Growth is vital to any business enterprise, but it’s also extremely important that it’s managed correctly. For the best in growth strategy advice NZBusiness went to Liz Wotherspoon, the head of growth at The Icehouse business growth centre.
NZB: All business owners will tell you they want to grow their turnover and sales, but many are apprehensive about real business growth because they fear the extra work, responsibility and risk it brings. What’s your message to these business owners?
Liz: We see this from time to time and often it comes when a business owner has lost confidence in their ability to take the business to the next level or they’ve lost the motivation.
It seems to be a question of both “the will and the skill”.
Growth does not need to mean more risk, more hours and more headaches. My advice is to invest time in understanding where the opportunities for growth are and what is required of the business owner and their team to succeed – as well as where their gaps are. They need to be honest about where they and the business are in terms of growth and seek the support they need and/or proactively make the changes necessary to manage through the transitions.
Business owners too often try and go it alone and don’t take enough time out of the business to get perspective, hear the growth stories of other owners – good, bad and ugly – and be inspired and challenged by the ideas of others.
NZB: What’s the best strategic approach for business owners who genuinely want to manage real growth in their business? What potential traps or hurdles do they face?
Liz: The Icehouse’s view is that growth matters. But good growth is growth that is profitable and sustainable, and this requires being deliberate and disciplined.
The difficult task for business owners is to make sure the business raises its ability to handle growth as rapidly as it does its revenue line. Business owners need to have a systematic way of looking at the specific opportunities for growth. What are they? Which are relevant to their business? What are the criteria to use to select the appropriate growth strategies?
Sometimes business owners need to confront some brutal facts and acknowledge whether they need to earn the right to grow by laying the foundation for growth and ensuring strong operating performance before they resolve to grow.
Some businesses are just not prepared for growth and they need to build a solid foundation before they pursue new opportunities. Some of the potential traps or hurdles relate to resourcing growth and whether they have the capability and capacity they need. This is often a people thing, but it can also be about how they fund growth.
Business owners need to evaluate the various growth pathways and work through scenarios that include potential risks and pitfalls. They must plan, including balancing short-term and long-term goals.
NZB: If a business owner asked you for help because he/she is struggling to grow in the current environment – what initial questions you would ask?
Liz: Business growth is a full contact sport. Value is created when opportunity, intuition and the big picture collide with having really good systems, processes and structures. My questions would be directed at understanding their current opportunities and challenges and the competitive positioning of the business.
How well do they know their customers of today and of tomorrow, and based on what?
Do they know why customers buy from them instead of from their competitors?
I’d also want to understand more about their operational, people and financial systems. I’d ask questions related to their financials: profitability, the strength of their balance sheet and some key financial ratios.
I’d also ask them metaphorically ‘what keeps them awake at night?’
NZB: New Zealand celebrates its fastest growing companies through awards and recognition, but often fast growth produces speed wobbles? What is the truth about the pace of growth. How can it be best managed?
Liz: Momentum these days is incredible, so pace is important, but you can grow too fast as well as too slow. It’s about being wilful and diligent with growth.
Business owners need to be consistent and agile simultaneously. They must work hard, plan diligently, produce results, be resilient and persevere. At the same time, they need to observe trends, monitor what’s happening around the edges of their business and interpret this in the context of their business.
Business owners need to get curious and get out of their comfort zone rather than clinging to old habits and practices. Driving change when required is critical, as is creating a culture of urgency.
NZB: Often the best strategy for growing a business is to find investors and potentially hand over partial control? What’s your advice in this regard?
Liz: Choose your partners carefully but don’t constrain growth by clinging to the notion that you need to retain 100 percent ownership in order to be in control of your own destiny.
Explore the different options available to fund growth and understand what it would take to make your business ‘investment ready’. Again, seeking external advice from people who’ve gone down this track and from experts who work in this space and understand who the investor audience is and what the investor stages are, is a very smart idea.
NZB: What are your absolute ‘Top 10’ tips on business growth?
1. Be very clear about your ‘why’ or your vision.
2. Pay attention to trends and monitor what’s happening around the edges of your business and your industry.
3. Plan, including balancing short-term and long-term goals. Remember, ‘to win, a company must choose to do some things and not others’ (Roger Martin, Playing to Win).
4. Know why your customers choose you – not what you do but what your customers get. Think like your customers, not about them.
5. Know your numbers.
6. Communicate to produce alignment.
7. The right people are your greatest asset, so build your team and facilitate them working as a team. Be deliberate about creating the culture you need to succeed.
8. Learn from your successes and your failures.
9. Seek out the perspectives of others and ask for help when you need it.
10. Be wilful and diligent, but also agile and ready to change.
Contact Liz or The Icehouse (0800 ICEHOUSE or [email protected]) if you want to discuss your business growth strategy.