1. Maintain Standards and Deliver on Promises at Higher Volumes
We all know that talent will only get you so far. As the saying goes: hard work beats talent until talent works hard. But even hardworking talent has its limits. Beyond that point, the standards and promises you made to your customers simply can’t be met. This is a common barrier to growth and to truly reach your business’s potential, it needs to be moved from relying on people to relying on process.
To illustrate this point, picture the way you would make a single pie, then picture how a pie manufacturer would make a thousand pies a day. The first method is very reliant on the person, the second method is very reliant on the process. While you are probably not in the pie making business, you will still need to make significant adjustments to your systems, processes, policies, and organisational structures in order to grow your business.
One of the early warning signs that a business is outgrowing its internal capacity is increased pressure on people. The well-known ‘Peter-Principal’ states that an individual will be promoted to one position above their optimal capability. In a rapidly growing business although the effect is still the same this principal works in reverse, as the role outgrows the person. A key tip here is keep job titles modest, it makes it much easier to bring new talent into senior roles without the need to ‘demote’ loyal staff. Ideally, engage in some forward thinking and design (or redesign) your organisational structure for a larger version of the business, and then place people in the roles that they will have in the larger business.
A key tip for managing your systems and processes is to enforce the use of the current systems and processes, while at the same time regarding them as temporary. This helps to make a clear distinction between working in the business (using the systems and processes) and working on the business (changing the systems and processes). Ideally, each change is done cleanly so that the business moves from the old normal to a new normal quickly and smoothly. The best way to achieve this is to work with the Business Rhythm.
2. Changes in Business Conditions and Margins
One of the hazards of an expanding business is that it can become so focused on keeping up with the day to day that what is going on outside the business doesn’t get as much attention as it should. While the first barrier focused on overcoming internal capacity limits, to overcome this second barrier more attention needs to be given to the world outside the business.
Every business exists in an economic ecosystem. It is therefore important to properly understand the ecosystem/s that your business is part of. It is also important to monitor your ecosystem regularly, particularly for key changes of other participants within the ecosystem, such as customer preferences and behaviour, competitor positioning and offers, as well as supplier pricing and reliability. Knowing what the key inflection points and bottle necks are in your ecosystem can ensure you make the right strategic decisions. An example of this comes from the formation of the Rockefeller empire. Recognising that the main bottle neck in the oil industry was the railway tankers, Rockefeller focused on gaining control of the railways as a means of controlling the oil industry. Most of his competitors were focused internally on oil production, by the time they understood what was going on it was too late for many of them. The US government break-up of the Rockefeller empire may have reestablished competition in the industry, but not before most of original competitors had perished and he had established his company as industry leader.
Here are some key questions for you:
- Are you monitoring the outside world?
- Do your management reports include external data?
- Do you have plans to deal with potential scenarios?
- Are you monitoring what your customers want?
- Is what you are selling still what your customers want?
- Is what you are selling aligned to your strategic direction?
3. Sales and Marketing Methods that Don’t Scale
This is a very similar barrier to the first one, in that too often sales and marketing are reliant on individuals rather than systems and processes. Most of the Top Five Reasons for Poor Sales relate to processes. There is also a surprising reluctance in business to invest in sales and marketing systems. No doubt, the general resistance of the sales team to adopt systems and processes is a factor, but the lack of systems leaves businesses overly reliant on individual sales people.
From the customer perspective, Sales and Marketing is a Continuum, but internally it requires delineation and cooperation. A good tip in this area is to make a clear distinction between marketing and sales. The simplest one is that marketing is one-to-many and sales is one-to-one. Done well, marketing is much more cost effective than sales and scales much more easily. So, another important tip here is to look for opportunities to transfer responsibility and activity from the sales team to the marketing team. As a general rule with the right system in place only the top 20% of customers will need to be account managed, the rest can be marketing managed.
Conclusion
Every business can overcome these three important barriers to growth if they are able to put time in to proactively addressing them. Too often the day to day demands of a business are inadvertently prioritised over its long-term future. It is therefore essential to commit time, thought and resources to the future of your business. The first step to achieving this goal is to create a growth plan.