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Not all growth is good – managing profitable growth

jars of coins showing managing profitable growth
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When companies reach a certain size and market share, managing profitable growth becomes more challenging as they compete to hold or grow markets with never-ending downward pressure on pricing while finding ways of being operationally smarter. Top-line growth often does not necessarily mean you will increase profit.

Managing profitable growth in established companies requires the right measurement and focused management to keep an even balance across all areas of the business.

The wrong customers, the wrong sales force, poor forecasting, or poor strategy implementation can seriously erode profitability.

Clever executives understand that growth is about the careful balance of the right financial forecast and resources combined with the operational capability to deliver products and services to customers profitably. They further understand that a company not growing on the top line is most likely going to deteriorate within two to three years. Growth is essential. The imperative for the sales organisation is to operate a highly efficient and effective sales team that is both predictable and reliable.

Managed growth requires a sales culture that is not of the flamboyant or autonomous kind often associated with sales. The sales organisation must be managed with standards similar to those used in other areas of the business – namely, transparency, measurement, and accountability. For many companies, this means going lean. The principles of “lean” must be applied equally to the sales organisation.

You need to remove excess waste in activities, human capital, and internal processes. Importantly, you must align your sales organisation to be capable of value creation, increasing customer loyalty, and reducing costs to serve. You need not only a great product but a high-performing sales organisation that can partner with your customers and align value creation. Where that value is not delivered, further pressure is brought to bear on price and profitability.

The challenge is this: any sales force in the world can be improved a little in dozens of ways, with short-lived impact. Companies waste tens of thousands of dollars on such instant approaches. But for genuine growth, the best sales excellence initiatives rigorously identify, prioritise and then close gaps in sales strategy and implementation capability to capture specific growth opportunities. The goal is not just any sales improvement but the right investments – those that result in a substantial increase in sustainable business results.

Managed profitable growth best occurs where sales and marketing excellence is the focus of the organisation. It is about a well-defined implementation plan with a sales team that is performance-focused, accountable, and committed to getting things done and “doing it right” – a team that seeks excellence and does not draw the company back to past habits from a different era. Today’s business world requires contemporary sales methodologies that support managed growth.

The question then becomes, “Where to get started?”

While transforming sales and marketing organisations to drive growth is not easy, many CEOs have difficulty simply knowing where to start. If they wait for the sales or marketing leadership to take the initiative, in our experience, it will be a very long wait.

In our experience, CEOs and senior executives should ask the following three questions to get the process moving in a fruitful direction:

  • Do we really know how good our sales and marketing organisation’s capabilities are compared with best practices and competitive markets?
  • What is at stake if we don’t radically improve our sales and marketing performance?
  • What is the ROI on our current sales and marketing organisational investment?

Consistent profitable growth from the sales and marketing organisation is an important priority for companies and can be done with the right tools and approach.

If you would like to discuss your current challenges and how to best resolve them, please reach out to our office and organise a time for a thirty-minute telephone discussion.

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© 2016 Sales Focus Advisory. All Rights Reserved

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About the Author: Adele Crane

A leader in Implementation Consulting.
CEOs and Managing Directors have relied on Adele Crane to solve challenges with the performance of their sales and marketing since 1990. Her consulting experience in delivering results in 90-120 days is unprecedented by any other known sales and marketing consulting professional in the world. As an author of 3 acclaimed books, appearances on major media, and publications in USA, NZ and Australia, Adele’s experience brings fresh thinking and contemporary practices to business.