Five Strategic Tips for a Profitable Future

Future Profit

A recently published book, Understanding Michael Porter: The Essential guide to competition and strategy (Magretta, 2012), compiles and applies the work of management guru, Michael Porter.   Full of useful insights, here are five pearls of wisdom that can if applied, create a more robust, more profitable and sustainable business.

Tip 1: “Strategy explains how an organization, faced with competition, will achieve superior performance. The definition is deceptively simple”

Performance is not about your competition, it is about achieving superior performance, every day, regardless of what is happening with your competitors or markets.

Tip 2: “Competitive advantage is not about beating rivals; it’s about creating unique value for customers. If you have a competitive advantage, it will show up on your P & L”

To create unique value is not about you beating your competitors, it is about you delivering (through superior performance) the unique value by focusing on your customers’ needs.

Tip 3: “Strategic competition means choosing a path different from that of others”

If you accept that the competitive goal is superior performance, then it makes sense to achieve that performance using methods different to the competitors. You have to be able to differentiate yourself not only in the customer’s eyes but in how you achieve that differentiation – in how you deliver value to the customer.

Tip 4: “The value proposition is the element of strategy that looks outward at customers, at the demand side of the business. The value chain focuses internally on operations. Strategy is fundamentally integrative, bringing the demand and supply sides together”

A strategy is about achieving a position.  Here it is to achieve superior performance whilst delivering superior value to the customer.  You need to be able to focus on how you will drive that superior performance, and what this means in terms of superior customer value.  In this, you need to continuously improve the efficiency of your internal operations.

Tip 5: “There is no honor in size or growth if those are profitless. Competition is about profit, not market share”

This tip serves as a reminder that we need to be the most profitable, not the biggest in top-line revenue or headcount.

Consider these five tips in a context of your own organization. What should you do to meet the requirements of all five? Is your current strategy going to work for you in the coming next few years?

What has worked or not worked for you? Share your knowledge, share the wealth!

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Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

Five Strategies for Growing Successfully

Not all growth is good growth, five tips to help you ensure that growth is good

Do you want to grow your business?  If so, do you know how you are going to grow the business?  And are you aware of the difference between good growth and bad growth?

People often want to grow for growth’s own sake.  This is more about taking on risk than taking on growth.

Strategy 1: Control Your Growth

You need to manage growth, not have it manage you.  I suspect more companies have failed through poorly managed and unplanned growth than any other reason.  At times you will also want to slow growth to allow you to “catch up” with yourself.  Fast and successful growth is rare.  You need to be able to absorb the lessons you learn as you grow and incorporate them into your next steps.  In doing this you also need to consider some of the risks that are associated with poorly controlled growth, these include:

  • Cash flow risks – growth consumes cash, and rapid growth consumes cash rapidly. If you are not careful you can find yourself with insufficient cash to cover your operating costs; you also run the risk of trading whilst insolvent.  It only requires one unexpected cost or one delayed customer payment to push you over the edge.
  • Operational crunch – to produce the volume required to support your growth can be difficult.  Equipment and/or people have to operate beyond what is practical, and things start to come apart at the seams with increasing inefficiencies and attendant risks.
  • Poor customer service – you have more customers to look after and not always the available people or resources to do so.
  • Rapid expenditure – with more orders coming in you may be tempted to spend more on people, infrastructure, and resources.  You want to invest, but not over-invest or leave yourself exposed.
  • People risks – existing people will be worried about the rapid changes, stressed by an increasing workload, exhausted by an expanded role for which they may not be suitable or experienced, and worried if you will be able to pay them each month.  St the time you need them most you may find your best people, who are the most marketable, may leave.
  • Decision-making changeswith rapid growth people need to step back from an operational focus to a leadership role.  There is a risk that leaders can become disconnected from what is happening at the front-line and make decisions based on the incomplete or inaccurate information.
  • Leadership shortfalls – people who may be operationally adept may lack the necessary leadership skills, business acumen or interpersonal skills to lead effectively.  This can cause problems and compound existing risks.

