How High-Performing CEOs Inventory Bets for Revenue Growth

In SBI’s CEO growth planning survey, it’s not surprising to see that nearly two-thirds of CEOs admit to having developed contingency plans for their businesses given the current macroeconomic conditions. However, our interviews revealed these plans are overly focused on rapid cost-takeout to preserve earnings in the face of a recession. In our view, these contingency plans lack clarity on defending growth bets or reallocating expenses to preserve – or even accelerate – growth in the face of recession.

Continuing our series on annual planning, last week, we established how your future growth is dependent on your current fact base. Aggregate data from the team has given a clear understanding of where your company lies today. Now, it’s time to figure out which growth levers to pull outside of cost-cutting measures. Everyone knows how to cut costs, but that alone will not suffice. CEOs need to inventory potential growth bets by directing their executive leaders to gather with their teams to discuss and evaluate the possible levers to exact strategic priorities. Then, Commercial Teams create an inventory of bets backed with a business case for each bet to help the company prioritize how to drive strategic growth.

Go-to-Market functions involved in inventorying bets:

• Sales
• Marketing
• Product
• Customer Success
• Finance

How to Inventory Bets

• Share the established fact base - Revenue Operations led the charge in gathering the appropriate data and the CEO shares the established fact base with the executive team. This includes the look-back facts about company performance, forward-looking beliefs, and Revenue Growth Maturity level.
• Commercial Teams inventory bets - Executives meet with all impacted teams to establish beliefs about the fact base and make bets on how to adjust and meet strategic goals. A business case is developed for each bet to help prioritize efforts and drive clear decision-making.
• Review the list of bets - Executives come back together to share and discuss their beliefs, bets, and business cases. Potential plans for executing bets are reviewed.  To consolidate the inventory of bets across the organization below is a template to help categorize and display the bets for evaluation and selection:

CEO uncertainty often manifests as broad-reaching growth strategies with (too) many active bets. Within PE-backed tech and tech-enabled services sectors, SBI has consistently seen a tightly-defined, singularly-focused value creation strategy outperform businesses claiming highly-adaptive agile growth strategies. Don’t wait and allow reactivity to govern decision-making. CEOs need to critically examine if greater attention should be paid to ensuring near-term, durable growth to set up longer-term financial health. Evaluating all of the ways you can achieve growth with the same method across commercial functions will give CEOs a clear landscape of tightly defined growth levers and which bets to place ultimately driving focused execution on the growth strategy.

Need recommendations on how to identify and focus on potential growth bets outside of rapid cost-cutting? Click here to access SBI’s annual growth planning guide.