Prepare for growth - Peter Tichbon
Peter is an interim and consultant; a CEO, MD, Operations, Sales and Transformation . Also, a member of the Consumer Manufacturing Advisory Board at Interim Partners.
Why do businesses need to invest in capability and prepare for growth?
Well, of course almost every business wants to grow. Typically, however, when people talk about growth they are doing it in the context of a step change.
Wanting to grow isn’t the same as being prepared for growth. If the business leaders don’t have a clear vision of what they are trying to achieve and how they intend to get the growth they are looking for, then their chances of delivering are diminished from the outset because they will not be focusing their resources effectively. The intention to grow without any clear idea about how to get there is little more than a loose aspiration, and certainly doesn’t supply the leadership and direction required for successful delivery.
Growth is also about change, and change itself is a capability- both organisational and individual. Therefore, businesses need to make sure that they both have a plan and have the capability to deliver if they want to grow, and that’s not always in place with the status quo.
What sorts of things typically trigger the desire for a step change in growth?
Pretty much every business wants to grow. But what generally triggers a more specific and urgent conversation about growth is not the everyday, but rather when a business has a change in aspiration or when their current circumstances become a barrier.
Within older and more mature businesses this is usually because either a business has stagnated or is in decline and needs to grow their top line to survive, or is triggered by a change event, such as a sale to private equity or a change in leadership. Either way, it is driven by either necessity or a change in aspiration.
For earlier stage businesses it is more often about the next step in meeting an existing aspiration. It’s therefore more often driven by either moving from a small to a medium size enterprise and slowed growth (as it has become unwieldy for the entrepreneur to be as hands on with everything as they’d like to be) or because they have successfully gained investment to take it to the next level.
So if a business has set itself on action, what does it need to do to prepare for growth?
There are three main things, but what is key is to have a clear plan - not just for where the growth is going to come from, but also to ensure that all functions of the business have the capability to deliver more business.
Without a plan, there is no way to ensure the organisation’s efforts are going to be directed toward the goals of the business across the board, let alone for growth. Although every employee may be working hard doing what they feel is best, if they end up working at cross purposes, then their passion and effort won’t deliver results.
Of course, even once you have a plan, your team still aren’t going to deliver it effectively if you haven’t aligned your resources to it or communicated what you are trying to achieve. So, the other two critical steps are ensuring that the plan is clearly communicated and that everyone knows what you expect from them, both individually and collectively.
Once you have a plan which everyone understands and their roles and objectives are aligned to delivery, then the entire focus is on the value-added activities that take the business towards its goals, and wasted effort on those things that don’t make a difference is minimised. And reality is, this is a good thing whether you’re looking for growth or not.
What happens if businesses don’t prepare effectively?
Typically, it’s about waste - of money and of resources. If all your people are heading in different directions without a plan, then you are very likely to be spending money on people working at cross purposes or on pursuing things that might not be the most productive or cost-effective sources of growth. Equally, driving your sales volume by 10% is all well and good, but if purchasing, operations and logistics can’t set up to meet the additional demand not only have you missed new sales, you may well end up damaging your reputation with existing customers.
A business’s resources are finite, and you need to be using them cost effectively in sales and marketing as well. If all your people are off focusing on opportunities that are costly to deliver and with a low probability of success, whilst missing “low hanging fruit”, then you are wasting opportunity. Equally, if too much resource is directed in one area when you could do with more than another, you are also wasting both money and opportunity.
So why do so many businesses fail to deliver growth effectively?
Often it is about capability. If a mature business is moribund or in decline it could just be a historical lack of ambition, but every bit as often it is about how good the leadership team is at establishing a vision and getting everyone aligned and delivering.
With earlier stage businesses it is often different, and more around what a founder is good at and where their strengths lie. What got an early stage business to the point of attracting investment or being ready for break out is often more about an exciting idea and a great passion than it is about organisational capability. When a business is small, lack of organisational capability doesn’t matter so much, but once it reaches a scale then these skills become more key.
This is where interim resource is a perfect solution. The additional resource in helping create the plan, creating alignment and communicating breaks the back of capability for growth. Once a business has these things in place along with appropriate reporting and measures, the focus moves to execution where existing resources can pick up the slack, capability and processes for the future are embedded and the business is set for the future.
But wherever they find their resources, a business which has a plan and has everyone aligned to delivery is the one which will always have the greatest success.
Thank you Peter for a great interview!
Should you wish to discuss finding the right resource for your business, please call Sarah on 07854 881048.
Sarah Simpson is the Principal of Consumer Manufacturing at Interim Partners.