Growth Partners

Growth Partner

Working with startup entrepreneurs, I am often asked “What else should I be thinking about?” Invariably the answer is “what are you doing to create growth partners?”

The experienced startup entrepreneurs will think through and develop plans for a channel strategy to get to market.  Yet, most entrepreneurs don’t think in terms of growth partners in the insightful way that Mack Hanan has published for 20 years.

Mack Hanan in Competing on Value describes the importance of a Growth Partner:

“How can you grow your business?

“You cannot.

“You can only grow someone else’s business.  His business growth will be the source of your growth.  By growing, he will force growth back upon you because he will want you to grow him again.

“The businesses you can grow have a name.  They are called your major customers.  Their growth must be the objective of your business.  The capabilities you require to grow them must be your asset base.

Growth requires a partner. A growth partner is a special kind of customer.  He is a customer whose costs you can significantly reduce or whose profitable sales volume you can significantly increase.  In one or both of these ways, you can improve his profits.  This is the basis for his growth.  It is also the basis for his contribution to your own growth.  As the two of you grow each other, you will become mutually indispensable.

“If you cannot grow a customer, you cannot partner him.  You can continue to do business with him, buying and selling, but the maximized profits of growth will elude both of you.  If all your cusotmers are buyers instead of growers, you will be a slow-growth or no-growth business.  None of your customers will be growing you because you will not be growing them.”

It is a joy for me to see the “Ah Hah!” expression after a few moments of thought on the part of the entrepreneur.  Until this moment of comprehension, I think most entrepreneurs believe they are in control of their own business. Hanan’s simple question “How can you grow your business?” with the counter-intuitive response “You cannot” is an eye opener for the entrepreneur.

As you think about your business, who are your growth partners? How are you helping them grow their business every day?

This entry was posted in Idealized Design, Innovation, organizing, Relationship Capital, Value Capture. Bookmark the permalink.

3 Responses to Growth Partners

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