Strategy 2: Go for Good Growth, Avoid Bad Growth

Good growth is aligned with your purpose and what you are trying to achieve.  Bad growth is not aligned.  Often the problem of bad growth is that you are prepared to take a short-term gain but sacrifice the long-term future.  For example, taking on a big client who has a poor reputation for paying on time leads to serious cash flow issues later and takes a disproportionate amount of your precious time in managing the relationship and fire-fighting. This can also impact your team, lower morale and create stress and pressure.

Make sure that what you do, who you partner with, and who you sell to are aligned.  Good growth is about servicing the need of selected and targeted clients – not any client with a checkbook.  For good growth, you need to say no to opportunities to keep focused and aligned.

Strategy 3: Growth Means Letting Go

If you want to grow you need to prune back.  As the demands and needs of your business change so I remember, as a child, playing on the monkey bars.  The only way you can forward on the monkey bars is to let go with one hand, swing forward, and grasp the next rung. So you need to repeat it to get to the other end. Business is just the same. Let go to grow.

Strategy 4: Lead Your Growth

Growth is about change, and change is about leadership, not management. You need to lead your people and share with them the answers to three questions:

  • What are we changing from and why?
  • What are we changing to and why?
  • How are we going to do this?

Doing this remove any vagueness or information vacuums which can cause stress and rumors and stories (often inaccurate) in an attempt to fill the gap.

Strategy 5: Go Slowly

Business is not a sprint, it is a marathon. Paradoxically, by going slower you will get there faster – and with your risks better managed, and you be better prepared for them.

To grow, and to grow profitably, control your growth, go for good growth, let go to move forward, lead your people to growth and to grow well grow slow.

Please feel free to re-tweet, re-blog, email and share this article with others who may find it of use or interest.

To view or download a PDF version of this blog click here.

Share your thoughts and ideas here, or email me at andrew.cooke@business-gps.com.au

If you found this article of use or interest please don’t hesitate to share it with others.

Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

The Four Components of Human Performance

The Four Components of Human Performance

There are four key components that need to be in place for people to perform, and for organizations to prosper.  What are they and what can we do to ensure they are in place? 

by Andrew Cooke, Growth & Profit Solutions Human Performance

Performance is about people, and people can be fickle.  Organizations are under pressure to do more with less; organizations are becoming flattered which, in turn, is extending the scope and responsibility of managers and leaders, increasing the number of reports and reducing the time that manager and leaders can spend with them.

So what do we need to do to ensure that we have the right building blocks in place so that people can perform effectively and efficiently?

Andrew’s Four Building Blocks

There are four building blocks which form the foundation for performance.

4 Components of Human Performance

1.  The desire to Work – people need to want to work.  It is not about just satisfying their monetary or security needs.  People want the opportunity to apply their skills and talents, to gain gratification from doing so, and to receive recognition for doing so.

2. Adequate Skills– if people have the desire but lack the necessary skills they will be unable to perform, they will be frustrated, and the organization will be negatively impacted.  Certain skills are essential for success.  Employees may already have these skills; they may need to be trained in them or to develop these skills experientially on the job.  At the same time, especially with “knowledge workers”, the necessary skills and expertise may erode or even become obsolete (how many rotary telephone repair people do you know?  Or typewriter repair experts?)

3. Right Attitude – if you hire nothing else, hire enthusiasm.  Hire energy, hire excitement, and hire passion.  These are not teachable.  You can teach people your content and the skills required. The adage, “Hire for attitude, train for aptitude”, has never been truer.

4.  Right Behaviours– if people lack the right behaviours, even though they have the desire to work and the necessary skills, you will find poor performance. How many times have you gone out for a meal, which was excellent, but marred by slovenly, slow or disinterested service?  How are you clients experiencing your people? Behaviours have to match the job results expected.

Look at your organization and ask yourself how are you doing in each of these areas?  Are you recruiting people with these four components from which you can build a foundation from which to build high-performance? Are there are weaknesses or gaps in your business, divisions or departments? Are these gaps areas which you can influence or are they areas which are in the domain of the employee?

