High-growth strategy specialist, executive advisor, and lecturer at the London Business School, Dr. Rebecca Homkes, explains how growth is a loop, not a line, and lays out the 4 C's that threaten a business, the 6 questions to ask in the middle of a strategy reset, the 3 things thriving organizations have, the difference between a teaching and a learning organization, and how to establish your MUST-WIN battles.

How are you?

Dr Rebecca Homkes: Excellent!

Let's start with your book, Survive, Reset and

Thrive.

Dr Rebecca Homkes: Yeah, I'd love to thanks so much for

asking. So Survive, Reset, Thrive was written in starting

in the spring of 2020 but it was based on frameworks and guidance

that I've been using for for a decade before that, you know,

most of the book is things that I've been doing with companies

who are looking to go on a growth journey, and what

happened in that period of time, which was not dissimilar to

happened in Brexit in 2016 here in the UK, or in 2022 is that

entrepreneur leaders were calling me and saying the same

thing they were saying. Why me? Why now we had this growth

pathway. Things were working, and now we've got this crisis

right. And I found myself saying the same things over and over

again, like, yes, we're facing kind of a change situation, so

we have to survive and stabilize. Then we need to

reset, because the strategy we had before needs to update for

the changing time, and then you can go back to being a Thrive

company, but we've got to go through this loop, and after

repeating the same guidance for weeks at a time, you know, I

just finally wrote it down in an email. It was sent out on a

Saturday night. I got, you know, 100% response rate on the Sunday

saying, this is the most useful thing I've read. I'm going to

send it to every CEO I know. And that article kind of became a

workshop. The workshop became a program, and then about a year

and a half, two years later, it became the book.

Super cool. So one of the things you just

mentioned that I want to pull on this string a little bit is you

mentioned it's a loop. Walk me through that, because I think

when most folks hear this, it's more of a checklist. Okay, we

survived that check. Now we've reset check throughout, but you

mentioned the word loop, so walk me through that.

Dr Rebecca Homkes: Absolutely. You know, everything in growth

is a loop, not a line. And that sounds really simple to say, but

we really love checklists as human beings and send us

managers and leaders of companies we love to be done

with things right when you finally check something off, you

know, develop strategy done, communicate strategy done,

execute priority done. And that's not how a changing world

that we're facing and executing our strategies are in. It's

constantly going to be moving and evolving. So we need to move

from this checklist mindset of how we approach strategy and

growth into this loop mindset. And there's a lot of power in

doing that, right? So survivors that thrive is a loop, and what

happens, let's make it more practical, is you can be in

Thrive mode, and everything can be going great, and there can be

a shock to the system that sends you back to survive. These can

be external shocks. You know? You can have a surprise interest

rate a surprise election, you could have a big macro event

like war or COVID, but you could also have an investor pull out

or lose a major customer, and when that happens, you've got to

go back into survive mode. And we don't want to do that. We

feel once we've gone through the steps to thrive, we'll stay

there. But there's real humility in losing the ego and saying

it's time to survive. Then they can go back to reset again. Then

they can go back to thrive. So we need to embrace this loop

mentality be able to grow through these different changes

that we're facing as we're trying to lead our companies

through this uncertainty.

So let's start with, you know when, and I

really love how you said you have to, you know, embrace the

humility to recognize, hey, we're in survival. How do you

know, other than you coming in saying, Hey, by the way, you

know, or the profits tanking, what are some key

characteristics that, you know, okay, we need to go back, or

this is where we're at.

