7 ways to keep growing as your business matures
Once your business is up and running, you are expected to grow rapidly as a sign of long-term health and competitiveness. Continuous growth thus becomes the biggest challenge many business owners meet in my consulting practice. Everyone is looking for that magic strategy that will keep them growing even during changes in the market and the company.
In fact, I have long believed that continuous growth becomes more difficult as your company grows larger and more mature, as your organization develops repeatable processes and adds overhead to reduce risk. .
I recently confirmed this perspective in a new book, squeeze, by Richard Rumelt. He focuses on how business leaders become strategists to solve the issue.
I endorse the key strategies and priorities summarized here, that Rumelt offers to address the continuing challenge of growth for all companies, regardless of their size and position today:
1. Provide exceptional value for an expanding market.
This may sound obvious, yet many companies ignore the “extraordinary” keyword or rely on an existing market that is not “expanding.” In addition, you need to focus on the unique value you bring, and maintain the gap between what customers are willing to pay.
Obviously, the features of the solution you offer have a lot to do with whether your market is expandable and the value is exceptional. Therefore, a key aspect of every strategy should be regular updates to every solution, no matter how robust it may be initially.
2. Trim your overhead and reduce the resources spent.
The activities, or the entirety of your business, may have built up over time, but are not contributing to the bottom line. Resources can be money, public disputes or the focus of management. To grow your company, get it trimmed and focus on business areas that have potential for growth.
Many consultants have compared this strategy to regularly weeding your garden. By eliminating non-contributory activities, organizations and business units in a timely manner, keep your company focused on business areas and functions that fit your strategic direction.
3. Improve response times to competitive situations.
With opportunities for growth, the first competent response often wins; Not necessarily the first mover, but the first to provide a competent response. Large complex organizations usually cannot move fast unless there is strategy, unity, and trust among the key actors. Optimize your ability to react.
Business agility can also be improved by actively pursuing new trends and technologies that will potentially attract competitors and customers. Don’t wait for a development crisis to kickstart your efforts. Smart companies always have some “experiments” in the process.
4. Use Acquisition to Supplement Biological Growth.
Look for economies of scale, complementary skills and technologies, or access to a broad and strong market. This strategy should not replace organic development efforts, but rather accelerate them. Smart companies use acquisitions to drive momentum and accelerate revenue growth.
When considering a merger or acquisition, you should not overlook the human factors of post-acquisition integration, such as tensions among existing employees, IT incompatibilities and employee turnover. In many cases, the return is not worth the cost.
5. Avoid overpaying by buying non-public companies.
Public companies usually only come in at a premium over price, or even at a premium to a bidding war, big brand names, or overconfidence. Do your homework privately to assess realistic value, intellectual property, and build relationships. Avoid stock deals, and pay cash.
6. Plant seedlings outside the core for safe growth.
These need to be developed and protected by your core management process, which is usually hampered by power games and conflicts of interest. Successful companies often maintain six or eight seedlings, and always highlight learning rather than punish failures.
7. Don’t use accounting tricks for bogus extensions.
Financial assets can be bought and sold quickly to generate profits that look like growth, but you will only make a fool of yourself in the long run. Spend your IQ on being transparent to constituents, simplifying your core processes, better understanding your competitors, and responding quickly to market changes.
Finally, remember that your growth strategy can never be static – it needs to evolve and adapt as the market and competitors change. Your challenge is to build a team and an organization that works close to your customers and the market, and is nimble enough to adapt to the competition and change as the environment requires.
Only then the business can survive and flourish for a long time.
The post 7 ways to keep growing as your business matures appeared first on Inc.
