The Health-Growth Paradox

Business Growth seems to be on top of everyone’s agenda. We have to innovate, do all we can to outperform the competition, transform ourselves into a digital powerhouse and analyze data do uncover even the smallest of anomalies. But is it really possible to grow any organism, that is stressed out, disengaged and resistant to change?

First Marathon

When we set out to run our first marathon, what should we do? To just appear at the start and start running isn’t likely to get us very far. So, we might want to consider some advice from experts first. Like these 7 steps on Active.com:

1. Find the Right Training Plan
2. Fuel and Recover
3. Set Your Goals Right
4. Be Mentally Prepared
5. Get the Right Equipment
6. What to Eat Before the Race
7. It Will be Hard, But You Can Do It

That’s a pretty good start. But there is one vital omission: your health.

If you are being treated for cancer, chances are you might not make it through practice, due to physical or emotional constraints, let alone run the race. Health, as it stands out, is the precursor of most great achievements.

Health as a Precursor for Strength

According to Napoleon Hill: ‘Strength and growth come only through continuous effort and struggle’. While Thomas Fuller stated: ‘Health is not valued till sickness comes.’

Without health, there can be no strength. While growth, coming from continuous effort and struggle, requires strength. So, before we should even consider growth, we have to look at our health.

Tenfore’s Core Dynamics

We like to distinguish between three dynamics. Each with its own traits:

1. Business Dynamics (incl. HR, Finance, Production, Planning, etc.)
2. Customer Dynamics (incl. PR, Marketing, Sales, Service and Success)
3. Market Dynamics

Business Health Indicators

To assess Business Health we could consider a selection of the following financial indicators. Each indicator allows more accurate predictions of future growth. These are some of the KPIs (with the fiscally-specific category):

1. Accounts Receivable (cashflow)
2. Accounts Payable (cashflow)
3. Total Expenses (cost)
4. Inventory Turnover (cost)
5. Debt to Equity Ratio (debt)
6. Current Ratio (debt)
7. Return on Innovation Investment (investment)
8. Inventory Assets (investment)
9. Operating Profit Margin (profitability)
10. Net Profit Margin (profitability)
11. Revenue per FTE (revenue)
12. Net Income (revenue)

These financial KPIs indicate whether a business is healthy enough, and therefore has the strength (potential) to grow.

Customer Health Indicators

But, while Business Health perceives the business-focused operations, we also need to look at the customer-focused operations. To assess the Customer Health we want to look more specific to some of the following indicators:

1. Sales Growth (profitability)
2. Customer Lifetime Value (profitability)
3. Customer Acquisition Cost (profitability)
4. Conversion Rate
5. Customer Satisfaction (NPS)
6. Customer Trust
7. Customer Effort
8. Customer Retention
9. Overall Satisfaction
10. Brand Attributes
11. Active/resolved Issues
12. Complaint Escalation Rate

These KPI’s indicated whether a customer base is healthy enough, and therefore has the strength (capacity) to grow.

Market Health Indicator

Additionally, we should also consider market circumstances — the opportunities and threats. These will greatly determine our future growth. These are some of the indicators to look for:

1. Competitive Comparison
2. External, Industry Benchmarks
3. Changes in Rules & Regulation
4. Government Programs
5. Price Fluctuations
6. Market Integration
7. Technological Innovation
8. Technological Disruption
9. Website & Keyword Analyses (Customer Behavior & Intent)
10. Trends

Market Health Indicators typically are hard to capture, but it is vital to get a feeling for relevant market conditions. So, try and valuate each and every instance, and turn it into a number between 1–10.

Capabilities for Growth

But we’re not there yet. Because, if we plan for growth, we will need to have the right capabilities (tangible and non-tangible). This includes a workforce (but could also include the need for a distribution network or storage facility). From a staff point-of-view make sure you measure:

1. Employee Happiness, Engagement, and Turnover (organization)
2. Openness to Innovation and Change (organization)
3. Adherence to Company Values (organization)

ROUNDMAP™ Dashboard

We are working on a digital dashboard that will allow you — and every employee you want to engage — to monitor all of the relevant health KPIs.

The ROUNDMAP™ Dashboard will include just three dials — but you will be able to drill down to each of the underlying KPIs:

1. Business Health Indicator (BHi)
2. Customer Health Indicator (CHi)
3. Market Health Indicator (MHi)