Growth River

Advice is suggesting solutions without knowing a person’s intentions.

Alignment is the process of adjusting the parts in a system toward a shared purpose.

Belief systems help people move from lower to higher perceptual states. They act like a powerful healing story and often follow spiritual psycho-cultural logic, not mechanical logic.

A brand-promise is “why a customer’s total experience will be better and unique” (also called a promise-of-performance).

A breakthrough experience is the tipping point after which a new way-of-thinking & acting is sustainable.

Bundling is grouping products and services as a single value-proposition.

A business is a system-of-roles designed to develop, sell and deliver products and services to customers with the help of partners.

Business evolution occurs when the system-of-roles in an enterprise moves to a higher level of sustainable performance, as measured by sustainable increases in one of more of the following metrics:

• Positioning – being the winning choice for all key stakeholders
• Scalability – anticipating and resolving constraints faster
• Sustainability – making long-term survival and growth inevitable
• Return – generating surplus revenue

Business growth is increased throughput through the business-system. Represented visually, business growth is acceleration clockwise around the business triangle—an increase in the throughput at which products and services are developed, sold and delivered.

Business growth is the result of three key factors:

1. Developing winning value propositions.
2. Gaining access to target customers/partners and creating successful purchase moments.
3. Delivering products and services as promised and triggering positive referrals.

Business segmentation is how businesses are separated to reflect key develop, sell and deliver differences (including geography).

The business triangle is a graphic representation of a business, each side representing a different core, functional go-to-market process:

1. Develop: creating winning value-propositions.
2. Sell: creating successful purchase moments.
3. Deliver: delivering on a promise-of-performance.

Competitive advantage is the means by which a business maintains its position versus competitors and keeps making money/surplus value.

Conflict is a situation in which the needs or desires of two or more parties appear to be incompatible. Causes are individual differences in:

• Wants and needs
• Values and beliefs
• Assumptions and interpretations
• Degrees of knowledge or information
• Expectations
• Culture

A context is a set of conditions that limits what is possible and sustainable. A vertical mindset requires context thinking. Managers work within a context to optimize it; leaders work on a context to evolve it. The idea is simple: if you change the key conditions in a context, then you change the opportunities that can be attracted and sustained within that context.

Creative tension is the naturally occurring conflict between roles. It is a vital source of innovation. Lack of creative tension is a common cause for slow (or slow-moving) growth.

Cross-selling is the process of selling starters and then builders.

Culture is the ways-of-thinking & acting that are taught and reinforced in a group. Culture defines the kinds of problems that people are willing and able to resolve, that is, their capacity for vertical evolution. What is taught and reinforced relates to hierarchy, so culture is largely a result of the ways-of-thinking & acting of top leaders and the system-of-roles.



There are three types of customers:

1. The customer is the person who makes the choice to buy a product or service.
2. The target customer is the customer to whom a business seeks to sell.
3. End-customers or end-users are the people who use a product or service, though they may not be the customer.

Data, or metrics, are evidence of conditions for success.

A decision-making hierarchy is how final call on key decisions is divided among roles.

A default winning strategy includes those ways-of-thinking & acting that a person knows and likes best.

A differentiator is a condition that affects a stakeholder’s choice among alternatives.

End-users use the product or service that is bought.

An enterprise is a system-of-roles designed to evolve and grow a portfolio of businesses and functions.

The enterprise leader is a role defined by having final call on: who plays which roles; the enterprise strategy; and the legitimate use of rewards and punishments that ultimately determines the organizational culture.

An enterprise map is a visual representation of an enterprise. Businesses are rows. Functions are columns.

All organizations evolve through four distinct evolutionary stages. Knowing the specific stage of an organization, or what “time” it is on the clock, is a distinction critical for guiding sustained evolution and growth.

Experts are people who see key distinctions—unique differences that make success probable—where others do not.

Feedback is information on whether a person is moving toward or away from his or her intentions.

Final call is the authority to make key decisions. Each role within a system-of-roles is defined by the key decisions over which it has final call.

A function is a set of capabilities and responsibilities shared across multiple businesses. There are four types of functions:

> Develop functions create winning value-propositions: Research, Product Development, Training, Marketing Strategy.
...> Sell functions create successful purchase moments: Advertising, Website Marketing, Sales Collateral, Business Development, Sales, Account Management, Channel Management.
......> Deliver functions deliver as promised: Procurement, Project Management, Manufacturing, Quality, Distribution, Customer Service.
.........> Support functions make other functions work better: IT, HR, Finance, Legal.

