Breaking through the Growth Wall
Why do so many owner-managed companies fail to escape their initial entrepreneurial growth phase?
There is a long list of conventional explanations: here are just a few
- inadequate growth capital
- exceeding the owner managers personal span of control
- the development of bureaucratic practices
- inwardly looking management
- the loss of entrepreneurial energy
Breaching the Wall
Escaping the trap of 1st phase growth is not always easy. Understanding, acknowledging, and attacking environmental growth constraints can lead to renewed growth and a new phase of entrepreneurial development.
Get the Facts
The essential first step in any 2nd growth phase is to develop baseline information on what has been happening to the landscape in which your company has been operating. Competitor profiles, a study of customer needs, marketplace patterns and an examination of relevant technological changes that may affect products or services are the critical raw material for building a plan to circumvent the growth wall.
As a minimum, such an analysis will seek the answers to the following questions:
- Are your Companies customers growing? Why or why not?
- Are competitors growing? What can be learned from their successes or failures?
- Is the market niche for the company's products or services growing?
- Is it large enough to permit growth without major increases in market share?
- Does the pattern of technology that surrounds the company tilt toward threat or opportunity to future growth?
Creating a Growth Task Force
Select the company's most creative &/or analytical people to serve on a growth task force. This should be done without regard to rank or function, although the person responsible for sales should probably be a mandatory member. The growth task force should set a goal of no more than 90 days to complete its assignment duties and report back. Its task is 4-fold:
- Organise and interpret the data researched
- Identify the company's strengths and weaknesses in relation to its environment
- Brainstorm ideas that leverage strengths and suppress weaknesses against environmental opportunities and obstacles
- Select a manageable list, perhaps 2 or 3 of the task force's boldest ideas to test in the marketplace
The positioning process implicit in these 4-tasks should uncover the underlying reasons the company has stalled. Likewise, the recommended growth ideas must attack the causes of no growth. This focus is a critical discipline if the task force's ideas are to succeed
Your own 2nd Phase Growth Assessment
The AEI Centre can help you breach the wall - Is your company ready to move on? Click here to receive information regarding your own businesses 2nd Phase Growth Assessment