Dr Rebecca Homkes: I think most of us intuitively know when our

organizations are in that mode. And part of what I'm trying to

do with survive, reset thrive, is give you permission to make

that pause to say, hey, the survive mode is actually not

only opposite of growth, it's part of growth, right? Going

through survive and restabilizing is a critical part

of the growth journey, not antithesis of it. And like

giving you permission, I know that sounds overly simple,

Stephanie, but that's a key part of it, right? Is you've got to

take that pause, because most of us know we just don't want to

admit it without kind of the reason for it. So what happens

when some of your basics are compromised? And I call the

basics the four C's or cash cost customers communication. You

know when something starts impacting our cash flow? You

know when our costs are growing faster than our revenue for a

reason, outside of hyper growth or doing something like a land

grab, when we've lost a customer, or seeing customer

churn, or having issues with our customers, or communication

becomes broken or spotty, or lots of friction, because kind

of go through your four C's. And what I recommend organizations

do is set the baseline, not the goals, but the baseline, like,

where's the minimum any of these four C's should be at any point

in time? And when those get triggered, that's the pause

point to go into survive mode. And there's real power again in

knowing when you're in it and admitting it. Now, I always feel

like I'm badly paraphrasing Fight Club. You know, the first

step is kind of admitting it, but the first step of being

survive is admitting you're in survive, because now we can

handle it right now, we can take all those proactive steps to

stabilize and move again out of survive, because you don't want

to be in survive longer than you have to. But, and there's a big

but, this is a yes, but not a yes. And the longer you refuse

to admit that you need to take that stabilize, you're actually

losing a lot of things that you need across those four C's. So

the simplest is set those baseline triggers for cash cost

customers and communication, and when you start approaching them,

then it's time to take the pause.

So when folks take the pause in your

experience, where have you seen leaders just really handle this

well, like, what have they done to handle this pause,

recognition of survive, etc.

Dr Rebecca Homkes: You know, I actually had this experience.

And, you know, you can just feel proud of an entrepreneur when

they're like, wow, like, you know, you can handle all these

steps. Well, I had a company who, one of their major

companies, you know, spun out a subsidiary. The subsidiary went

bankrupt, so they were facing millions of, you know, euros not

going to be paid to them at the end of the year. And when you're

a small to medium sized enterprise, a couple of million

not coming in does impact you, right? When you're not a major

organization. So we're going into survive mode. You know, a

lot of that cash cost customer Well, actually, three of our

kind of triggers, if you will, have been broken, and they had a

Strategy Workshop scheduled to reset the growth strategy for

the next year. You know, the classic response, which is not

the right one, by the way, is to cancel the workshop, you know,

all hands on deck, focus on operational metrics. He still

got his team together, and they repurpose that time to go

through their survive metrics, you know, make actionable plans

on what they need to do across all the four C's look at their

top priority and say, Okay, what still goes like? What pauses,

you know, what changes? And the team left the most energized I'd

seen them, you know, in a couple of years when what should have

been, you know, one of the worst times they've been in the past

five years. But they use the time to say, we know what to do

here. We've already got the time scheduled. We're going to go

through, survive, we're going to be stabilized. And they gave

themselves a deadline, you know, by the end of key one next year.

We want to see progress on all of these. We're going to be back

to growth mode at by the end of q2 and that's what we want

people to do. The temptation, I want to repeat purposely. The

temptation is to cancel everything related to strategy

and just tell people to be heads down, execution mode. In survive

mode. You are still in learning code. You want people heads up,

listening, learning, getting these feedbacks, emails from the

market, incorporating that in so we can move into reset as soon

as possible.

Okay, so then we move into reset, and my mind

immediately goes to, you know that that on your phone, when

you can't get it to work, you go to the Hard Reset, but the trade

off is you lose everything. I mean, it's like worst case

scenario. You're starting all over. Walk me through what reset

looks like from your perspective and your counsel.

Dr Rebecca Homkes: You know that's funny, because hard

resets do happen, but like all of us with our phones, man, you

don't want them to right? But look, hard resets are, are not

the normal reset. The normal reset. You turn the phone off,

right? You gotta pause and wait a minute, which was probably

good anyway, because you were getting frustrated, right? It

turns back on, boom, you're ready to go again, right? So in

a reset, you pause and with the team, you answer some critical

questions that you need to answer for growth. And those

questions are six, what's going on and how's it going to change,

and what is success? So where are we going to play? How are we

going to win? What could stop us? So what should we do? Go

through those six questions, reset the situation. What are

changing beliefs about the changing time? Reset their right

to win. How are we really going to compete in that changing

world? What's that mean for where to play choices define a

new finish line or where you want to be at the end of the

cycle, address the challenges and then figure out your top

priorities. You know, a normal reset takes kind of a couple of

months for any sort of mid size organization, a couple of weeks

for a very small one could stretch longer for a big

organization, though I'm never happy about it, but that's just

what scheduling happens, kind of in these large organizations,

and the majority of the time. Stephanie, that's what it is.