All four components are required for human performance and measurement, but only some of them can be built by the employer, although all of them can be nurtured by the employer.

Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

Physics & Productivity

How to use Newton’s three laws of motion to become more productive

In our physic classes as children, we all learned Sir Isaac Newton’s Three Laws of Motion. Universal in their application they can also be used as an interesting analogy for increasing your productivity, simplifying your work, and improving your life.

Newton’s First Law of Productivity

First Law of Motion: An object either remains at rest or continues to move at a constant velocity unless acted upon by an external force. (i.e. Objects in motion tend to stay in motion. Objects at rest tend to stay at rest.)

Underpinning this is the basic fact that if you want to be productive you need to take action; you never achieve anything by doing nothing! This law has two key aspects when it comes to getting things going or getting started”

Firstly, objects at rest tend to stay at rest.  If you do nothing, then nothing will happen.

Secondly, objects in motion tend to stay motion.  Once you get things started it is much easier to keep going.

So what are the learnings from this?

Firstly, don’t procrastinate – find a way by which to get started.  Just start it! (With apologies to Nike).  You don’t have to do much, just begin it. By beginning, you start moving, and by moving you start to gain momentum, and in gaining momentum you become more motivated, and as you become more motivated so it becomes easier to do the work and your speed picks up.

This brings us to the second law.

Newton’s Second Law of Productivity

Second Law of Motion: F=ma. The vector sum of the forces on an object is equal to the mass (m) of that object multiplied by the acceleration (a) vector of the object. (i.e. Force equals mass times acceleration.)

Let’s break down this equation, F=ma, and how it can apply to productivity.

The important thing is that F (force) is a vector that involves both magnitude (how much work you are putting in) and direction (where that work is focused). In other words, if you want to get an object accelerating in a particular direction, then the size of the force you apply and the direction of that force will both make a difference.

It’s the same process for getting things done in your life.

If you want to be productive, it’s not merely about how hard you work (magnitude); it’s also about where that work is applied (direction). This is true of big life decisions and small daily decisions.

Fig. 1 Example of How You Could Use Your Skills

For example, you could apply the same skill set in different directions and get very different results. As you can see in the example below you could use the skills, insights, and expertise you gain from completing a business degree in several different ways. You can only do so much, so make where and how you focus time, effort and attention count!

Newton’s Third Law of Productivity

Third Law of Motion: When one body exerts a force on a second body, the second body simultaneously exerts a force equal in magnitude and opposite in direction on the first body. (i.e. equal and opposite forces.)

We all work at an average speed of our life. And our average is, well, just average.  There are times when your levels of productivity and efficiency are at a peak, and there are times when your levels are low. When we are productive and efficient we use productive forces such as focus, positivity, and motivation.  When we are unproductive we experience unproductive forces like stress, lack of sleep or multi-tasking (trying to balance too many tasks at once).

In making progress and becoming more productive and effective there are two things we can do – we can look to double our productive forces (e.g. work harder and longer, watch a motivational video, have a cup of coffee) and/or have the unproductive forces we experience (e.g. simplify what you are doing, learn to say no or change your environment (for example, tidy up your office).

Fig. 2 How To Make Progress

If you reduce the unproductive forces in your life, your productivity will improve naturally.

Summary of Newton’s Laws of Productivity

1. Objects in motion tend to stay in motion. Don’t procrastinate, look to start on what needs to be done as possible – this will create forward momentum.

2.It’s not just about working hard, it’s also about working on the right things. You have a limited amount of energy, time and resources to bring to bear, so where you apply it matters.

3. Your productivity is a balance of opposing forces. If you want to be more productive, you can either power through the barriers or remove the opposing forces. The second option seems to be less stressful.

Finally, the power of these laws is even greater if you leverage them and use them in conjunction with each other.

To view or download a PDF version of this blog click here

Share your thoughts and ideas here, or email me at andrew.cooke@business-gps.com.au

If you found this article of use or interest please don’t hesitate to share it with others.

Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

The “X-Factor” and Business

Who are the people in your business with the “X-Factor”? How do you uncover them?

The X Factor (Australia)

For those of you living in Australia, this evening saw the launch of a new series of  ”The X-Factor”. For those of you not familiar with the show it is a competition aimed at uncovering new gems of singing talent through a series of auditions, with the final winner receiving a recording contract.  I’ll be honest, this is not something I usually watch – but I did tonight, and I was glad I did!

The ”X-Factor” is that indescribable, innate quality which we cannot define, but which we know when we see it, which marks somebody as having incredible talent and potential.  In tonight’s episode there were two outstanding acts – Siane Hawke, a 14-year old student from Darwin and another student, Bella Ferraro.  What struck me about both girls was not only that they had immense talent, way beyond their years, but that they were unaware of how special they were.  Refreshingly modest they seemed genuinely surprised at the reaction they evoked from the judges and the 5000 people in the audience.  They are ordinary people in ordinary lives – but that may change for them in the near future.  It certainly won’t be the same for them after this.

My question to you is this.  Who in your business or organisation has the “X-factor”?  How will you uncover these gems and help them to recognise themselves? How do you ‘audition’ people to do this? How will you support those that you uncover so that you can build them and reach the fullness of their potential?

Happy auditioning!  You may be helping someone else live their life to the full – and that is the mark of a true leader!

Let me know how you do it. What has worked, what hasn’t, and what would you do differently next time?

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Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

3 Elements for Guiding Effective Change

Research has found that over 70% of all change initiatives fail.  In a world of accelerating change you and your organization have to adapt. As leading management guru, Professor Gary Hamel said: “Today, the most important question for any organization is this: are we changing as fast as the world around us”

The problem is that the odds are not in your favour, but here are three tips to help tip them in your favour.

  1. Establish a Greater Purpose – does everyone share a common and clear purpose which staff understand, articulate, and for which they understand how what they do contributes to it? Is there a strong story underpinning the purpose to which people are aligned with and can share with others? Stories are powerful ways by which to create memories and emotional connections and a strong story makes your purpose even more powerful.
  1. Ensure Consistent Decision-Making – you need to be able to transform your existing values into decision principles. For example, you have a core value of customer satisfaction. So, when decision-making one of the core principles that will guide your decision is “Will the decision I make increase or improve customer satisfaction?” This makes it easier for everyone to make decisions that are consistent and aligned both in terms of what you do and how you do it. Your principles are specific and enable others to make decisions for themselves rather than making decisions for others, or delegating decision to Creating consistency in your decision-making creates alignment, leverage and synergies.
  1. Build Distributed Leadership – do you have leaders (formal and informal) at all levels who are catalysts and exemplars for other people, and who stimulate the behaviours, attitudes and decisions for successful change. You cannot ‘lead change’, only ‘followers of change’ by creating an environment where others are aligned and engage with the change initiative and are personally committed to it being successful.

Do you have these three elements in place before you start any change initiative?

To view or download a PDF version of this blog  click here.

Share your thoughts and ideas here, or email me at andrew.cooke@business-gps.com.au

If you found this article of use or interest please don’t hesitate to share it with others.

Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

3 Ways to Improve How You Work

improve2

We are often so busy doing the work that we forget to take a step back and give ourselves the time to focus and re-energize ourselves.  Here are 3 tips for improving your personal effectiveness, no matter what you do.

