This Week@Work a discussion around acquisitions as a strategy to accelerate growth gave Pavlo an opportunity to explore this idea in more detail. Several types of growth make up your business growth recipe if you intend to grow revenue, profit as well as capital value that can be realised.
Accelerated growth is one of these, and has a number of elements to it but an acquisition of a business may not be the path to achieving it.
Introduction: Building a successful business is akin to our personal development journey. Just as we evolve from infancy to adulthood, our businesses must also adapt and grow to support their expanding needs. Relying on the same foundation that launched your business may hinder its potential for growth. To avoid adverse outcomes such as being trapped in the day-to-day operations, losing customers, team members, and suppliers, and stagnant growth, it is crucial to embrace the concept of building while you fly. In other words, as your business takes off, you must continuously improve and upgrade your infrastructure to soar higher and achieve sustainable growth.
Evolving with the Right Chassis: Similar to our musculoskeletal system adapting to support our growth, your business needs a strong foundation that can accommodate its expanding size and ambitions. The chassis that served you well during the initial stages may not be suitable for long-term growth. By recognizing the need for a more robust infrastructure, you can build it out to operate independently of you and thrive beyond your individual efforts.
Escaping the Life of Firefighting: Failing to build while you fly often leaves you in a never-ending cycle of firefighting. You find yourself constantly addressing urgent issues, unable to focus on strategic growth initiatives. By investing time and resources into building a solid foundation, you can release yourself from the daily operational challenges and gain the freedom to concentrate on driving your business forward.
Safeguarding Customers, Teams, and Suppliers: If you don’t evolve your business, it can have detrimental effects on your relationships with customers, team members, and suppliers. As your competitors adapt to changing market demands, you risk losing customers who seek innovative solutions elsewhere. Additionally, without a scalable infrastructure, your team may become overwhelmed, leading to disengagement or turnover. Suppliers, too, may be hesitant to collaborate if they perceive your business as stagnant. Building while you fly ensures that you retain these crucial stakeholders and foster long-term relationships based on growth and mutual success.
Embracing a Virtuous Cycle of Growth: Stagnant growth can create a negative feedback loop, draining your business of vitality and potential. On the other hand, building while you fly establishes a virtuous cycle of growth and confidence. By consistently investing in your business and upgrading its capabilities, you attract the right opportunities and talent, further fuelling your growth trajectory. This cycle fosters an environment of continuous improvement and optimism, empowering your business to reach new heights.
The 9-5 Operation and 5-9 Investment: To successfully build while you fly, it is essential to strike a balance between day-to-day operations and investing in future growth. The traditional 9-5 work schedule may fulfil immediate responsibilities, but dedicating the 5-9 time slot to strategic planning, skill development, and innovation is equally crucial. By allocating time outside regular working hours to invest in your business, you can unlock numerous benefits.
Benefits of Building While You Fly:
Sustained Passion: By embracing the mindset of building while you fly, you remain enthusiastic about your business, constantly discovering new facets of yourself, your industry, and its potential.
Increased Efficiency: Investing time in growth-oriented activities allows you to optimize processes, improve productivity, and streamline operations, resulting in time saved that can be redirected toward expansion.
Competitive Advantage: Remaining proactive and forward-thinking positions your business on the front foot, ready to seize opportunities and adapt to industry shifts, enabling you to attract the right collaborators and stay ahead of the competition.
Sustainable Growth: Building while you fly propels your business toward sustained growth and success, as you continuously upgrade your infrastructure, attract new customers, nurture your team, and forge stronger partnerships. Building while you fly is a critical concept for achieving sustainable growth in your business. By acknowledging the need for ongoing evolution, you can avoid stagnation and unlock your business’s full potential. Escaping the life of firefighting, safeguarding valuable relationships, and fostering a cycle of growth and confidence are the rewards of investing time and resources into upgrading your infrastructure. Embrace the 9-5 operation and 5-9 investment approach, and you will witness your business soar to new heights, driven by continuous improvement and a passion for progress.
In today’s uncertain and evolving economy, scaling and dominating your industry require more than just a great product or service. It demands a combination of a resilient mindset and a resilient business model.
Resilience is the ability to persist and stay proactive despite challenging circumstances. By cultivating the right mindset and implementing a robust business model, entrepreneurs can navigate the ever-changing landscape and achieve long-term success.