You go through those six questions, you reset, you

update, and there's power in doing that every three years,

even if you don't feel the situation is fundamentally

changed. Now, occasionally those hard resets do happen, and what

happens is, as you start to go through those questions, you

realize Everything's changed. All the fundamental assumptions

you had that went into your previous growth strategies have

now changed. Completely different situation. Your right

to win is eroded, your where to play choices all need to update

the finish lines you had are now completely outdated, are no

longer relevant. And when that happens, you do need to declare

a hard reset and to make it more practical. We're facing these.

We're watching these in the market right now. We're watching

Starbucks and Boeing and, you know, all of these companies,

Nike, bur. Area going through hard resets right now, and

that's what's happening. The board realized it wasn't

working. CEO out, new CEO in all of these challenges of being

revisited. Now this process take a couple of months to a year.

But you know what hard resets can be? The most powerful thing

that happened for an organization, we sometimes see

the most dramatic growth journeys after hard reset

happens.

Okay, so we've realized things have changed.

We're refocused. Now it's time to thrive.

Dr Rebecca Homkes: Well, first, I appreciate your patience of

asking about survive and reset first, because most people want

to jump straight to the Thrive. All I really want to do is talk

about thriving. Can I just skip to that part? And I originally

joked with the publisher. I wasn't joking, but they didn't

take me seriously. You know, let's only send people the first

eight chapters of the book. And you know, once they've read

those, they can apply because you got to do the hard work of

the survive and the reset first before you can get to thrive.

Because I know my entrepreneurs, right, they jumped right to

chapter 10 because that's the part that they cared about. But

look, thrive is not a given. It has to be earned. And just

because you've reset the strategy, what you also need to

reset is your execution capability. Now, different

strategies demand different things from the organization, in

terms of our hardware, like our processes and wiring, our

software, like our culture and behaviors, the top team that we

need to lead, it our distributed leaders to really guide

execution in this shared understanding. So this

transition from the reset to thrive is actually the really

difficult part, and more friction happens there than the

transition from survive to reset, because we assume that

that's the more simple pathway. But resetting a strategy means

you need to reset your execution capability and capacity as well,

and that could take some time, but you got to be super honest

about what's working and what's not, be prepared to rebuild and

reset, then you can become one of these Thrive organizations.

And it's a simple recipe. Thrive organizations have three things,

strong balance sheets, strategic insights, and they execute with

agility and learning, right? You bring your strong balance sheet

through from the survive phase, your strategic insights from the

reset phase, and then you execute with agility and

learning, because strategy is a living, breathing document, and

we're going to learn and adjust and change as we go. And that's

a key part of being thrive is again, I'm going to say one of

the things you can say to me that really makes me mad is two

things. I'll give you two things not to say to me. Thing one,

just say, oh, Rebecca, we're in heads down execution mode. My

first response is, well, get out of that, right? I want you in

heads up learning mode, right? And this second is, if you ever

send me a document labeled strategy, final, all caps, I

have this new thing now. I don't even open it. I just reply back

to the email and I say, No, it's not never final. We're going to

keep updating and adjusting as we're going.

Very cool. Okay, let's talk about that for a

second, this continuous learning. I think that that's a

huge difference maker between leaders that really do thrive

and ones that don't. But oftentimes there. I think a lot

of folks fight this natural state of, hey, we're here. Let's

not rock the boat and just stay here. And they don't come out

and say, I'm done learning, but their actions show that. So walk

me through this idea and concept about keeping learning a

critical part of this process.

Dr Rebecca Homkes: Yeah, thank you for asking, Stephanie. It is

not only a critical part. It is the most critical part is that

in now close to 15 years of working with high growth and

high performance organizations, I will say quite simply, it is

the number one differentiator. Organizations that learn faster

are organizations that grow faster. It is the ultimate

differentiator, and frankly, differentiator because it's

hard. A lot of us pride ourselves on being learning

organizations, because we do monthly webinars, or we have

town halls, or we have share sessions, or we have book clubs,

or we go to business schools, like all really cool things like

keep doing them, but that's being a teaching organization,

not a learning organization, right? Being a learning

organization is what you alluded to, saying. We don't have all of

the answers yet. So here's the questions we need to ask, using

your customers as learning partners, you know, not just

transactional vehicles, encouraging kind of constant

experimentation and testing and learning while executing, never

assuming that every variable and every metric we have in the plan

is the perfect one, right? Because things are going to

change as we go. And this is a different culture. Now, being a

learning organization doesn't mean that we're changing things

all the time, right? Learning is actually very, you know,

methodical, like engineers can do this learning velocity too.