1. Boost your personal efficiency
When looking at profit improvement potential (or waste) in a business it is often said it is easy to identify 30% of your current overheads as ‘waste’. The same can be said if you audited yourself for your levels of efficiency. 30% of what you do on a day-to-day basis is a waste. Outside the box ways to boost your efficiency are required. Some key tips are:

  • Hire a Virtual Assistant to prevent you performing tasks you don’t have to
  • Stop doing many of the things that are not in the 20% of things you do which create 80% of the benefit
  • Build processes and document all aspects of your business you currently do ‘naturally’ so you can delegate more of what you do
  • Use the latest technology platforms such as Ipads, Livescribe pens, and various apps to better collect your notes, ideas, strategies and increase your speed in finding them at a later date

2. Protect your energy levels
Think of the networks of people in business and personally you associate with on a regular basis.  Are these people providing you a boost in your energy levels when you connect with them or are they taking away your valuable energy levels (acting as what we call ‘Energy Vampires’)?  If you have the balance wrong and have a large portion acting as ‘Energy Vampires’ it can have a detrimental effect on your ability to implement change and deliver the outcomes you are seeking.  Perform a quick audit on your circle of business and personal contacts; what do you have to change?

3. What is your ‘theme’ for the next 12 months?
Having a theme for your plans for the next 12 months can help focus more acutely your team, customers and importantly yourself on what’s important when driving strategies/actions. Themes could include: “Innovation”, “Growth”, “Efficiency”, “Profit”, “Downsize”, “Consolidate” or “Improve Life Balance”.

What has worked or not worked for you? Share your knowledge, share the wealth!

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Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

Assessing Future Leaders – the Performance vs. Potential Matrix

How to determine and assess future leaders, and where and how to focus your efforts in their development.

by Andrew Cooke, Growth & Profit Solutions

You are looking to develop future leaders for your business.  How can you do this so that you can consistently evaluate them across the board?  What is more important when you evaluate them – their past performance or their future potential?  It isn’t an either/or question.  You need to understand both their past performance, and to identify their future potential.  This is where the Performance/Potential Matrix comes to hand.

Performance/Potential Matrix Overview

This consists of a 3×3 matrix contrasting the two elements:

  • Performance – this is the extent to which the person achieved their objectives (“the What”) and the extent to which they demonstrated the appropriate leadership behaviors. (“the How”).
  • Potential – this is a person’s capacity to be a top performer in a more senior role.

By assessing where an individual sits on each of these two axes you are able to determine two factors:

  • Where they currently sit as you and/or others perceive each individual;
  • With whom to focus your efforts and where (performance and/or potential)

An example of how each of the 9 grids can be labelled is shown below.  In doing this the matrix provides a simple and effective tool by which to calibrate criteria and expectations, and acts as a diagnostic tool for development.  As such its real value is in being a catalyst for robust dialogue and it facilitates shared ownership rather than one person’s opinion

 

Headings

  • Red Headings – people in these grids are likely not to be retained
  • Grey Headings – these people are unlikely to progress further, but given their level of performance may be best suited in developing further in their existing field
  • Yellow Headings –  these people may develop further, but need attention and resources to help them develop.  If they do not develop further, or sufficiently, they may slip into a  red or grey box.
  • Green Headings – people with real potential who should be in the first tier for leadership development.

Common Pitfalls to Using the Performance-Potential Matrix

  • Misunderstanding high-potentials – there are misconceptions about the term “high-potential.” People use the term to talk about all top talent, as opposed to talent with the potential to become leaders. It can be difficult for managers to assess “promotability”.  Often most managers are subconsciously thinking, ‘Do they remind me of me?’ “
  • Using the tool for individual assessment. – the matrix is  not designed for individual assessment, you need to be able to compare different people.  Without comparison, it enables neither valid assessment nor career decisions about an individual.
  • Expecting too much. – the matrix is only one tool.  You need to ensure that you use other mechanism with more data e.g. 360-degree reviews.
  • Using quotas for each box don’t try to allocate people by quote, you need to reach a common understanding and agreement where each person should be realistically placed.
  • Failing to include change management – when using it you need to engage people so they understand it and buy-in to the approach and understand what the benefits are for employees and the organization.
  • Over-complicating the process  – don’t try to make the matrix more complex, the effort will usually not add significant insight or value.

         Failing to differentiate between employees – once you have identified the stars and top performers, you need to  direct resources towards developing  them—higher salaries, plum work assignments, mentorships with executives, exceptional training opportunities and coveted job rotations—to retain them and develop their talent.

