unique way? Why is it valuable? What value are you creating for your clients that others can’t deliver like you do?

Heck, if you’re coming up short on meaningful answers internally, go ask your clients. They’ll point you in the right direction.

If you can’t identify why you’re different, well, then you probably aren’t. And that’s not conducive to your ability to grow at a rapid rate.

If you’re stuck on coming up with your points of differentiation, refer back to ​this article I wrote for some more insights.​

3) Engines to do things with people, for people, and in spite of people

When I refer to engines, I’m talking about defining systems and processes (sometimes built on technology and automation, but not always) to ensure important things continue to get done in a predictable way.

For example, during my time, “inside the ring,” as CEO, I worked to build an engine for innovation within the firm.

The question was: How do we ensure we prioritize challenging the status quo and generating bold ideas to continue to be a forward-thinking firm? My solution was to create an innovation lab — a physical place where all new hires to the firm would invest time during their first week.

Within the lab, we’d talk about and demonstrate the inputs necessary to bake constant innovation into how we operated as a firm. We set a bold goal of having every new hire spend an entire week at the lab so that, from day one, that innovation mindset would be instilled into every new team member who joined the firm.

Once built, it became an engine for innovation. The parts worked as designed, and we created a systematic experience that contributed to our strategy as a firm.

Engines work in the background to create predictable results. Those predictable results start to compound, which leads to growth.

For a more comprehensive guide on engines, ​refer back to this article.​​

4) Significant investment of financial and intellectual capital

Organizations that are rapidly growing (especially at rates of 10%+ per year) are likely making significant investments to create that reality. Those investments require financial capital and intellectual capital.

If you want to grow, you have to be intentional about having financial capital (cash) on hand to invest in your people, your technology, and expansion opportunities.

Likewise, you’ll need to make significant intellectual capital investments by having talented people, investing in their development, and partnering with those people to help create differentiated solutions and outcomes.

At a recent session with a client’s board, someone stated, “We want to be a technology-first organization.”

When I asked the participant, “What will it take to be that organization?” the response I received was, “Not sure…”

I often hear organizations proclaim progressive visions without having a strategy or plan in place—and without acknowledging the investment necessary to achieve their aspirations.

It will take what it takes. These investments are going to be required if you want to keep up with the most innovative organizations in your space, no matter how you decide to make them.

The bottom line

My point here is that growth is essential if you want to continue to be a relevant and sustainable organization. And the things that lead to growth aren’t going to change—no matter how you choose to play the game.

On a foundational level, to grow sustainably and thrive in the future, you will need:

• A well-defined and well-executed strategy

• A truly differentiated solution or offer in the marketplace

• Engines to do things with people, for people, and in spite of people

• Significant investment of financial capital and intellectual capital

Whether you choose to do that all on your own or not, you’ll have to keep up with all the other organizations playing the same game in different ways.

I’ve recently traveled to DC, Chicago, Atlanta, New York, San Diego, and France to participate in strategy sessions with boards and senior leadership teams—and it’s been a blast.

If you’d like to open a discussion around me participating in a similar meeting for your organization, ​you can start the conversation here.​

With intention,
​Alan D. Whitman