In fact, they're quite good at it, right? You know, you can

build all of these things forward, but you've got to kind

of, again, break the notion that once something is in a plan, the

plan must be executed. I know it sounds silly, but words matter.

I've said, let's stop calling them strategic plans. There's

something about the word plan, right? It just frames our brain.

Everything in this must get done, and I want it framed as

I'm going to keep learning as I'm going this strategy is just

my best hypothesis of where growth is. Going to come from

over the next three years. Like any hypothesis, I got a lot of

it right and probably some of it wrong. So I'm going to keep

learning and adjusting as I go.

Okay, so now there are strategic hypotheses.

Dr Rebecca Homkes: Yes, I'm just dropping the plan word again.

Frames matter, right? And as soon as our brains are framed

that everything must get done, I get heads down, and I want

people heads up, learning and moving as we go.

Okay, I just have to go back and highlight

two things that you said, because I think they're so

critical and we just don't hear them. One is, you define the

difference between learning and teaching. I've heard it 101

times. People say, hey, we do all these things, but the way

that you turn that, nope, that's when you're teaching. But then

going back to ask questions. I think that's the second thing.

And so many times when we get out of a learning mode is when

we stop asking questions. And to your point, we don't have to be

in a constant change mode, but that's real feedback. That's how

we know are we going to get to where we think we want to go, or

do we need to change our strategy? Because where we

thought we were going isn't really where our demand is, and

learning is asking questions, and continuous learning is not

teaching. Talk to me about a must win battle.

Dr Rebecca Homkes: Well, first, I'm agnostic to the language

that you pick as an organization, right? So my only

thing is whatever term you use for your top strategic

priorities. That term must have integrity, so you can't use it

for anything else. So if you're going to have five strategic

priorities, great. The word priority is now protected. It

can only refer to those five things, goals. Rocks again. You

do you right? I said not to recently at a summit, you know,

some of the President was saying, Well, you know, the CEO

doesn't like the term must win battles. Can we call them so and

so? And I said, Look, call them drafts. As long as you execute.

It's like pick one word, right? That's all I care about. So I

started using the term must win battle. I've got some colleagues

at IMD who use it as well, because we have a massive

language inside organizations. Now you go to any company from

10 employees to 100,000 they have goals, priorities, aims,

rocks, OKRs, KPIs, targets. I could keep going and going,

right? And this isn't small organizations. That happens. So

put yourself as an employee. If I've got all of these lists of

things, which in the English dictionary all translate to most

important thing, what am I working on every day? Right? And

you need something that cuts about the noise and says, No,

these are the must wins. And I love the language of must win

battle, not nice to have battle, not business as usual battle,

but these are must wins for growth. And there's really

power. The absolute clarity of this is what we must do to get

to that finish line you want, the midterm you want them

clearly focused on value creation, and you want them to

cut across the organization. A great test for Do I have the

right list of must win battles is that I just rename my

departments. By that, I mean if you have a marketing one, a

sales one, a product one, and a people one, you don't have a

strategy. You've just renamed your departments, right? A great

must win battle cuts across the organization, because that's how

we truly create value. We pull from the best and do this

integrated approach to what it takes to drive growth. And

that's what you're looking for in a must win again midterm, two

to three years, focus on value creation, market oriented cuts

across the organization to bring out the best of what you have.

Give me, if you can, don't you to violate any

confidences. But can you help us point to a real life example of

a company, an organization that you've seen go through this loop

successfully, just so we get a real life idea of what it looks

like?

Dr Rebecca Homkes: Yeah, you know, you know, I've named, you

know, luckily, I've got wonderful companies that I work

with, so almost all of them were willing to be named in the book.

So, you know, Deputy 40 company has gone through this cycle a

couple of times now. And I love that example, because they're

one of the, also the very few companies I work with where

their culture is actually part of their right to win and their

must win battles are focused on where growth is coming from,

right, not necessarily where growth has been. So great

example there Gorilla Glue company, another company based

in the US, but of course, growing globally very quickly.

