Embracing second order effects to unlock business growth

The challenge with building a marketing engine inside an entrepreneurial company is that it requires the business to start managing second and third order effects, and most aren't geared for it. 

Up to a point, a company can afford to grow only through what I call first-order effects. It makes stuff, then sells it, with people doing things directly related to the making and selling. It's a straight line. But at a point, to break through a growth ceiling, you need to start introducing complexity to leverage exponential effects. One way to do this is to manage a brand that proactively shapes reputation and run promotions to influence market behaviour. In short - build a marketing function

When a business starts taking marketing seriously, it pulls on the strings that influence the actions leading up to the sale.  Marketing, specifically the communications part, is one removed from sales. Herein lies the challenge!

Managing first-order effects can only grow a business so much. Once the network effects of the owner and shareholders are depleted, the easy sales dry up, at which point it is time to learn to go beyond the obvious. 

One of the biggest obstacles to effective marketing is that it requires the owner(s) to step back and deliberately let go of some control. It is typically when an entrepreneurial venture starts corporatising, meaning implementing a marketing plan is often a precursor to digital transformation and hierarchical management.

Companies where the owners struggle to let go of control battle with marketing and establishing an independent brand for the business. It tends to also be these businesses that struggle to grow beyond a lifestyle business and into a sustainable company.


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