What Is Growth - Role, Mandate And Strategies

What is Growth: It’s Role, Mandate & Strategies

Growth has become a buzzword: Different meanings to different people in different continents. Let's pick up the pieces. What is Growth. What it's not. Why you need a Growth team!
Reading time: 7 Minutes
Share this blog post:

Table of Contents

Growth ≠ Marketing

Let’s dive straight into it: Growth is not Marketing! 

Why and when these two got mixed up is a discussion for the ages and includes different approaches between the US and Europe and the re-branding of Digital Marketing and Performance Marketing to the euphemism that is ‘Growth Marketing’

On the Product side you will come to hear of the head-turner debates around Core Product and Growth Product and endless discussions on who is responsible for what – and when? And where’s the demarkation line? 

IT’S . A . MESS!

It reminds me of the much-missed George Carlin and his infamous standup routine where he jokingly asks why a commercial pilot is referred to as a ‘captain’? It’s a pilot unless it’s a military flight.

And with Growth: A Head of Growth is not a Head of Marketing or a Head of growth Marketing and shouldn’t be expected to head up performance channels. Similarly, despite Growth being closer to Product than it is to Marketing, a Head of Growth is not a PM either. 

Just recently, a contact of mine joked that “there are different types of growth but only one with a capital G”. It’s just as nonsensical but I found it funny and poignant enough to move forward capitalising the real Growth in this article from here on. 

Ok, enough of all that. Will the real Growth please stand up! 😎

How about Pricing? Product bundling? Discounts? Segmentation?

A lot of this falls under the Product Marketing (PMM) function and I’ll be looking at the alignment between Growth and PMM, as well as CRO (Conversion Rate Optimisation) in a separate article.

This should be an interesting debate not least since Airbnb founder Brian Chesky announced alignment of the traditional PM function closer to PMM. Article and thoughts to follow!

The Role and Mandate of a Growth Team

Growth in many ways is about enablement; reducing frictions along the user journey or user experience and from touchpoints.

An ideal matrix has the Growth team operate independently, possessing end-to-end responsibility across the entire funnel and touchpoints; from acquisition to retention and everything in between. 

Here are some key responsibilities:

  1. Take charge of all product Growth areas, including value propositions, GTM (Go-To-Market) strategies, as well as Growth frameworks and primary KPIs. Focus is usually on Onboarding and Retention but not exclusively.
  2. Data is at the heart of how a Growth team operates: Collect, analyse, test and repeat.
  3. Translate business needs and product goals into OKRs.
In his book ‘Hacking Growth,’ Sean Ellis further explains the responsibilities of a Growth team as follows:

“(Growth teams) should also work on customer activation, meaning making those customers most active users and buyers, and figuring out how to turn them into evangelists.
In addition Growth teams should work on finding ways to retain and monetise customers — that is, both keeping them coming back and increasing the revenue generated from them — in order to sustain long-term growth. So often, too much effort is focused only on acquisition of new users and customers, who then, in so many cases, quickly disengage.” 

Lever 1: Increase the Rigor of Your Project Selection Process

‘High Output Management,’ a highly influential book on management by former Intel CEO Andy Grove emphasises the importance of detecting and addressing problems in a production process at the earliest stage possible.

Similarly, in Growth, every experiment carries an opportunity cost. Therefore, it is crucial to adopt a rigorous project selection process that calculates the expected value and estimated return on investment (ROI) for each project.

The formula for calculating expected value is as follows:

To estimate the number of new active users, it’s beneficial to develop a hypothesis on the metric you aim to improve and model its impact.

For example, if you believe a new email subject line will increase the open rate by 5%, you can estimate the incremental new users by multiplying the number of clicks from the email, the percentage of clicks from dormant users, and 0.05.

Lever 2: Increase the Number of High-Quality Project Ideas

Once you have a robust project selection process in place, the next step is to broaden the pool of high-quality project ideas. Instead of relying solely on the Product Manager, foster a culture where every team member contributes experiment ideas. This bottom-up approach ensures a greater quantity and diversity of ideas, leading to increased innovation and creativity.

Encourage engineers, designers, and analysts to actively participate in ideation and provide them with proper training and feedback to improve the quality of their suggestions. By leveraging the collective intelligence of your team, you can generate a pipeline of valuable experiment ideas.

