As we finish Q1/17, now’s a good time to review your Q2/Q3 plans. How are you tracking? Are you on budget to deliver as expected? If circumstances have changed, you might consider some revisions.
As part of that revision, you might want to revisit your growth plans for this year. Consider whether they were realistic?
Massive sustained growth has been shown to be a bit of a furphy
Did you know that a Bain & Co survey showed that only 11% of companies manage to grow profits and revenues by 5.5%+ over a 10-year time period? Now if you’re a young company (first 3-5 years or so) you’re likely to experience exponential growth as you get yourself set up, systems in place, leverage staff, etc. But if, after that, you’re growing revenue and profits by greater than 10% year on year, well done you!!
Business ‘crisis’ periods
But did you know that if you’re growing, growing, growing constantly, it could lead to one of a business’ three ‘crisis’ periods?
- Overload – which happens in periods of significant growth where everything feels like there’s so much going on and change is everywhere, you feel like you’re barely hanging onto the roller coaster ride that is your business.
The same Bain & Co study, found there were two other crisis periods for business;
- Stall-out – those periods when the business loses its momentum
- Free-fall – when the business’ primary business model stops working and numbers/performance drop markedly. Probably the best example I can think of here is the taxi industry which is undergoing such a huge shift.
If you’ve ever hit any of the crises above, you’ll know they can be pretty intense.
But take heart, if it’s your business and you’re still heavily involved in it, it’s three times more likely to do better in terms of returns than those companies that are ‘professionally managed’.
And you’re significantly more likely to survive those crises and do well if you exhibit Founder’s Mentality.
What’s Founder Mentality?
There are four key factors.
- A strong mission (ie: your why for being in business that flows through the organisation) and it helps if it feels almost revolutionary.\
- An obsession with every detail of your customer’s experience and empowering everyone in the customer chain to make everything work for the customer as well as humanly possible.
- A sense of responsibility for your customers, employees, suppliers – after all, you’re all connected. If one group has a problem, it’s going to impact all of them.
- Speedy decision making – not haphazard mind you, just getting things decided in the most timely way possible rather than putting them off, or procrastinating. Weigh up, decide and move onto the next thing that needs your attention.
Embracing these factors will help you overcome the various crisis periods that can befall any business.
And whilst all of these are important, the most critical one is number two – your customer’s experience. Companies with higher customer engagement grow better and have improved profitability. That improved profitability comes via;
- improved customer revenues brought about by lower customer churn, greater customer loyalty and more customer referrals
- lower organisational costs – happier staff = better productivity, lower absenteeism, reduced attrition, better supplier relationships, etc.
So there you have it. Do everything you can to keep your initial ‘founders’ vision for your business or, if necessary, rediscover it and you’re more likely to get through whatever your business (or the market) throws at you.
Of course, if you’re looking for advice on your business, your growth plans or ways to better manage or review your costs, we’d be delighted to help. You can call Kerry on 6023 1700 or
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