What CEOs Get Wrong About Growth | Khorus What CEOs Get Wrong About Growth | Khorus

What CEOs Get Wrong About Growth

It recently occurred to me that most CEOs think about growth backwards.

Whenever I’m talking to a CEO about growth, what they usually mean by “growth” is “more sales.” Sales is both their goal and their means of achieving that goal. Their thinking doesn’t go a lot deeper than that.

But this is a simplistic understanding that doesn’t get down to the true driver of growth. The only way a CEO can grow a business in the long term is if they hire great people and make them productive.

That means sales isn’t your real growth driver. Your real growth driver is getting the right people on the bus and empowering them to do the right things. It’s hiring great people and making them productive. That’s true no matter what you’re selling and no matter what your specific growth strategy looks like.

Like many things we get wrong today, this “sales first” way of thinking is rooted in a manufacturing mindset that worked in 1919 but doesn’t in 2019.

Back then, people were not a significant bottleneck in the growth equation. You came up with new products, built the manufacturing process, and measured your success in sales. Most of your employees didn’t need to be anything more than muscle. There was always someone else to man the machine. People were a commodity.

Not so today. In a creative economy, people are the product. And that means that it’s not “sales” that drives growth long term. It’s the organization’s ability to hire great people and make them productive.

When I ran NetQoS as CEO, we made this our priority. “People are our most important asset” wasn’t just a cliché to us. Our focus on attracting the right people and bringing them up to full productivity was fundamental to how we operated. I have no doubt it’s how we delivered 31 consecutive quarters of double-digit revenue growth.

Both parts of this growth driver are required. It’s possible to hire great people but then screw up the process of making them productive, for example. To grow long-term, you have to also master the process of training, motivating, and engaging people.

Every CEO I know would like more growth. But getting tunnel vision on sales isn’t the way to do it. Sales is merely the result of getting a lot of other things right—from product creation to marketing to the selling process itself.

Underlying all of that is the one fundamental growth driver of modern businesses: the ability to hire great people and make them productive.

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