Lever 3: Maximise Impact of Every Experiment You Ship

The third lever for driving Growth is to ensure that you’re maximising the impact of every experiment your team ships. This lever is closely related to building a bottoms-up culture within your team. Each engineer should take ownership of the experiments they are assigned to, even if they weren’t the original idea generators. Ownership means actively striving to improve the experiment’s impact by enhancing the initial idea or proposing additional variants to test.

By empowering the engineers working on the experiments to provide suggestions and find ways to optimise their impact, you can squeeze the maximum value out of each experiment. With a large number of experiments being worked on, it’s impractical for a single person to deeply analyse every idea. Therefore, taking a bottoms-up approach allows those with the most familiarity and involvement in an experiment to contribute their insights and ideas.

Encouraging a culture of ownership and continuous improvement ensures that you don’t leave any opportunities untapped. It allows your team to make the most out of each experiment and drive significant Growth.

Evolving Your Portfolio Over Time

While it’s essential to maximise returns on your portfolio, it’s equally important to understand how the composition of your portfolio needs to adjust over time. Growth teams typically go through three stages, and their allocation between different project classes should evolve accordingly.

Startup Stage

At the early stage of a startup or when working on a new area within a mature company, there are many unknowns and low-hanging fruit to explore. Foundational aspects such as dashboards and experimentation frameworks may still be missing.

During this stage, you should aim for the following allocation:

  • Iterative Experiments (33%): Focus on securing some early quick wins to demonstrate the team’s ability to drive results and build confidence.
  • Investments (33%): Allocate resources to establish essential infrastructure and systems, such as logging pipelines and reports.
  • Big Bets (33%): Take calculated risks by exploring untapped areas and experimenting with a few significant initiatives to shape a long-term strategy.

Growth Stage

After gaining traction and understanding what works, the team enters the Growth stage, which can last for several quarters or years. During this phase, the focus shifts towards iterative experiments and driving impact.

The recommended allocation is as follows:

  • Iterative Experiments (70%): Channel the majority of resources and effort into conducting iterative experiments that have a higher probability of success and impact.
  • Investments (15%): Continue making investments to enhance the team’s capabilities for driving long-term impact.
  • Big Bets (15%): Pursue some big bets that offer potential for opening up new opportunities in the future.

Mature Stage

Eventually, a Growth team may reach a mature stage where they have optimised existing strategies and tapped into most available opportunities. At this point, you need to evaluate whether it’s time to pause or break out of the local maxima.

The recommended allocation for the mature stage is as follows:

  • Iterative Experiments (30%): Reduce the time spent on iterative experiments but continue working through the backlog of high-potential ideas.
  • Investments (10%): Pause most investment activities unless they are directly tied to the big bets.
  • Big Bets (60%): Increase the focus on big bets to explore new areas and disrupt existing strategies. These big bets may require iterative optimisation and a long-term view to surpass the existing control experience.
it’s important to understand how the composition of your experiment portfolio needs to adjust over time. Growth teams typically go through three stages, and their allocation between different project classes should evolve accordingly.
it’s important to understand how the composition of your experiment portfolio needs to adjust over time. Growth teams typically go through three stages, and their allocation between different project classes should evolve accordingly.

Conclusion: Unlocking New Opportunities for Growth

Understanding the distinct nature of Growth (‘capital G’ and E2E!) compared to Marketing, will enable creating a Growth team that has the mandate to operate independently and self-sufficiently end-to-end (E2E) across the user journey and all touchpoint experiences – on- and offline. 

By fostering a bottom-up culture, where every team member is encouraged to contribute with hypotheses and experiment ideas, you enable creating a rich pipeline of potential growth drivers.

Evolution than revolution: Allow the team to adopt this new apporach and culture over time. As a team you will gradually get stronger at identifying growth opportunities, building up confidence and quality across iterative, investment and big bet projects and over the evolution from Startup and Growth stage to Mature stage. 

Team empowerment must be at the heart of how this Growth team operates and I will discuss the setup of a Growth team in detail in another article. 

By effectively implementing these strategies and continuously adapting to the evolving needs of your Growth team, you’ll be prepare for driving incremental and lasting success of your product. 

Remember, Growth is not just a single department’s responsibility but a collective effort that involves cross-functional collaboration, data-driven decision-making, and a relentless focus on delivering value to your customers. 

Author Profile

Fractional CMO, strategist, advisor. Prev. Senior Growth Architect at BCG Digital Ventures. Interested in Innovation, leadership, disruption & change.

Share this blog post:

Get updates on latest posts