More vertical >>> More horizontal (see Natural Path)

Functionitis occurs when a functional perspective overrules a business perspective.

Horizontal growth creates changes that result in unsustainable increases in performance.

An industry includes businesses that compete and/or collaborate to develop, sell and deliver to the same customers.

Influencers impact how a customer buys.

An innovation focus includes the key capabilities required to lead and maintain a basis for competitive advantage. The innovation focus has profound implications for new business priorities, brand, culture, metrics and acquisition strategy.

A key interdependency is an interaction or transaction where one stakeholder is dependent upon or vulnerable to another to get fundamental needs met.

Leaders wield two kinds of authority: decision-making authority and power (e.g. ability to determine rewards and punishments).

Leadership effect is how a leader’s ways-of-thinking & acting impact relationships and results.

> Enterprise leaders have the final call on who leads which business, while also ensuring the overall strategy is clear.
...> Business leaders ensure that all priorities are clear, and are always focused on ensuring the current primary constraint to growth in their business is being resolved while anticipating the next one.
......> Function leaders treat the businesses in the enterprise as their customers, ensuring that investments in support functions (HR, IT, finance, development) be clear for each individual business.
..........> Operational and project leaders ensure that resources are effectively managed day-to-day by project, providing key performance indices to business leaders.

More vertical >> More horizontal (see Natural Path)

There are three ways to learn:

• By Doing — having breakthrough experiences.
• From Others — receiving feedback.
• By Studying — understanding conditions for success.

A meeting is a forum in which a group interacts with a purpose. In effective meetings:

• Every topic has a clear owner who has the responsibility and authority to bring that topic to closure.
• The fewest number of participants required for speed and closure are present.

In contrast, an ineffective meeting is when people meet, share great ideas and then nothing happens.

A natural path is a hierarchy of conditions required for success. They are ways of organizing data against a hierarchy of conditions to reveal primary constraints. Natural paths are also power tools for formulating concise strategies, tracking progress and understanding the implications of trends and risks.

Investments in changes that are “more vertical” will have a bigger impact on sustainable performance than “more horizontal” changes.

Example: The Path to Organizational Evolution

> Vertical Ways-of-Thinking & Acting
...> Complete System-of-roles
......> Effective Agreements
.........> Unconstrained Workflows

More vertical >>> More horizontal

Optimal investments resolve the Primary Constraint to Growth without negatively impacting overall returns. Such investments have the highest possible return. Only investments that impact the primary constraint to growth in a business have an immediate return in terms of growth – all others have a potential future return.

A partner is a third party (individual or group) that provides capabilities in each of the three key go-to-market functions in the business triangle:

1. Develop partners create winning value-propositions: Research partners, Product Development partners.
2. Sell partners create successful purchase moments: Marketing partners, Channel partners.
3. Deliver partners deliver as promised: Vendors, Manufacturing partners, Distribution partners, Customer Service partners.
4. Support partners make business functions work better: Advisors, Accountants, ISP Providers.

Plans are a series of steps toward a goal with a beginning and an end.

Positioning is how a value-proposition or brand is perceived versus its alternatives.

The primary constraint is the one condition in a context that most limits higher sustainable performance. This condition can be a mindset or a physical constraint.
The business triangle provides three sets of conditions which can be tested to prove the location of the PCG in that business:

• The PCG is in Develop if a business does not have a compelling and scalable value-proposition.
• The PCG is in Sell if a business has a compelling and scalable value-proposition, but is generating too few potential purchase moments (e.g. low sales productivity).
• The PCG is in Deliver if a business can sell more than it can deliver.

A product is a tangible deliverable that a customer values. A service is an interaction that a customer values.

A protocol is an agreement between roles on how to work interdependently in a more effective way. Negotiating protocols is a fundamental leadership and team discipline. Protocols enable teams and organizations to leverage healthy creative tension as a source of innovation. Types of protocols include decision-making, meetings, conflict resolution, handoffs and timelines, and shared processes.

A purchase moment is the moment when a customer chooses to buy a product or service and determines the value of that product or service. There are three types of purchase moments, each corresponding to a different side of the business triangle.