The Power of a Resilient Mindset: A resilient mindset is the foundation for overcoming obstacles and staying ahead in the game. It is an attitude that governs your behaviour and shapes your response to adversity. Developing the following mindsets is crucial for sustainable growth:
Operator Mindset: Embrace the day-to-day grind and persistence necessary for success. It grants you control over shaping and crafting your business.
Growth Mindset: Continuously seek opportunities for improvement and learning. Be open to innovation and adaptability, always striving for growth.
Winning Mindset: Cultivate a positive outlook and a belief in your ability to succeed. Maintain a determined attitude and approach challenges as opportunities for victory.
Investor Mindset: Think strategically and long-term, weighing risks and rewards. Make decisions that align with your vision and attract investment.
Building a Resilient Business Model: A resilient business model is the blueprint for translating effort into economic success.
Conventional wisdom suggests focusing on product or service excellence, establishing functions, recruiting to enable those, and then growing by adding new products or markets.
The Asset of Value approach offers a more customer-centric perspective:
Define Your Target Market: Understand the specific customers you serve and their needs. Tailor your offerings to solve their problems effectively.
Customer Experience Focus: Prioritize creating an exceptional customer experience throughout the client journey. Differentiate yourself by delivering that experience consistently in a way that differentiates you from your competitors.
Design in Collaboration with Your Team: Engineer your business model together with your team. Delegate leadership roles and foster a culture of collective responsibility and growth.
Lead Growth: As the business owner you have to lead your business’s growth and ensure that growth doesn’t dismantle your system of delivery. Maintain a consistent level of service quality as you expand and enter new markets or add new products.
Combining personal resilience with a robust business model maximizes your efforts and drives economic success. By staying adaptable, continuously improving, and keeping your customers at the centre of your operations, you position yourself for exponential returns and long-term sustainability.
I recently facilitated a business growth workshop for 89 established business CEOs, and the key question that arose was, “How do we get growth in a low-growth economy, riddled with power outages, held back by skills deficits, eroded by inflation, and impeded by gross negligence from the government?” Here are a few approaches to delivering growth across our client base today.
Growth begins with your mindset.
The foundation for growth in any business starts with your mindset. How you think affects how you engage and behave. There are two mindsets:
An operating mindset and a growth mindset. The operating mindset works hard to get growth but often hits a ceiling, building frustration that results in blame and cynicism. It does not yield growth!
A growth mindset works hard and smart. Acknowledging that most of your thinking and understanding is shadowed by not even knowing what you don’t know, or doubt, leads to a curious engagement with insights, perspectives, and new approaches. It helps create a restless and relentless intent to continuously improve, learn, and try new approaches. Across most of the developed world economies, a 64 year old business owner last experienced persistent inflation and interest rate increases at the age of 20. This invalidates much of what individuals experience in traversing the current inflationary and interest rate rises that govern these economies today. If the old dog won’t allow itself to be taught new tricks, it might well perish without a fresh perspective, new insights, and the courage to do things differently.
Growth needs a plan.
To achieve growth, you need a plan that is engineered through design and implementation. There are seven types of growth, each distinct from the other, whose timing and attention are vital. These include organic growth, financial growth, geographic growth, product/service line growth, customer segment growth, acquisition growth, and franchising growth.
Growth must be hunted.
Low growth means that you must grow by outplaying your competitors and eating their lunch. You must also grow by proactively responding to the changes in the status quo governing the problems you solve for your customers, how they behave and buy, seeking opportunities created by corporate outsourcing work to lighten their cost load and become more agile, and from accidental privatization resulting from government incompetence in service delivery.
Growth needs a number.
Tracking, measuring, and achieving growth requires a number to manage your path to success. A company valuation is not luck and prayer; it is primarily engineered, with luck playing a “timing role.” This number allows you to measure and manage your growth effectively.
Growth needs a team.
Your team is crucial to achieving growth, and it is important to ensure that everyone is aware of the growth plan. In over 10,000 surveyed businesses, 95% of employees were unaware of the growth plan, leaving the CEO to do all the heavy lifting. This can result in hitting a growth ceiling because you reach your capacity, and worse, you may fail the business because you burn out.
Growth is intentional and supported by a plan that is brought to life through your strategy, business design, team, and target. The economy’s condition is largely irrelevant when it comes to achieving growth. By adopting a growth mindset, creating a plan, hunting growth opportunities, measuring your progress, and building a strong team, you can unlock opportunities and overcome challenges to achieve sustainable growth in your business.