(This post comes with an 18 question checklist of things I would do if I was your VP-Growth today. Get the checklist at the bottom of this post)
Part of every team’s identity is how they measure success, and each team measures their success in different ways. Product teams might be measured by NPS, feature output, or possibly by metrics. An engineering team’s success may be measured by uptime and reliability among other things, and a design team’s success could be measured on usability.
But measuring the success of the growth team is a tougher question. Every team from product, to marketing, to operations indirectly influences growth. This leads to some questions and challenges: “Why have a growth team? Doesn’t everyone own growth?”
But when everyone owns something, it is owned by no one. Responsibility is diffuse, and the thing doesn’t get done.
By contrast, when growth is a function and team that’s been been carved out within the organization, that group takes direct ownership. Their success comes to be measured on the quantifiable impact they have on growth rate and/or KPI’s that directly influence growth rate.
The most successful growth teams stand out because they excel at figuring out two deceptively simple questions:
- What factors impact growth rate?
- Where are the opportunities to influence those factors?
In other words, they seek out direct impact. This is easier said than done. A number of team and organizational changes need to be put in place to make this happen. Here are the 5 things that needs to happen to for a growth team to seek impact.
1. Opportunity Driven, Not Ideas Driven
How do items that get worked on get determined on your team? A typical conversation I see is...
Person One: “What should we work on?”
Person Two: “We should implement this email, optimize this page, and clean up this flow”
Person One: “Those are great ideas. Why should we do them though?”
Person Two: “Because I think they are so terrible right now.”
I would generally characterize this process as idea/tactic driven. The conversation starts with ideas/tactics and those idea/tactics stem often from a personal opinion or gut feeling.
Another common (but incorrect) path stems from an overuse of the “customer driven” mantra. It’s great to listen to customers and to be a customer driven organization, but if needs aren’t balanced, it can become a case of the squeakiest wheel getting the most grease -- teams end up organizing around the problems of the loudest customers, which may not always be the highest impact problems for other customers or for the business itself.
Both cases put the cart before the horse. An idea driven, or purely customer driven, approach fails to answer questions such as:
- How many users is this a problem for?
- If we succeed, what will the potential impact be on growth?
- Compared to other problems, is this the biggest problem we can take on?
In order to seek impact you need to start with prioritized areas of opportunities, not just ideas or even prioritized ideas. Problems can be noisy, but they don’t necessarily correlate with being the biggest growth opportunity.
Identifying areas of opportunity ideally involves 4 things:
- Quantitative Evidence
- Qualitative Evidence
- Ceiling To Improve
- If You Improve, Large Impact On Total Outcome
Combining all four of these things in a forward projecting growth model is the best way to identify the largest areas of opportunity. If you want to have direct impact on growth rate, start with areas of opportunity, then work your way to ideas, tactics, etc.
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2. Challenge The Why
The next way that growth teams should seek impact, not activity, is to challenge the “Why.” To make sure the team is working on the most important things, managers must constantly question the "Why" behind the ideas their team is pursuing. To question the “Why” means to dig into how those ideas were chosen from among all of the options. This regular practice of asking “Why” forces team members to dig deeper and justify their choices based on areas of opportunity rather than other rationale.
A way to test this is to ask a team member, “Why are you focusing on this particular tactic?” A good answer will follow a line of thought similar to:
“We found this big area of friction, if we can improve it to x it will have y impact, so we came up with this set ideas to address the issue.”
Notice that this answer start with describing the opportunity, then works towards possible ideas/solution.
3. Recruiting A Different DNA
Everyone is motivated by different things. We tend to choose what we work on based on those motivations. Some designers love the craftsmanship of pixel-perfect design, some engineers want to solve the most technically challenging problem, and some marketers get excited about coming up with the most creative campaigns. To build a truly great company all personality types need to be represented.
But for growth teams to effectively implement a Seek Impact approach, it’s critical to hire people who are motivated first and foremost by driving impact. The problem is that the most impactful item may not be (and often is not) the most technically challenging, the most creative, or the most beautiful. When the purpose of the work is not aligned with someone's motivations it ends with unhappy team members.
What this means is that the template for an engineer, designer, or product manager from a core product team is probably not the same type of engineer, designer, or product manager you want working on growth projects. You need to recruit a different type of DNA in order for the growth team to be successful.
4. Defining Ownership/Authority
Growth rate is a function of the entire funnel - Acquisition, Activation, Retention, Referral, Revenue. If we improve any step in the funnel, growth rate will increase. The problem is that this runs counter to how most teams are structured in which different product/engineering teams own different territories of the product.
This produces 95% of the internal friction when implementing growth teams. The growth team is given the success measure of growth rate, they find the largest opportunity, they have the right skillsets on the team, but then when they go to make changes you end up with some version of “This is my lawn, get off!”
Managing and solving for this depends on the cultures and leaders. If you want the growth team to own growth, then the rest of the organization must give them the authority to influence the right areas. Otherwise, you’ll end up with a “declawed” growth team that’s not set up for success.
5. Measure and Reward Impact, Not Activity
Once you have the key pieces in place - a team of people motivated by impact, with the authority to influence all levels of the funnel, running through the growth process - the last step is to reward and celebrate growth produced rather than activity.
I see a lot of teams celebrate and reinforce activity -- feature releases, campaign completed, etc -- but just because they are generating activity, doesn't mean those activities create growth. Ideas and activity are inputs into, but not equivalent to, actually having an impact.
A few examples of how to reward impact, not merely activity:
- At weekly growth meetings, don’t talk about what experiments you ran, instead discuss the impact that the experiments had and what you learned from them.
- Celebrate that you grew X% week over week, not that you completed a release.
- Performance reviews should also be oriented around impact, rather than things checked off the list.
In these ways, the best growth teams create a tight relationship between impact and reward, reinforcing seeking impact as a core principle.
My Checklist If I Was VP Growth At Your Company...
I would examine your team’s process on the following aspects:
- how you measure success,
- how you identify areas of impact
- what tactics you choose to pursue
- how you hire for the growth team
- what you do to define, celebrate, and reward success
To dig into a growth team’s strengths and weaknesses, I run a checklist assessment covering each of the 5 areas of the Seek Impact approach:
- Measuring Success
- Areas of Opportunity
- Challenging the Why
- Hiring & Authority
- Measuring & Rewarding Impact
I’ve created a downloadable version of the full 18-question checklist, that you can use to walk yourself or your team through this process. To receive it by email, please enter your email below.
Get The Checklist Here