From the largest corporation to the smallest startup, every company is united by a common goal: Long-term, profitable growth. Strategies are set, visions are embraced, and every employee is mobilized to turn those plans into reality. But all too often, growth doesn’t come.

Universal wisdom tells us that revenue increases when an innovation adds value to the market. That’s when the product or service has reached the people who are supposed to use it. All the while, the marketing organization is responsible for making sure this happens.

Why isn’t this approach working for most companies? Could it be that innovation managers need to play a more significant role in driving business growth?

To answer these questions and more, we spoke with Elia Mörling, founder and CEO of Idea Hunt and speaker for our upcoming Intrapreneurship Conference Stockholm.

Is it possible to engineer growth?

Growth can be engineered, but only with the right mindset. Businesses need to focus more on delivering tangible outcomes. But unfortunately, this is not happening in the marketing organization.

When I ask CEOs which function has the most unclear value from their perspective, the marketing organization is often cited.

Don’t get me wrong: There are some areas of marketing that are data-driven and focused on results. But if you look at the overall spending budget for the organization, most line items – such as brand building – are measured by intangible value over the short and long term.

Personally, I find that it helps to have innovation managers to think all the way through and beyond the innovation creation cycle to help ensure that the intended value is indeed delivered. This is where, I think, growth engineering can help. It provides a holistic view, where sales, marketing, and product development comes together. Closing the gap among these organizations is critical to increasing revenue.

What is growth engineering?

Growth engineering stems from the startup culture, where companies are forced to do more with fewer resources. Because time and money are in short supply in this environment, startups have to show clear and measurable value to secure continued funding and executive support.

This philosophy looks at the business model realistically in terms of three primary goals:

  • Developing your products to increase customer retention
  • Getting people to hear positive news about the product and to identify themselves as potential purveyors of the offering
  • Generating revenue

As a data-driven approach, growth engineering interconnects sales, marketing, and product development around an engine – creating a unified alliance for building a clear path to generating more revenue. This is where digital models are heading.

What does the engine that supports growth engineering look like?

The underlying foundation requires a team that is motivated to do whatever it takes to achieve quantifiable outcomes. This structure is key to helping a business work around growth internally.

The actual growth engine comprises five parts: acquisition, activation, retention, referral, and revenue. The flow between the different components is logical. This design is in direct contrast to marketing operations – where a variety of activities that make sense are happening at once, but are not connected.

These two layers are wrapped up with a structured culture, strategy, leadership, and methodology. Team members conduct tests in two-week sprints, collect data along the way, and make a decision based on the information they have that day. For the business, this move from long-range campaigns and scheduled product launches to short-run experiments and continuous updates can be quite a fundamental shift in operations.

To implement growth engineering, it is best to create a new cross-functional team to gain the expertise necessary to know how marketing, sales, and product development are related and can work together.

This new environment provides the freedom to do things in a radically different way while accepting failure as part of the process.

At the end of the growth engineering lab experience, how do team members go back to their organizations and implement and evangelize what they learned?

One of my clients structured its growth engineering lab to enable team members to split their time between the lab and their organization. Because this approach is not entirely detached from the business, the team generated a synergy of relevance throughout the process. The team members were able to bring back a new mindset, as well as new skills and methods, that they could implement in their day-to-day work to innovate smarter and faster.

Another consideration is allowing more than three people represent the same organization in the lab. Creating a new culture with one person is tough.

But with more people who have acquired the language and concepts of growth engineering, it can be easier to promote the new mindset and capabilities throughout an organization.

How does growth engineering transform marketing, sales, and innovation organizations for the better?

Growth engineering definitely makes everyone humble. All too often, people feel that they are already experts in their field – especially if they’ve been in their line of work for 10, 20, or even 30 years. With constant experimentation and data-driven analysis, preconceived beliefs and past lessons are proven wrong.

In turn, the role of the expert changes from telling a group what to do to helping people ask the right questions, which is quite a culture shift when you think about it. This is the key difference between closed innovation that relies on experts and open innovation that starts with a question.

I helped a startup develop a new wearable by asking an early-adopter community once question each week for nine months. The community always provided relevant answers, but asking the right questions, which were the most relevant to our process, was key.

This new way of working also decreases cost, time, and risk. The openness to conduct experimentation sprints allows new and radical thinking in confined space of time, limiting unproductive financial loss. But perhaps more surprising is the ability to create, build, scale, and deliver an innovation within 100 days.

While these benefits are impressive, growth engineering is really about helping companies close the loop between themselves and the market. The real change happens when the business starts to innovate with markets, rather than for markets. 

Keen on implementing growth engineering at your company? Join Elia’s whiteboard session during Intrapreneurship Conference Stockholm this May.