 

Benefits of the Performance-Potential Matrix

  • It allows managers to use the matrix to assess their people and calibrate them between the leaders.
  • Assists in the creation of meaningful, accountable development plans.
  • Allows you to aggregate relative comparisons between talent.
  • Stimulates discussion and constructive debate, and creating a shared and common understanding.
  • The accuracy of assessing performance and potential improves with multiple perspectives. Managers often have blind spots with their own employees, and are unaware of how they are perceived by others. These discussions can help shine a light on superstars and poor performers.
  • Creates collective responsibility for the team in  building a stronger organization. It encourages everyone to be candid, to listen to each other, and to develop each other’s employees.
  • It uncovers both individual and organizational strengths and weaknesses.  As such the matrix serves as a needs assessment for development actions that need to be taken
  • Helps managers and leaders to assess potential which they normally struggle to do.

Next Steps

Work with your peers and use this tool to review your employees to identify your prospective leaders.  Try looking at the people by yourself, then share your ideas, insights and reasonings with your peers to create insights, ideas and a common perspective.  Use this to stimulate debate, and look to use other tools and means by which to identify the prospective leaders.

Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

Empowering Your Employees to Empower Themselves

How to create an environment that empowers people.

As a manager or leader, do you let your people assume more responsibility when they are able? Do you know when that is, or do you keep telling yourself that they aren’t ready yet?In my travels from organization to organization, I talk with thousands of people every year who want to be treated as “partners” rather than as employees. They want information to flow up as well as down. But, oftentimes, leaders do not want to give up control.

Marshall Goldsmith, the world’s leading CEO, tells a story of a CEO he knew who was the leader of one of the world’s largest global organizations. This CEO received feedback that he was too stubborn and opinionated. He learned that he needed to do a better job of letting others to make decisions and to focus less on being right himself. He practiced this simple technique for one year: before speaking, he would take a breath and ask himself, “Is it worth it?” He learned that 50% of the time his comments may have been right on, but they weren’t worth it. He quickly began focusing more on empowering others and letting them take ownership and commitment for decisions, and less on his own need to add value.

Your employees understand their jobs. They know their tasks, roles, and functions within the organization, and it’s time for you to let them do what they need to do to get the job done. But there is a critical point that is often missed: It isn’t possible for a leader to “empower” someone to be accountable and make good decisions. People have to empower themselves. Your role is to encourage and support the decision-making environment and to give employees the tools and knowledge they need to make and act upon their own decisions. By doing this, you help your employees reach an empowered state.

The process does take longer — employees will only believe they are empowered when they are left alone to accomplish results over a period of time — but it’s effective and worth the time. If a company has a history of shutting down or letting go of initiators, for instance, the leader can’t just tell employees, “You are empowered to make decisions.”

Part of building an empowering environment is dependent on the leader’s ability to run interference on behalf of the team. The leader needs to make sure people are safe doing their jobs. To make sure this happens, an ongoing discussion of the needs, opportunities, tasks, obstacles, projects, what is working and what is not working is absolutely critical to the development and maintenance of a “safe” working environment. You are likely to spend a lot of time in dialogue with other leaders, employees, team members, and peers.

Following are a few things leaders can do to build an environment that empowers people.

1. Give power to those who have demonstrated the capacity to handle the responsibility.

2. Create a favorable environment in which people are encouraged to grow their skills.

3. Don’t second-guess others’ decisions and ideas unless it’s absolutely necessary. This only undermines their confidence and keeps them from sharing future ideas with you.

4. Give people discretion and autonomy over their tasks and resources.

Successful leaders and managers today are willing to exercise their leadership in such a way that their people are empowered to make decisions, share information, and try new things. Most employees (future leaders) see the value in finding empowerment and are willing to take on the responsibilities that come with it. If future leaders have the wisdom to learn from the experience of present leaders, and if present leaders have the wisdom to build an environment that empowers people, both will share in the benefits.

