A few weeks ago I wrote about the single biggest thing that separates companies which grow successfully from those which don’t.
That has generated a whole bunch of questions. Here are a couple of them.
What’s the definition of “successful” growth?
For the record, my definition of successful growth has changed over the last couple of years.
I used to say that a company had to produce growth rates which were consistently above the industry average, year after year. Now I define successful growth as simply producing a consistent rate of growth year after year.
What are the other things that prevent companies from growing?
I mentioned a few in the blog post. For example, insufficient funding; quality problems; having 70 – 80% of sales come from 1 or 2 customers; a presence in only one market.
I could have added others. For example, not responding to changes in the market or industry; losing sight of long-term goals by relaxing the discipline of planning; thinking that what got the business to where it is, will get it to the next level.
But, as with many problems, there is often more than one reason a company stops growing. So restarting growth requires not only identifying all of them correctly but also figuring out the sequence in which to deal with them.
For example, when sales growth slows, the first place owners tend to look is at their sales team. This happens in companies of all sizes.
The bigger a company becomes, the greater the need for it to keep generating cash. Add the finger pointing that can occur between departments (and their heads) and the more likely they are to reach for the “obvious” solution.
Even apparently sophisticated companies will look for quick solutions, neglecting to get input from their customers, suppliers or industry associations.
The result can be turnover – as experienced but “underperforming” sales reps or managers are replaced – and investments in marketing/promotional “strategies” which don’t address the fundamental problem.
A year later, when results haven’t improved, the prevailing wisdom is often that the recruiters, sales trainers and marketing consultants were all wrong. And another layer of complexity has been added to the problem, because the owner and her/his management team won’t trust any external advisors.
In the meantime, the real problem has got worse.
So, knowing the things that prevent companies from growing is one thing. Applying that knowledge to each unique situation often requires blunt talk and tough love.
And that’s sometimes the only way to get a business owner to:
- Accept that the “obvious” problem may not be the right one.
- Find the root cause(s) of the real problem and confront them, accepting that may be uncomfortable and painful in the short term.
If you enjoyed this post you’ll also enjoy 3 Times When You May Need To Change Your Strategy.
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