They're on their second cycle of muslin battles. So successful,

we had to reset a year early right from the original plan,

because they're going to that next stage of growth. And the

company I just mentioned, they're smaller than in Primex,

based in Latvia and Riga, Latvia one of my favorite places to

visit, by the way, and they're on their third cycle, and

they've doubled every three years since I started this

approach. And they're in concrete and construction, and

that's about as much as we want them to double. You know, when I

work with FinTech companies, you know, I just wrapped up one with

one this morning, based here in Europe. You know, we want you

doubling every year in the scale up phase. But if you're doing

anything hard, like construction, concrete

manufacturing, I only actually want you doubling every three

years. And so I've got lots of them who are having that kind of

success. But this takes discipline. And what I've really

realized when I look at companies who do this well and

others who go through the process. And don't is, growth is

a commitment. And I know you're thinking, of course, Rebecca,

eye roll, growth is a commitment, but here's what I

mean, you can't just commit to the strategy. You've got to

commit to building the capability to execute the

strategy. Now, I don't care how smart people are in your

organization, throwing a new growth strategy isn't going to

get it done. Are you as a leadership team saying, Not only

am I committed to this growth strategy, I'm committed to

growth, which means I'm going to slow down, to speed up, I'm

going to make sure I'm building the capability of my team. I'm

going to be prepared to change things as the situation changes.

I'm going to make some tough decisions on people or markets

or products, because that's not where growth is coming from.

Growth is an absolute commitment, and a lot of

organizations aren't prepared to make that commitment. Frankly,

it's hard, right? And I'll share something with you. Stephanie,

when I wrote the book, one of the first big feedbacks I got

from one of the editors was Rebecca, you say stuff is hard,

too much. No one likes hard stuff, and they wanted me to

rephrase all of that language to make it feel more approachable.

And I started to do that, and then I pushed back, and I said,

I can't do that, because this stuff is really hard. But you

know what? That's cool. Why? Because when you do the hard

stuff, well, that's differentiation, and that's what

we're trying to do with growth strategies.

Most people, when they hear commitment or

discipline, I think the loop in the brain is going to the

strategic plan and being committed to the check and the

must dos. But what I just heard you say, correct me, if I'm

wrong, is the commitment is to the growth. Yes, that might mean

altering or changing, but it sounds like it's a it's a verb.

Dr Rebecca Homkes: Growth is a verb and a noun, right? Is it is

constantly changing and moving. Go back to our strategy

hypothesis. Now, people here that are thinking, No, Rebecca,

we're too big. We have shareholders, we have boards. We

need to stick to the plan. Plans are hypothesis, right? This is

not advocating for chaos. You're having the strategy in place at

all times, but you have the humility to acknowledge that we

didn't get everything right the first time, and our situation is

going to change. We're going to constantly be bringing that

change in, and that means you've got to build this capability for

an organization that can handle and adapt to this change. Now

people try to do this, and they do this by cheating. What do I

mean by that? Instead of five growth priorities, they have 10,

or they have 15, or they have five, but each of the five have

five sub bolts, each of which have 15 under it, they're trying

to caveat for every single iteration the market will give

them right? Which means you're actually starving any of those

growth priorities of the time, treasure or talent they need to

succeed. This is why it's hard to be a high growth company.

You've got to be ruthlessly prioritized on those few areas

of growth, but build the capability of an organization

that can adapt and change as the situation around you changes.

Okay, there are so many additional strings I

could pull on here to lean in on your expertise, I mean, but in

the spirit of time, is there anything else you want to make

sure that we address here today together?

Dr Rebecca Homkes: I think we'll just repeat hard is great,

right? So just because we've said a couple times things are

hard or difficult or only a few people do it, if you've got any

sort of entrepreneurial spirit that should light something in

there and say, Hold on, like, Tell me more, right? Things that

are hard are great, because when you do hard things, well, that

is differentiation. Everything in survivors that thrive is

doable. I've seen companies of employees from 10 to several

100,000 you know, from 10 million revenue or even smaller

to, you know, over 30, 40 billion are working on, survive,

reset, thrive, you've just got to make the commitment. And I

think have an honest conversation with yourself and

your team. You know, do we want to commit to growth? And not

everybody does. That's also Okay, right? But then, you know,

I'm going to annoy you, Brittany, you have a

conversation with me, because I am absolutely passionate. Wake

up every single day on what we can do to do this lead high

growth journeys.

Incredible, incredible. Thank you so much

for sharing such meaty content. Very energizing to hear you

talk. Thank you.

Dr Rebecca Homkes: It was absolutely my pleasure to be

here. Thanks so much for having me. Thank you so much for the

great questions.