There are much more things that leaders can do to build and environment that empowers people. Please send any ideas you have. I would love to hear them!

To view or download a PDF version of this blog click here

Share your thoughts and ideas here, or email me at andrew.cooke@business-gps.com.au

If you found this article of use or interest please don’t hesitate to share it with others.

Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

Five Strategies for Growing Successfully

Not all growth is good growth, five tips to help you ensure that growth is good

Do you want to grow your business?  If so, do you know how you are going to grow the business?  And are you aware of the difference between good growth and bad growth?

People often want to grow for growth’s own sake.  This is more about taking on risk than taking on growth.

Strategy 1: Control Your Growth

You need to manage growth, not have it manage you.  I suspect more companies have failed through poorly managed and unplanned growth than any other reason.  At times you will also want to slow growth to allow you to “catch up” with yourself.  Fast and successful growth is rare.  You need to be able to absorb the lessons you learn as you grow and incorporate them into your next steps.  In doing this you also need to consider some of the risks that are associated with poorly controlled growth, these include:

  • Cash flow risks – growth consumes cash, and rapid growth consumes cash rapidly. If you are not careful you can find yourself with insufficient cash to cover your operating costs; you also run the risk of trading whilst insolvent.  It only requires one unexpected cost or one delayed customer payment to push you over the edge.
  • Operational crunch – to produce the volume required to support your growth can be difficult.  Equipment and/or people have to operate beyond what is practical, and things start to come apart at the seams with increasing inefficiencies and attendant risks.
  • Poor customer service – you have more customers to look after and not always the available people or resources to do so.
  • Rapid expenditure – with more orders coming in you may be tempted to spend more on people, infrastructure, and resources.  You want to invest, but not over-invest or leave yourself exposed.
  • People risks – existing people will be worried about the rapid changes, stressed by an increasing workload, exhausted by an expanded role for which they may not be suitable or experienced, and worried if you will be able to pay them each month.  St the time you need them most you may find your best people, who are the most marketable, may leave.
  • Decision-making changeswith rapid growth people need to step back from an operational focus to a leadership role.  There is a risk that leaders can become disconnected from what is happening at the front-line and make decisions based on the incomplete or inaccurate information.
  • Leadership shortfalls – people who may be operationally adept may lack the necessary leadership skills, business acumen or interpersonal skills to lead effectively.  This can cause problems and compound existing risks.

Strategy 2: Go for Good Growth, Avoid Bad Growth

Good growth is aligned with your purpose and what you are trying to achieve.  Bad growth is not aligned.  Often the problem of bad growth is that you are prepared to take a short-term gain but sacrifice the long-term future.  For example, taking on a big client who has a poor reputation for paying on time leads to serious cash flow issues later and takes a disproportionate amount of your precious time in managing the relationship and fire-fighting. This can also impact your team, lower morale and create stress and pressure.

Make sure that what you do, who you partner with, and who you sell to are aligned.  Good growth is about servicing the need of selected and targeted clients – not any client with a checkbook.  For good growth, you need to say no to opportunities to keep focused and aligned.

Strategy 3: Growth Means Letting Go

If you want to grow you need to prune back.  As the demands and needs of your business change so I remember, as a child, playing on the monkey bars.  The only way you can forward on the monkey bars is to let go with one hand, swing forward, and grasp the next rung. So you need to repeat it to get to the other end. Business is just the same. Let go to grow.

Strategy 4: Lead Your Growth

Growth is about change, and change is about leadership, not management. You need to lead your people and share with them the answers to three questions:

  • What are we changing from and why?
  • What are we changing to and why?
  • How are we going to do this?

Doing this remove any vagueness or information vacuums which can cause stress and rumors and stories (often inaccurate) in an attempt to fill the gap.

Strategy 5: Go Slowly

Business is not a sprint, it is a marathon. Paradoxically, by going slower you will get there faster – and with your risks better managed, and you be better prepared for them.

To grow, and to grow profitably, control your growth, go for good growth, let go to move forward, lead your people to growth and to grow well grow slow.

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