Are Growth and Marketing Bad?

It might seem odd to start out a marketing workshop with this question, but it was how we got underway several weeks ago in a presentation I did.

That’s because, as I interact with the staff of some non-profits, I hear more often these days statements like, “we need to improve our services to our current members before we pursue growth”, “we already have the members who matter”, or related to marketing, “we don’t want to sell to our prospects and members they will be drawn to us by word of mouth if we only provide value.”

There is a kernel of truth in each of these statements, but they can also become the road to organizational disaster because they make stagnation and decline permissible instead of a warning sign it should be.

Here is the case that I made for growth in my presentation. Since the leaders I was speaking to were all associated with religious organizations, I decided to begin my discussion by drawing from the wisdom of some ancient religious texts.

The first taken from the Jewish Tanakh (an acronym for “Torah, Prophets, and Writings”) or the Christian Old Testament says: “And God said to them, ‘Be fruitful and multiply and fill the earth and subdue it and have dominion over the fish of the sea and over the birds of the heavens and over every living thing that moves on the earth.’”[1]

This is one of the first recorded commands. But even more, fruitfulness and growth almost seem to be woven into the DNA of mankind.

The second text says, “Now after a long time the master of those servants came and settled accounts with them. And he who had received the five talents came forward, bringing five talents more, saying, ‘Master, you delivered to me five talents; here I have made five talents more.’ His master said to him, ‘Well done, good and faithful servant.”[2]

Again, there is calling to take what we have been given and not bury it in the sand, but generate a good return or producing growth.

In a modern day context, Michael Treacy in his book Double Digit Growth puts the issue of growth this way, “Companies decay when they stop growing”.

I also shared with this group that there are some very practical reasons why growth is important. I highlighted some of these in my post Characteristics of Growing and Declining Associations.

When we look at marketing instead of growth issues, everyone can site poor, unethical, or ugly marketing examples. But these examples do not define marketing. Marketing is actually a tool – like a hammer. A hammer can be used to build a beautiful home or it can be used as a weapon. So the tool of marketing should not be judged by how one person or organization uses it.

Here is my operative definition of marketing: Marketing is the discipline of establishing a product and communicating it using the best message, to the best market segments, with the best marketing channels and techniques to maximize the return on investment.

Putting the best product in the best person’s hands in the best way should make sense for any organization.

Well that is my short defense of growth and marketing. Feel free to point out other perspectives.

[1] Genesis 1:28

[2] Matthew 25: 19 - 21


Kevin said...

Tony, back in the mid-90s when I worked for a state association, I visited one of our most successful members. He'd started his company by himself and built it into a thriving concern. In fact, he'd taken the money from his core business and plowed it into many other business concerns, including real estate and other operations, and lived a very comfortable life.

I had the opportunity to sit in on one of his company management meetings and afterwards I asked him about the growth goals that were mentioned in the meeting. He said that most of his personal money came from other businesses he had gotten involved in, while revenues from the original company were invested back into it, in order to grow it. I've never forgotten what he told me: "We try to grow every year," he said, "because it's important that the employees feel like they are part of a growing company."

Whether you are talking about a private business or an association, I think that the same core desire holds true. As you suggest, growth is hard-wired into our genes. Employees, members, donors -- everyone wants to feel that they are part of something that is growing.

However, I think that there are different ways to measure growth. Too many organizations fall into a trap of measuring growth by hard membership numbers. This is because they have chosen to use the simplest of metrics. But there are other, perhaps more important metrics -- depending on type of organization -- perhaps revenue per member, or number of clients/people served if you are a service org. Or any number of other possible metrics. The important thing is to figure out which metric is important, measure it, and grow it.

Ultimately, though, if an organization is to succeed, revenue growth has to be considered. You may recall some months back there were many blog posts going back and forth from a few association folks who argued that "growth doesn't matter." I wondered then how many of them would be willing to take a cut in pay next year when the revenue didn't grow, but the rent grew, and the vendor fees grew, and the cost of printing grew, and the hotel rates grew, and the airfares grew ....

Growth is good. You can measure "engagement", or you can argue that you are serving the mission whether you are growing or not...but ultimately, an organization that doesn't grow -- some way, in a metric that's important to the organization, but ultimately, it has to be about revenues -- is just a stagnant organization. Eventually your board will see that it's stagnant, too, and question it. And who wants their epitaph as a board member to be "we kept things pretty much the same year after year, but by god, we fulfilled the mission"?

Tony Rossell said...

Kevin -- I love your comments. You are right on target. Jim Collins talks about the hedgehog concept where you articlutate a growth metric and combine it with your passion to help an organizations focus on growth. I am very comfortable in an organization using varying metrics, but at some point as you stated there has to be revenue in order to keep the lights shining. Thanks for your perspective. Tony

Jamie Notter said...

I particularly like Kevin's comments about the metrics. The "growth is good" mantra is simply too high level. Meaningful growth is what's needed. And if you pick the wrong metric, you may end up making growth impossible after a while. Before you tackle growth, you need to show that you have a more nuanced and thoughtful understanding of how your organization really works and succeeds.

Tony Rossell said...

Jamie -- Thanks for sharing. Baseline, you, Kevin and I agree that every organization needs growth. I also agree, you need to have a thoughtful growth plan. One pitfall that some organizations can fall into is analyzing and planning without action. I am working with a number of organizations now that have had sustained declines in just about any metric that you would want to apply, but were frozen in evaluation instead of action. I am working on a follow up post that outlines how to move growth forward. I hope to share it this week. Tony