Growth is a relatively new function in larger organizations, but what does it entail? A growth team typically focuses on increasing the business’s performance against a key KPI such as users, usage/adoption, revenue, or retention. While the Growth team is often tasked with increasing one or more KPIs, it can also provide additional benefits such as insight and learning or assisting in validating product-market fit.
Growth Based On Specific KPIs
The growth team is best recognized for its intensive attention to and improvement of your key performance indicators (KPIs). The growth team will understand the business’s figures (i.e., client acquisition, activation, revenue, and retention) and will develop and execute plans to increase those numbers in order to meet the stated growth target.
Growth teams are composed of individuals with expertise in product management, marketing, development, data science, and analytics, as well as agile procedures. They will use these capabilities to swiftly test and improve their focus-KPIs through the use of data-driven decision-making. While the growth team should be intimately familiar with your business’s figures and the levers that will most effectively change them, it is vital to remember that they are not a reporting function.
Give Insight and Learning
A strong growth team will invest significant time in delving into the most crucial numbers to comprehend what is occurring in the business and initiate an iterative testing process to enhance the figures. The net result of all this data-driven experimentation is that they, more than any other team, begin to have a thorough understanding of what drives business outcomes and what does not.
When they gain knowledge about what moves the numbers, they become a valuable asset, providing two benefits to the organization: the first benefit is that they can educate the broader business about what works and what does not, thereby improving decision-making across the organization. The second benefit is that, by leveraging their knowledge of what works and what does not, or their ability to drive an experimental approach, they can assist you in reducing risk in transformational projects with validated, data-driven learning.
Simply put, some businesses embark on significant transformational endeavors with little assurance that they are on the right route. This technique is appropriate in some circumstances; however, in the majority of cases, a few simple tests can help you understand the dynamics and guide your judgments on the larger effort with less risk.
Determine If The Product-Market Fit Is Valid
Most people would claim that the growth team is not accountable for product-market fit. Product market fit should be the Product Management function’s primary objective. While I concur, I believe that the growth team cannot perform in the absence of product-market fit. You cannot scale and build a fundamentally flawed business.
Before the growth team can go to work, product-market fit validation is required. If the product management function does an adequate job of determining product-market fit, the growth team can assist in confirming and validating it through benchmarking and improving key performance indicators.
On the other hand, if you have not yet established product-market fit or have made some errors, you may need to work with the product team on the basics before initiating expansion initiatives. The Growth team may aid with this effort by conducting tests against key KPIs to determine where product and market fit concerns exist and collectively resolving them prior to initiating scaling operations.
