Haste Makes Waste
“Haste Makes Waste”
It’s tempting to grow quickly, but backsliding can be fatal. Thoughtful growth is tougher than it sounds. It requires a detailed strategy, passionate employees — and a persistent CEO.
Their reward? Building a thriving company that weathers economic downturns, responds nimbly to changing markets and cultivates loyal relationships with employees and customers.
To develop a thoughtful-growth mindset, consider three different orientations when plotting company strategy:
- Results. Think in terms of fulfilling the promises you’ve made to customers, partners, suppliers and employees. What must happen for your outcomes to meet or exceed your stated commitments? Focus on meeting budgets and deadlines.
- Rivals. Growth rarely occurs in a vacuum. Study competitors, and note how you can differentiate yourself. By filling a niche and creating barriers to entry, you solidify your market position.
- Do it now! Smart CEOs pounce on opportunities, run experiments and seek new ways to boost efficiency and streamline operations. Just because you embrace thoughtful growth doesn’t mean you must overthink every move.
In practice, you want to translate quantitative financial goals into best practices that govern how you and your employees conduct everyday business. For example:
- Reward salespeople for both high production and expense control, so that the company grows by attracting the most desirable, profitable types of business.
- Train a product-development team to anticipate and fill market gaps one to two years ahead.
- Evaluate growth opportunities systematically using a risk-reward scale.
Turn employees into participants
Invite employees to participate in your growth so they’re emotionally invested in your company’s success. Share your goals with them and show how their contributions affect the bottom line. Recognize their efforts in a variety of ways, such as a pat on the back, a cash bonus or a glowing profile in your company newsletter.
Turn everyone on your team into a business generator. Introduce a referral system where every employee has the training and resources to woo prospective buyers. Reward them for bringing in association lists or club members who might benefit from your company’s products or services.
When you forecast growth, explain to employees and other stakeholders how you arrived at the predictions. Prove with each passing year that you live by your projections, and you’ll keep gaining the credibility you need to raise the bar and deliver "stretch goals."
In charting a thoughtful-growth path, one of the toughest questions you and your employees will face is: What business are we in?
Ask this question in every staff meeting to spur workers at all levels to think strategically. As a result, they’ll explore areas for growth, make suggestions and expend more effort in their jobs.
The search for finding "the right business to be in" never stops. What seems like an obvious answer in June may change dramatically by September based on economic swings, market cycles and other factors. As CEO, you must constantly redefine who your customer is — and educate everyone on how the company makes money and intends to grow.
Writer: Morey Stettner, a management writer and trainer in Portsmouth, N.H., is author of "Skills for New Managers" (McGraw-Hill, 2000). email@example.com
CEOs Making it Happen: Thoughtful Growth
As Irma Tuder’s business grew, she decided she needed a more sophisticated strategy for reaching the next level. With the help of a consultant, she devised a strategic "road map" looking five years ahead.
Now three years into this five-year plan, Tuder credits it for accelerating growth at Analytical Services Inc. The Huntsville, Ala.-based systems-engineering and IT-services firm grew from $8 million in 2000 to $15 million in 2001.
Tuder’s growth strategy now revolves around three simple words: "And then some." "We try to exceed customer expectations, to give them what they expect and then some," she explains. "I’m vocal about our philosophy, and I’m always reinforcing it when I talk with employees. With all of us pushing to differentiate ourselves from competitors by giving our customers more, it cannot help but lead to growth." For example, her company won two big contracts recently because satisfied customers referred other customers.
One of Barbara Miller’s secrets for steady growth: her 15 salespeople.
Founder of Miller Paper Co. in Amarillo, Texas, Miller does not employ a sales manager — "never had one, and we don’t need one now," she declares. Her salespeople like the independence and lack of bureaucracy that comes with dealing directly with upper management.
"Without a sales manager, they can’t dodge things or have anyone else to blame," Miller says. "They know I’ll provide training, support, efficient deliveries and bookkeeping. I just hire great salespeople and let ’em sell."
Miller compensates her salespeople entirely on commission; two earned more than $100,000 in 2001. Indeed, Miller sees her firm’s growth as a byproduct of her effort to motivate her salespeople. The company has produced double-digit percentage increases in sales every year since 1995, hitting $9.1 million in 2001.
Tom Dinwoodie praises the Boy Scouts’ resourceful, live-within-your-means attitude as a template for how to build a business.
PowerLight Corp., a Berkeley, Calif.-based installer of solar electric systems, has doubled its revenues every year to reach $25 million. "In 1991 we predicted our growth in deliberate stages," recalls Dinwoodie, PowerLight’s founder and CEO. "We knew we wouldn’t have a commercial product until around 1995, but we also knew we’d grow pretty fast after that point. And that’s what has happened."
To spur growth, Dinwoodie finds it’s critical to hire employees who are passionate about what the company does. "Part of our growth strategy is built on having a coherent mission that everyone here buys into," he explains. "We attract people who care about the environment. We get emotional about it. Because of that, we expect more and get more from everyone on board."