The Most Important IQ?

Amar Pandit , CFA , CFP

Amar Pandit

A respected entrepreneur with 25+ years of Experience, Amar Pandit is the Founder of several companies that are making a Happy difference in the lives of people. He is currently the Founder of Happyness Factory, a world-class online investment & goal-based financial planning platform through which he aims to help every Indian family save and invest wisely. He is very passionate about spreading financial literacy and is the author of 4 bestselling books (+ 2 more to release in 2020), 8 Sketch Books, Board Game and 700 + columns.

The Answer is Growth…

Instead of waiting for the post to progress, I gave away the answer at the beginning of the post. Because right after this post, I also need to write an interesting take on Silicon Valley Bank and its implosion on After all, this is yet another black swan event as some people are calling it. By the way doesn’t it seem that we are in the season of black swans (too many happening over the last few years)? Feel free to share this one with your prospects and clients.

I know I have digressed a lot (Thank You Black Swans), so back to the original post.

Growth IQ is the most important IQ in our business as well as life. Let me share a secret about this IQ. To ace this IQ, the one thing to understand about growth is that it’s never just one thing. Now that you know this, let’s dive into some basics.

Why is this such an important topic for us?

Because in our industry, the future growth rates of our firms drive the values of our firms. And if you recollect from my previous post, for every 1% increase in your organic growth rate, the value of your firm increases more than 7%.

Isn’t this powerful? But it’s not simply the value of your firm.

Growth = Better Clients and Better Service (including Additional Services)

Growth = Better Team Members…Ability to attract talent…Better and more career paths for team members…Faster Team Growth and a firm that outlives you…

Growth = Overall Good Business Sense

Now that we have got the “Why do we need to grow” question out of the way, let’s look at some other critical questions.

• What is your current growth rate with and more importantly without market appreciation?       Have you actually calculated this?

• Why are you currently growing or not growing?

• What are you doing right and what are you not doing or not doing well?

• What is the best way for you to grow?

• How fast will you grow?

• How fast can you grow?

• What is the predictability of this growth?

• What are the risks to your growth?

Despite the well-established importance of growth, many of us are clueless about their real rate of growth. More importantly, the reality is that growth rates at most firms are fairly low (in the lower single digits to even negative). Many are simply growing thanks to market appreciation and some client referrals.

Tiffani Bova in her book “Growth IQ” wrote, “Over the thousands of interactions I have had with some of the world’s biggest companies, I have found that one of the most persistent and vexing challenges faced by executives is determining how best to grow their business.”

Isn’t this true for us too?

She further wrote, “Every company faces the same pressures- to keep the lights on, pay its people, get products out the door, and support its customers even when experiencing a low sales period. There is no way to keep the business going without top-line growth and bottom- line profitability. Finding ways to grow the business, the top line, can become all consuming, especially for small businesses, startups or even a new division of a Fortune 500 company.

Every business has room for improvement, but not every business leader knows where to look for that improvement or how to course correct and rally the company to change when times are tough.”

Repeatable and reliable growth (the most important determinant of your firm’s value) for established companies and new ventures alike is hard and seems to be getting harder. That’s true even for the one of the largest and most celebrated brands in the world. In its third quarter in 2017, IBM found itself with twenty-two straight quarters of declining revenue. Ginni Rometty, Chairman and CEO of IBM, noted: “Be prepared to spot growth opportunities when they present themselves- because they are the key learning opportunities. You will know because they will make you uncomfortable, and your initial impulse may be that you are not ready. But remember, Growth and Comfort never co-exist.

Despite this, most companies and executives are looking for the one new product, new market, or sales and marketing tactic to fix their problems.

In our industry too, many think our growth problem will be solved by selling the hot new product (aka PMS, AIF), or by offering multiple products to deepen our wallet share or by increasing our marketing activity (YouTube Videos or Insta Reels and so on). These are classic mistakes that far too many founders and executives commit. They seek that one right move in order to improve their performance, respond to a competitive threat or recover from a growth barrier.

Why do they rely on this one right move?

Tiffany added, “Maybe because they do what seems doable: look for the one problem area to fix, the one big initiative they can take to boost numbers quickly or even repeat the one growth strategy that has worked in the past. The last one is particularly dangerous. Companies often rely on strategies that worked for them once but may have outlived their purpose and no longer served the desired impact in current market conditions and context.

Companies that reach into a bag of old tricks without careful consideration of the changing market dynamics risk getting trapped in a vicious downward cycle, repeating the same actions and yielding ever worse results over time.

But why do companies do this?

Because for companies that are currently growing (or as in our industry – seem to grow because of mark appreciation), and not aware of an impending growth barriers (that you will witness many times in the lifecycle of your firm), it reinforces the status quo, it rewards resistance to change, and ultimately it makes company leaders terrified to pursue a new direction for fear they will mess up a good thing that it’s got going.

What had been, in the early days, an entrepreneurial spirit that embraced new opportunities and risks often shifts to one that fends them off…especially when things start to go wrong. The fact is, almost all companies go through growth barriers at different points in time, and only a small percentage of them ever recover.

Bill Gates said “Success is a lousy teacher. It seduces smart people into thinking they can’t lose.”

Is it seducing you into this thinking too?

Part -II Coming Soon



P.S. Do you want to be in the small percentage of companies to recover from growth barriers and increase the value of your firm? To Know, Join HRAC, the Only Mastery School for Real Financial Professionals. We cover this and many other topics to help you build a world class wealth firm of the future.