How do You Grow and Expand Your Business in Times of Feast or Famine?
4 May 2010 Michelle Faustin
While growth is a priority for business, many companies will undergo a difficult economic period. Michelle Faustin explains how, by sticking to basic fundamentals, an organisation can turn itself around and put itself back on the road to growth.
In today's economic times, businesses find themselves in two main precarious positions. The ones that are fundamentally strong will survive and thrive, while the ones not strong on strategy or execution will have to make a choice: remove the dross, throw unnecessary cargo overboard, and get the sound strategy and removal of roadblocks to execution needed to grow again or wither away and fail.
We know that failure is not an option. You are a leader who knows that with crisis comes opportunity, but are you fundamentally strong?
John Wooden was the coach of the UCLA basketball team from 1948 to 1975. During that time, he created and used a model that was fundamental to the team's success (this is now the famous John Wooden model). Year after year, regardless of who was on the team, who they were competing against or what adverse conditions came their way, they stuck to the fundamentals. The result: Wooden is the "winningest" coach of all time – not just in basketball, but all sports.
During his tenure, Wooden's teams had a record of 620 wins and only 147 losses (an unequalled winning percentage of 81%), they won an unprecedented ten NCAA championships in 12 years including seven consecutively (1966-73) and 38 straight NCAA tournament victories. Wooden achieved the all-time NCAA consecutive winning-streak record of 88 games, won 149 of 151 games in Pauley Pavilion during his Bruin tenure, is the only coach to compile four undefeated seasons of 30-0, and his Bruin teams captured 19 conference championships (the record of which Wooden is most proud).
So, how does that translate into business? As stated above, the way to achieve and sustain top and bottom-line growth is to stick to the fundamentals.
The three main fundamentals needed to have the right foundation for success include:
- a sound strategy (fully defined and developed growth strategy)
- comprehensive plans
- consistent execution.
These must all be in order and inextricably linked to be successful.
Seems simple enough, but many companies are operating today without a clearly defined or focused growth strategy in place. Without it, an organisation is "all over the place" with activities and projects that do not focus on growth.
How do you know whether or not you have a growth strategy? Very simple. If someone asks you what your growth strategy is, and you / anyone of your team cannot clearly answer the question, it is likely you do not have one.
A growth strategy will tell you and your organisation what to do and what not to do in order to reach your growth goals. There should be a clear understanding of what these growth goals are for your company and what course (or direction) is going to be set in order to achieve them.
Many organisations have goals in mind without a clear idea of how to reach them or what is the best way for them to win in the marketplace they are trying to compete in (or if they should be competing in that market at all).
It is also important to ensure that selections are not made based on opportunity alone. How many companies do you know that salivate at market potential without keeping profitability and capability in mind?
We all know of those that jumped too quickly or expanded too fast, only to end up losing money and having to sell, downsize or high-tail it out of the market as a result. Make sure these questions are asked and answered during the growth strategy development phase.
Creating plans that flow directly from the growth strategy is key, otherwise, planning becomes nothing more than a budget exercise often based on historical data and low balling (let's face it, most strategic plans are not strategic). The plan should be specific, have detailed strategic growth initiatives that clearly outline what needs to be done, focused on, and executed in order to reach the goals outlined in the strategy.
However, make sure your plan does not have too many initiatives in place. Focus on a few core prioritised growth initiatives that your organisation will be designed around in order to make your growth strategy a reality. Some of the most successful companies are those that focus on a few things and then work to get it done.
Execution of the strategy
Execution should be the outflow of a sound strategy and plan. This third link is the most important as the best strategy and all the planning in the world will not mean anything if it is not properly and consistently executed. However, it is important that execution is focused and linked to the overall growth strategy and plan. Otherwise, you will have execution that does not provide any benefit and does not bear fruit. It will then become easy for you and/or your team to get distracted and completely off course (a roadblock that has been detrimental to countless organisations).
One of the ways to promote a focus on execution is to have a "get it done" mentality. An execution mindset first needs to start from the top and then flow through the entire organisation. Next, communication of your growth strategy and plan has to be provided to all levels throughout your company.
By knowing their part of the big picture and how what they do contributes to the tangible success of the company, you can minimise confusion as well as increase the level of pride and satisfaction from productive employees who have an execution mindset that will help you achieve and sustain success going forward.
Finally, systems need to be created to ensure that execution flowing directly from the strategy and plan are in place, monitored and enforced. Systems that address: who is responsible, who checks to make sure what is being done is linked to your growth strategy and plan, whether or not each person in the organisation knows their purpose and how it relates to the overall strategy, and if rewards and compensation are tied. If there are issues identified, are they dealt with and course corrections made if need be? These should be implemented throughout to minimise distractions and improve focus.
Sticking to growth fundamentals
The reason why companies fail or postpone success is that they stray from the fundamentals and begin to start practicing in areas that are contrary to growth. These include ignoring the three main fundamentals (sound strategy, comprehensive plan and consistent execution focused and directly linked to growth strategy and plan), and instead allowing themselves to get distracted putting out fires, engaging in confusion and a lack of communication.
It is not easy. Wooden was, however, able to stick to the fundamentals and so can you. The good news is that once these practices are put back into place, the organisation can turn around and put itself back on the road to growth – both top and bottom line.