How To Strike Gold With Your Strategic Growth (For Seasoned Business Owners)

Read time: 5 minutes

Expertise comes from the flawless execution of the fundamentals but a deep understanding of the nuances.

If you must read that opening line again, please do so. It will remind you (and me) that we have far to go but a clear path to get there.

Today, I want to share a nuance of strategic growth I’ve learned over the last 5 years so that you can apply this to your business decisions.

Let me help you strike gold with your strategic growth with a deep dive into drivers and levers.

The terms seem interchangeable because both influence outcomes — but require different thinking patterns and approaches.

• Drivers represent a push force — decisions that propel your business from nothing to something. It’s an action that starts the flow of motion. Think of going from 0 to 1.

• Levers represent a pull force — decisions that alter an existing outcome from one state to another. It’s an action that redirects motion. Think of switching from left to right.

Each has a unique application to business problems, so understanding these forces allows you greater agency over your outcomes.

Let's consider a real-life example of two businesses aiming to increase traffic to their website.

Business A has used only organic growth. Instead of changing the organic strategy, Business A decides to learn and invest in paid growth (i.e., advertisements). This is a push function because previously untapped resources are now channeled into ads.

Business B has used organic and paid growth for traffic. In their analysis, Business B found that Facebook ads perform 3x better than Google ads. They decide to reallocate resources from Google to Facebook. This is a pull function because the existing resource budget is redirected for optimal outcomes.

Don’t use drivers when you need levers (and vice versa).

Levers are an optimization strategy, whereas drivers are a scaling strategy.

Understanding the distinction between the two empowers you to analyze opportunities more effectively.

Their impact on risk:

• Levers use a measured approach to risk management, allowing businesses to mitigate potential downsides by optimizing existing processes and strategies. While often a lower-risk strategy, there is a point of diminishing returns – capping your upside.

• Drivers use an exploratory (but calculated) approach to assess opportunities. While I’ve seen businesses aim to “grow out of problems,” there is the risk that existing problems become bigger with scale.

Their impact on decision-making:

• Levers facilitate an incremental improvement approach. You’re building on top of known knowns, trying to bend the curve upward at a higher rate.

• Drivers require vision and a willingness to make bold decisions that can reshape the business's trajectory. You’re playing with hypotheticals and trying to jump to a new level.

Their impact on business cleanliness:

• Levers keep your work “clean.” This means trying to utilize every minute on growth (and not having to deal with taking two steps back).

• Drivers make a mess. This means baking in the time and effort to clean up what broke (something always breaks, and time spent on cleaning is not spent on growing).

Their impact on time:

• Levers focus on current operations and become more valuable for short-term gains (but also have long-term, compounding effects)

• Drivers involve strategic investments that may take time to materialize but can lead to significant and sustained expansion.

Their impact on change:

• Levers adapt to changes by tweaking and fine-tuning. They are like speed boats on the water, able to make quick adjustments.

• Drivers lead to change rather than merely reacting to it. They are like cruise ships that need to happen ahead of the market.

When should you choose: drivers or levers?

The decision to focus on drivers or levers depends on the specific goals, challenges, and development stages a business faces.

Focus on levers when:

• Operational efficiency is a priority (internal processes, reducing costs, and improving systems)

• Stabilizing financial performance (profitability, cash flow).

• Customer satisfaction and retention are priorities (enhancing the quality of existing products or services).

• The leap to new is too big or would take too long (sometimes, the right step to growth is building a few stepping stones first).

Focus on drivers when:

• Expansion is a priority (new markets, larger customer base, or next level of revenue growth).

• Innovation and differentiation are critical (innovation, new product development, or disruptive strategies).

• Strategic partnerships are key (alliances, mergers, or new access).

• Building a brand presence (awareness, reputation, and establishing a market presence).

The situation will help you dictate the decision.

What happens when you focus too much on levers?

Several challenges arise when only focusing on levers:

• Operational overload

• Struggle to differentiate in the market

• Lack big picture perspective and miss the forest through the trees

• Vulnerability to capitalize on industry shifts or disruptions

What happens when you focus too much on drivers?

Several challenges arise when only focusing on drivers:

• Operational neglect of day-to-day functions and processes

• Resource exhaustion of time, money, and workforce

• Struggle to support increased demand or deliver consistent quality.

• Burnout

Levers mean better; drivers mean bigger, requiring different execution skills and decision frameworks.

With levers, you must:

• Learn to combat perfection and diminishing returns (here are 3 steps to do so)

• Attack one of the value factors (here’s how)

• Be aware of sunk costs

With drivers, you must:

• Acquire a new skill or find someone with that skill

• Close the commitment gap (read this to learn how)

• Plan way more and expect more time for execution

Thank you for reading.

Peter

P.S. If you know a seasoned service-based business owner who feels profits should be much better (for the effort put in), send me an email. I craft impact plans to grow profits by 30% in 30 days.

If you missed last week’s post:

Learn why shiny objects will always lose to old dull ones.

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Welcome to Impact Thinking.

Hi, I’m Peter. I quit my highly-regarded, 6-figure job at Harvard to build a strategy consulting company in 2019.

I’ll help intellectually minded business owners grow profits by channeling strategic, critical, and creative thinking to impact decisions.

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