Growth achievement can be a frustrating experience for companies. It is often a long game which is even more frustrating for entrepreneurs or executives with high expectations, aggressive quarterly or annual performance objectives or little patience. Growth plans are established, either formal or informal, action plans are unleashed accordingly, time has passed and results are not reflecting success. The unavoidable question is “Now what?”.
You may feel like you are travelling down gravel roads after a heavy rainstorm, you are part way to your destination but not sure if you should endeavour to turn back or keep going. Turning around in the muck has some risks and the work around route may have its own issues, but at least you know how bad the road was on the way to get here. Carrying on further may be the shortest path forward but the muddy slippery road may get worse, take you much longer or leave you completely stuck or in the ditch…or perhaps the road may get better soon. There is never a perfect solution, such as an airlift from a helicopter to a spot out of the muck…you have to make a decision either way.
Basic alternative decision paths from here for companies stuck in a muddy road to growth range from do nothing, scrap the growth plan, try harder, tweak the plan or develop a new plan. I like to include a further hybrid alternative for consideration, if a company believes from evidence and experience that it is headed generally in a good direction for growth. Recalibration or refocusing your growth plan on a narrower sweet spot might get you out of a mucky growth situation. Sometimes businesses try to take on too much at one time and perhaps lose the focus on the few very best specific growth opportunities with the biggest bang for the buck. The shotgun approach works in some situations, but not all. Narrowing your focus to the growth opportunities at the centre of the sweet spot may allow you to keep some momentum from your past efforts and find some near term wins with low hanging fruit.
How can one scope in on the sweet spot for growth? I suggest the small target lies somewhere near the heart of the answers to 5 key questions:
Which are my most profitable:
Customers?
Products?
Services?
What are my highest growth markets with scale and positive trends?
What are my most significant compelling competitive advantages?
Where are my internal capabilities and capacity the strongest or largest?
What are my manageable risks and tolerances?
If the intersection point of the answers to these key questions provides a “sweet spot” for growth for your business that is large, broad, deep, easily accessible and right in your wheelhouse….lucky you! I believe the intersection point represents an aggregation of your company’s greatest “gifts”, strengths and opportunity. There are no bad gifts, only unused gifts.
Finding answers to these or similar questions may have been the objective of the strategic or growth plan that led to where you are at now. However, planning processes can by definition be broad and optimistic. With good intentions, strategies and action plans can become volumous and lead to dilution of focus and effort on the very best growth opportunities. For example, it is not uncommon for a growth strategy to involve action plans to launch a new product (expected to be highly profitable) with a sales team yet to be hired in a new undeveloped international market for the company. Not saying that this is a bad strategy, but it may not be in the sweet spot that might build early momentum for a growth strategy. Planning processes by definition need to have balance between short and long term as well as risk.
Business and growth can be challenging…sometimes customers and markets change, competitive advantage can be fleeting, and your best people walk out the door every night. Financing considerations can change rapidly. Focusing on the sweet spot helps keep you from getting distracted by the bigger picture which can be very daunting. There is sometimes comfort in smaller spaces. Efforts in smaller focused spaces can often be more purposeful and easier to manage and measure results. To pursue the sweet spot, you first need to know what and where it is. The alternatives may not always be obvious. Finding the best alternatives often need critical analysis. Don’t be afraid to ask for help.
As a related topic, some companies get stagnated growth because they struggle to expand their sweet spot. You usually can’t just expand the sweet spot by increasing only one of the overlapping circles in the diagram above. You can’t grow effectively or sustainably by increasing/strengthening your internal capacity if there are no legitimate high growth markets to exploit. Neither can you grow effectively by improving your competitive advantage for products, services or customers which provide you low profitability. You often need to look at the overlapping circle which is most constraining to expanding your sweet spot and deal with that as a priority. You may need to improve the dynamics of multiple dimensions in order to effectively grow.
Growth tends to focus on strengths of a company. Growth strategies generally are not well invested if they simply shore up weaknesses or mitigate risks. Business Development or departments in companies responsible for growth by definition tend to focus for good reason on attacking versus defending. Companies don't generally grow by trying to be someone else but by becoming a better vision of themselves.
I have no idea if there any tangible answers for you in this dialogue. However, sometimes it is just good game tactics to evaluate your current position from different perspectives before committing to your next move…even if you are already winning the game by a good margin. And even if you are stuck or just sliding around on a mucky road, any possible move from there is a decision with impact…even if you do nothing.
A feature article by Dwayne Coben of Coben Advisory Inc. (www.coben.ca). Coben Advisory is a specialized corporate & executive advisory firm that offers services to help our clients plan, improve, grow and/or exit their businesses.