1. Develop – purchase moments created as a result of how products are integrated (e.g. razors and razor blades).
2. Sell – purchase moments created as a result of bundling products and services (e.g. “Would you like a salad with that steak?”).
3. Deliver – purchase moments created as a result of the process by which a product or service is delivered (e.g. “You know that villa that you just rented? The one next door is for sale.”).

A role is an expected set of guiding values for effective decisions, accountabilities for activities, and responsibilities for outcomes.

Scenarios are sets of interactions among roles.

In a self-evolving team, members are accountable for each other’s development and practice peer-to-peer feedback.

Share is a measure of access to target relationships. Types include perceptions (such as mind share) and physical (such as shelf-space or location).

A speech act is a way of speaking that creates alignment. Key types of speech acts include: (1) clear declarations of possibilities and commitments; and (2) compelling requests and offers. Strategies and plans are only as effective as the declarations, requests and offers that they make possible.

Stakeholders are individuals or organizations which can impact the success of an organization. They include customers, beneficiaries, partners, employees and investors. Key stakeholders have veto power.

Starters and builders are kinds of value-propositions. Starters attract new customers and drive growth. Builders generate higher returns from established customers.

A story is a perception that affects how you listen and react. People are story-making machines; everyone has stories, held both consciously and unconsciously. Stories can be ineffective or effective.

Strategic planning is an organization’s process of defining its strategy and making decisions on allocating its resources (including capital and people) to pursue this strategy.

A strategy is the framework of choices that guides the nature and direction of an organization. Here is a complete system-of-strategies:

> Cultural strategy – to attract and retain top leadership and capital towards competitive advantage.
...> Enterprise strategy – to create competitive advantage across a portfolio of businesses and functions.
......> Business strategy – to develop, sell and deliver products and services to customers with the help of partners to create competitive advantage.
.........> Function strategy – to provide capabilities towards competitive advantage.
..............> Leader Development Strategy – to develop leaders towards competitive advantage.

More vertical >>> More horizontal (see Natural Path)

A system-of-roles is how purpose and responsibilities are divided within a group. In a complete system-of-roles:

• Every key perspective and issue has an advocate and owner.
• There is an effective decision-making hierarchy.
• Conflicts of interest are managed.

Here is a template for a complete system-of-roles:

> Owners/Boards attract and retain top leadership and capital to achieve the vision, values and mission of an organization.
...> Enterprise Leaders attract and develop leaders to optimize the performance of a portfolio of businesses and functions.
......> Business Leaders develop, sell and deliver products and services to customers with the help of partners to accelerate growth.
.........> Develop Function Leaders (& Teams) create winning value-propositions for better positioning, scalability, sustainability and return.
............> Sell Function Leaders (& Teams) gain access to target customers and create successful purchase moments to increase share.
...............> Deliver Function Leaders (& Teams) are keepers of key skills and/or resources; they set standards, outsource or seek parity for a specific set of capabilities.
..................> Support Function Leaders (& Teams) provide capabilities that improve positioning, scalability, sustainability and return.

More vertical >>> More horizontal (see Natural Path)

A team is a group with a single leader that must work interdependently to succeed. In contrast, a workgroup is a group without a single leader that does not need to work interdependently to succeed. In a self-evolving team, members are accountable for each other’s development and practice peer-to-peer feedback.

The total customer experience is the overall impression a customer has after interaction with a business and its partners.

Toxic rock stars are individuals who produce results but negatively affect others. Sometimes toxic rock stars hold groups hostage. Non-toxic rock stars are the result of a complete and effective system-of-roles.

Triangulation is when a person involves himself in a conflict or problem that is between two other people, often making conflicts worse and more difficult to resolve.

A value-proposition is an offer to provide specific benefits in exchange for something.

Vertical evolution is the process of resolving primary constraints to reach ever-higher sustainable performance levels.

A vertical milestone is an action or condition that results in sustainable increases in performance. Like the rungs on a ladder, vertical milestones are steps towards higher sustainable performance.

A vision is a compelling future state that people are willing to make sacrifices for in the present. The more powerful a vision is, the more people are willing to sacrifice to make it happen.

Ways-of-thinking & acting are values that affect leadership, teams and organizational culture.

Workflows include resources and activities that are integrated to attain target results.

A workgroup is a group that does not need to work interdependently to succeed.