What Is Growth - Role, Mandate And Strategies

What is Growth: Its Role, Mandate & Strategies

Growth has become a buzzword with different meanings to different people in different continents. Let's untangle the web: What is Growth. What it's not. And why you need a Growth team.
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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 involves different approaches between the US and Europe and the re-branding of Digital Marketing and Performance Marketing to the euphemism that is now widely called ‘Growth Marketing’.

On the Product side you will come to hear of the head-turner debates around Core Product, Growth Product and endless discussions on who is responsible for what and when, all while everyone is constantly redrawing the demarkation lines.

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. 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 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!

IT’S . A . MESS! 

So, we established it’s a bit of a mess and it’s shaking organisational structures. Could it be because of “Growth” being such a potent word that everyone feels the need carrying a piece of it like a badge of honour? I kid you not, I once saw a “Growth HR” role advertised. 

Growth at all costs

I sort of get it. We’ve come through an era of digital products where investor logic was oftentimes that of “user growth trumps product vision and monetisation strategies”. So, everyone got busy acquiring users, creating “communities” and trying to keeping the users engaged just long enough so that the SLT could ideate a product vision or miraculously come up with a monetisation strategy. Failing that, you’d seek additional investment to extend the runway for another 6 months based on those insane user acquisition stats.  

Some of us have been there and the madness definitely created unicorns. Occasionally it worked, mostly it didn’t but the success stories gave enough creds to someone’s half-cooked startup idea. No-one would think of building a rocket after take-off. So, why do it it in business? 

It should now be plain to see how a Head of Marketing or Head of Performance Marketing role became rebranded Head of Growth or Head of Growth Marketing.

It reminds of the much-missed George Carlin and his infamous Airplane standup routine. In it, he questions cheekily why commercial pilots are referred to as a ‘captain’? Carlin always one cutting to the chase claims, “(…) it’s a pilot, unless it’s a military flight.”

Doesn’t it feel similar to what’s happening in Growth? Why are we inflating and confusing everything?

Of course, context is not unimportant. Different scenarios require different setups; B2C, D2C, B2B, B2B2C, marketplaces, e-commerce, SaaS …  

In the truest sense of the word a Growth team’s responsibility is maximising the Revenue and LTV metrics.

In an e-commerce B2C scenario the Marketing team may have full Revenue and LTV ownership. However, if you’re operating a SaaS or mobile app your Head of Marketing and their team may not be able to fulfil that responsibility as they don’t own the full user journey. Here the Head of Marketing shares LTV and Revenue with other teams across the matrix – depending on your structure, this can include Product, Sales and Product Marketing. 

And that’s where a dedicated Growth team may come in. 

The Role and Mandate of a Growth Team

An ideal matrix (it hardly ever exists) 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.  Key Growth team responsibilities can include:

  • Taking 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.
  • Data is at the heart of how a Growth team operates: Collect, analyse, test and repeat.
  • Translate business needs and product goals into OKRs.

Enablement & Innovation

In a sense Growth is about data-informed enablement and innovation of every touchpoint tangible to the user; from acquisition to retention.

  • Enablement in the sense of constantly seeking to reduce frictions through optimisations, also referred to as experiments, from the user journey & -experience with the objective to connect the user with the product and enable them to experience the value of it.
  • Innovation in the sense of frequently identifying and testing new opportunities and approaches to attract, engage and convert.
In his book ‘Hacking Growth,’ Sean Ellis further outlines the end-to-end responsibilities of a Growth team:

“(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.” 

Structuring your innovation & optimisation roadmap

Knowing the Growth team’s cross-functional nature and their full-funnel responsibilities, let’s look at how the team is structuring projects and workload into an optimisation and innovation roadmap. 

The team needs clearly defined objectives and agreed ways of working based on shared frameworks.

I won’t dive into the possible Growth team structures in this article but to support the next points I’m sharing three quite different scenarios as examples to illustrate why stures and frameworks can make a Growth team either win or fail. 

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.

Marketing attracts.
Product builds.
Growth connect.

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 entire user journey and all touchpoints the user can experience; on- and offline. 

Evolution than revolution

Allow the team to adopt the new approach and culture over time.

Equally, over-communicate this with your SLT ahead of assembling your Growth team and agree on expectations. 

As a team you will gradually get stronger at identifying growth opportunities, you’ll build up confidence and quality across iterative, investment and big bet projects and over the evolution from Startup and Growth stage to Mature stage.

But don’t make the mistake assuming anyone outside your team or squad is aware of that and the timelines if it. 

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. 

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

And 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. 

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