August 28, 2017
When it comes to pursuing strategic growth, one of the biggest mistakes a leader can make is to simply keep doing something because that’s the way it has always been done. It’s important to reevaluate processes and methods with today’s business environment in mind.
The very nature of business is change. New technologies, capabilities, and competitors pop up and customer demand changes. Here are five ways to rethink your approach to strategic growth:
Know thyself. Before leaders can determine where they want to go as a company, they must have an understanding of where the business stands today. Leaders need to take a step back and view their business with fresh eyes.
Introspection provides a rational foundation for making decisions, and the information gained during this self-examination will prove invaluable as leaders determine the next steps for growing the company.
Be proactive. Many leaders are reactive rather than proactive when it comes to growing their companies. Some leave their success to chance by relying on opportunities that happen to come their way rather than seeking out the best ones.
Instead, leaders should determine what their ideal opportunity or opportunities look like and develop a strategic plan based on this ideal. Then, they should search for growth options,
whether it’s a partnership, a new technology, or a new product, to help execute this strategy.
For some companies, the strategic plan revolves around what the competition is doing. Although it’s important to have an understanding of the competition, reacting will always mean you are one step behind. Leaders should take control of their own future by focusing on customer demand. Happy customers are the source of success for any company. Find out what they want and focus on that, rather than on your competitors.
Consider external growth. Most leaders tend to focus on organic growth—hiring more sales staff, building a new branch, or internally developing a new product. But there are times when organic growth alone will not move the needle.
When markets are saturated and organic growth is stagnant, companies should consider using external growth by partnering with an outside organization, whether that’s through strategic alliances, joint ventures, minority investment, majority investment, or acquiring 100% of another company.
External growth can help you rapidly enter a new market, add a new technology, grab market share, or bring on talented people. Developing these initiatives through organic growth alone takes time and expertise you may not have.
Get input from your team. Developing and implementing a strategy requires multiple skills, and successful growth requires multiple perspectives. When developing a growth strategy, brainstorm as many ideas as possible and leave no possibilities off the table. Only a strong idea will stand up to rigorous analysis from multiple perspectives.
Who should be included in these discussions? It’s best to bring in a team member from various functions, including sales, operations, finance, accounting, legal, and human resources. Having multiple team members not only encourages different perspectives and voices but also prevents “silo thinking,” where leaders become so focused on one aspect that they might miss out on critical items.
Use criteria for objective decision making. In today’s information world, it’s important to pair real-time data with analytical skills to arrive at the best decision. To evaluate growth options, leaders should establish criteria for an ideal opportunity in order to measure each idea against the same benchmark. If 10 equally bad opportunities are compared against one another, they might not seem so bad. But if they’re measured against the ideal, the downsides will become evident.
Determine four to six criteria that are most important to the ideal growth opportunity and develop metrics for each one. This should be clearly communicated with the team so that everyone is aware of how opportunities will be measured and scored.
Relying on yesterday’s strategy in today’s market can lead a company to ruin at worst or mediocrity at best. Instead, follow the tips presented here to accelerate a company’s growth.