Most businesses actively and continually seek to grow and expand. The rewards of growth are self-evident. However, the pursuit of growth opportunities must always be balanced against the availability of resources. Not even the largest, most firmly established organization has unlimited funds or resources, and many leaders must routinely make difficult choices when seeking growth opportunities.
While opportunities can present themselves at any time, taking a strategic approach to growth will help in the selection of the best opportunities for investment and expansion. In addition, by taking the time to think through the strategic priorities and trade-offs, the company is optimally positioned to take fullest advantage of opportunities as they emerge.
Supporting business growth
Developing these four capabilities will help leaders prepare their organizations for growth:
Become a master of differentiation. To achieve sustainable growth, a company must win over a critical mass of customers on a consistent basis. This is no small feat in today’s market, where innovation happens at lightning speed, limiting the effective life span of any potential breakthrough offering.
In such an environment, differentiation is key. An organization that manages to stand out from tough competition, regardless of whether it has the most cutting-edge products or services, is well positioned for competitive advantage. Finding innovative ways to differentiate a business model, a process or technology, or a customer experience can prove even more advantageous to an organization than product innovations alone.
One way leaders can facilitate this type of innovation is to seek diversity of thought on strategy-setting teams. Including the perspectives of people with a variety of backgrounds and thinking styles can significantly expand the awareness of potential ways to differentiate an organization.
“Jobs theory,” as described by Clayton Christensen and his co-authors in their book Competing Against Luck: The Story of Innovation and Customer Choice (HarperBusiness, 2016), offers another way to foster innovative differentiation. Rather than trying to second-guess the market by dissecting customer demographics and market trends, jobs theory explores consumer intent by asking what specific “jobs” customers “hire” a product or service to perform. For instance, a milkshake could serve as a treat or reward for oneself, a bribe to get children to behave, or an easy meal replacement for a busy person. Determining exactly which problems consumers expect products to solve provides exceptional insight into what actually drives consumer choice. This can help companies position themselves in unique ways that speak directly to customers’ needs and help the organization stand apart from the competition.
Understand the implications of your proposed growth strategies. Often, leaders are quick to make strategy decisions without fully analyzing what the consequences will be as the decision cascades throughout the organization.
For example, acquiring a competing company may initially seem like a quick and easy way to expand market share. However, the organization may not be equipped to serve a suddenly expanded customer base. Is the increased revenue worth the potential confusion customers may experience about brand or offerings? Or perhaps the two organizations have very different cultures. Are leaders prepared to deal with what may be a difficult transition as the two companies merge?
A thorough exploration of the implications of every potential strategy can help leaders avoid unintended scenarios and zero in on the most promising long-term growth opportunities.
Choose frameworks that will facilitate both efficiency and growth. Successful growth demands the shifting of resources to favor differentiating capabilities. To accomplish this, a company needs to optimize efficiency in supporting areas of the business. When preparing for growth, leaders should pay close attention to operating models, structures, and delivery systems, choosing those most likely to facilitate efficiency in organization design in addition to supporting growth activities.
Design alignment into your organization. To maintain sustainable business growth, an organization must remain nimble and responsive to a rapidly changing market and tough competition. This can only be accomplished through continual and sustained alignment of the organization with its strategic goals.
Leaders should take steps to incorporate alignment practices and systems into the design of the organization. In addition, they should consider scheduling regular time to reassess resource allocation with the intention of facilitating alignment toward growth opportunities.
Leave “industry average” in the dust
The rewards of well-orchestrated growth are irresistible enough to warrant a significant allocation of resources toward potential growth opportunities. The challenge for leaders is to minimize risk and optimize chances of success by carefully planning for growth. By achieving differentiation, carefully considering strategic consequences, selecting proper operating models, and maintaining a constant focus on organization alignment, leaders can create a successful environment to fuel business growth and facilitate improved long-term profitability.
Leaders who develop and promote a disruptive mindset can help their business capitalize on new opportunities and safeguard it against stagnation.