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What Does This Boulder Have to Do With Business Growth?

Boulder in the Road

The Answer is: Plenty.

Attaining steady, sustainable business growth is the Holy Grail for owners. Some owners — even in competitive, mature industries — manage to win the gold. They rack up steady sales gains year after year. Others, in growth fields with a continual rising tide, struggle to get ahead.

Why do some companies cruise down an open road to business growth, while others’ revenue charts look like a roller coaster? Or worse yet, like a lightning bolt hitting earth?

Problems vs. Symptoms

The answer lies in the ability to distinguish symptoms from problems. And then, in digging deep to find and fix the obstacle or obstacles standing in the way of growth.

The problems that impair business growth almost always lie in a company’s business model, strategy, processes, systems, culture, or governance.  A study by senior advisors at the global consulting firm Bain & Company concluded that over 90% of the time, company growth is impaired by internal, as opposed to external factors.

If attaining sustainable growth is as easy as finding the obstructions caused by systemic or process problems, why don’t more owners do it? The reason is deceptively simple. Human nature has endowed all of us with blind spots and biases.

Familiarity and close proximity rob us of the objectivity needed to clearly see the problem. Some people possess the prescience to overcome this, but most do not.

In other cases, owners see the problem clear as day, but due to biases fail to grasp the full extent of the matter, or hesitate to take action.  The typical case is that of an owner’s relative employed in a critical function, but not doing the job.  Most often, it takes an outsider’s view point and objectivity to see both the problem, and its consequences.

Common Obstacles to Business Growth

The most common root cause problems that we see standing in the way of growth are:

  • Incomplete, inaccurate accounting and management reporting information, preventing good decision-making.
  • Salespeople and reps not well-coached, struggling with time management, and operating without useful data and metrics.
  • Company cultures hostile to change and innovation.
  • Lack of effective operating governance — and a clear understanding of employee responsibilities, expectations, and goals — and processes for monitoring progress and holding people accountable.

Getting to the core root cause obstructing growth requires a systematic and methodical deep dive. Once the core problem is accurately identified, solutions are often not difficult to implement.

Thus, owners and their advisors need to be mindful of their specific boulders in the road to growth. Until core obstacles are removed, all other efforts to grow will not be fruitful. But remove the obstacles, and it can be an open road.  

If you have any questions or comments on this post, contact us, or send us an email at info@rkgconsultinginc.com. 

Grow or Die?

grow or die

 

Recently, I became engaged in a heated debate with a client. The topic of controversy: Whether the grow or die axiom, so popular in corporate America, was a binary choice.

I was urging my client, a senior partner in a well-established accounting firm, to embrace more growth-oriented strategies than he was comfortable with. In doing so, I am embarrassed to admit, I resorted to a cliché.

“You always make things binary,” my client chided me. “It’s not one or the other. A company can grow and still die. It can fail to grow, and yet not die. It does not have to be grow or die.”

As a management consultant helping companies improve business performance, I teach clients new ways of solving old problems. But I am always amazed at how much I learn from my clients, for which I am grateful.

My client was right. The names of some companies that had spectacular growth, right up to the moment they died, came to mind. And I conjured up examples of companies that have never grown, but enjoy year-after-year steady profits.

So a deeper dive on the “grow or die” mandate became necessary. After pondering the topic, here are my conclusions:

Grow or die is about improvement, not literal growth.

Taken literally, it is true that growing companies die, and that non-growing companies enjoy longevity. The phrase “grow or die” does not refer to literal growth, such as increased sales, margins, or profits. It refers to continuous improvement of business strategy, processes, and execution.

Improvement produces literal growth.

In The Power of Habit, author Charles Duhigg tells the story of how Paul O’Neill turned Alcoa around by getting everyone to focus on improvement in just one area: worker safety. The result was not only a safer workplace, but a company that improved in other areas, resulting in dramatically increased sales, margins, profits, and shareholder value.

Grow or die should not be blind to quality of growth.

Not all growth is created equal. Quick or sporadic growth, or growth resulting from quirks of fate or happenstance, are not of the same quality as growth resulting from a company’s unrelenting quest to do a better job. Growth resulting from a process of continual improvement is the kind of growth that can be expected to be lasting, making companies sustainable for the long-term, and thus less vulnerable and more valuable.

Death is not always about heaven or hell: Sometimes it means purgatory.

Not all companies that die go to heaven or hell. Some simply linger in a state of perpetual stagnation. Employees become stale, dull, and disinterested. Product offerings fail to keep pace with changing times. Owners and managers become complacent, confident that doing what they have always done will assure future success. These companies are dead, and do not even know it.

Perhaps the foremost expert on the subject of growth, (at least biological and evolutionary growth,) was naturalist Charles Darwin. It was Darwin who said that it was not the strongest who survived, but those most adaptable to changing environments. And, after all, isn’t adaptive change what improvement is all about?

So, perhaps instead of preaching grow or die, I should have advised my client to improve or die.

What do you think?