One of the universal truths in the revenue growth business is the seemingly random glass ceilings preventing further growth that companies of all types experience at certain levels of revenue. The most impenetrable one I have seen is at the $10M revenue mark.
Imagine my surprise (and sense of validation) when I saw the Inc magazine article released last week released last week about how many companies are stuck at the $10M revenue mark.
The article goes through five ways they can jump-start growth in their businesses, but #5 stuck out prominently for me:
Here’s the statistic that hit hard – 90% of CEOs of sub $10M companies have no idea what their company is worth or how the value of their company is created or measured.
CEOs, who have spent virtually every waking hour thinking about their company, planning the next moves of their company, and executing those moves well enough to reach the $10M revenue mark have no idea how their company’s value was or is created!
And my experience is that that lack of knowledge extends to many CEOs of companies all the way up to $100M in revenue.
I recently concluded an assignment with a sub-$10M skin care company that doubled their revenue to over $10M in just one year. How? By diving deep to determine their company’s true value proposition, and working with the CEO and COO to leverage that value proposition into the operational outcomes that create heightened company value.
That’s the secret. It all starts with the core value proposition. The four other pathways for revenue growth that Inc mentions – Alignment, Discipline, Predictability and Endurance – all flow from that value proposition. Those four pathways leverage #5, the value proposition, by creating outcomes where the whole is greater than the sum of its parts – the prescription for value creation.
The article concludes by saying that “leaders can’t create value if they don’t understand how value in their businesses gets created.”
I couldn’t agree more. Read the empirical research supporting their conclusions. It is very compelling.