Is your business fit for growth or scale ?

Whatever the stage in the companies lifecycle and whatever the size of the organisation, business owners and management teams will be considering at some point the need to develop a growth strategy.

This is usually top line number driven and focused upon increasing sales side activities, growth means more sales... right? From experience, a disproportionate amount of this activity time will probably be spent upon activities around current customers and the doubling down on an organisations current portfolio offering essentially doing more of the same with the same, potentially an inefficient investment in time and resources and also potentially a risk to the business.

Prior to any major planned growth initiative, its worth stepping back briefly from the day to day operation of the business, taking a holistic view of the organisation and asking a few questions:

1.       What growth will I get from the planned increased activity – how will this translate to increasing profit contribution, if additional investment is required?

a.       A simple workshop based upon forecasting a range of potential sales development outcomes with cost implications (if any) can provide an idea of associated profit impacts. Scenario planning could be used in this process to develop the spread of outcomes and their implication on both financial and organizational planning.

2.       Could we get a better return on investment from considering alternative business development approaches which may involve higher risk and investment but don’t necessarily rely solely upon current customers or even current product or services portfolio?

a.       The strategic growth management matrix gives a simple overview of the general business development options as a basis for internal dialogue and planning amongst the team.

b.       Again scenario planning is a great overlay tool to assess the potential future variables of the optional strategies identified

Critically though ..is my business fit for implementation of a growth strategy ? what are the organisations' capability and capacity limits?, how much growth can we manage?, what are the risks of getting this wrong?

Organizations have limits, ironically the effects of a successfully implemented growth strategy could be anything but positive in the longer term, consider some of the potential issues;

• Increasing operational capacity to a level not sustainable

• Stressing your supply chain above its capability

• Availability and motivation of key staff to manage the increased workload

• Managing the increased pressure on cashflow

These are often interconnected issues and can result in negative impacts on the two most valuable assets a business has,... its Customers and staff and ultimately potential loss of reputation.

How can this situation be managed?

From my experience the most effective activities to ensure balancing growth strategy with Organisational readiness are:

• Regularly review the company strategic business plan

• Regularly evaluate performance in every area of the business and identify priority business improvement areas

• Ensure major growth initiatives are fully planned and costed identifying all risks and impacts on the current organisation

• Stress test any major growth initiative against the capacity and capability of the organisation - Viz: Organisational robustness, financial capacity, target customer & market awareness, operational capacity, Internal skills and Knowledge levels.