It took me 30+ years to fully appreciate what my dad meant, but when I did, it was a great lesson. When any new business starts up, hunger for growth leads to the founder(s) being very active on the marketing front. They spend a lot of time working ON their business as Mr. Gerber (*The E Myth) says.
Then the IN stuff kicks in, and owner managers get busy doing what the business does. They take their eye off the ON things and the business stagnates. Growth comes from trying new things, taking risks, getting out there, looking for and taking advantage of opportunities. Just like you did when you started your business.
If you were able to grow your business at 40% a year from start-up and keep that up for 3-5 years, then you should be able to do that at any time BUT NOT IF YOUR TIME IS TOTALLY CONSUMED WITH DOING WHAT THE BUSINESS DOES.
The reason why many businesses that were started by the present owner(s) hit a brick wall after a few years is that they start to make enough money to ‘get by’ and are not willing to “risk” what they’ve built up in the pursuit of more growth. This is rationalised by “I’m too busy servicing my customers to get out and do the things I should be doing to grow the business.” They actually face a much greater risk by standing still and the risk will become even greater in the future because:
(1) Top quality team members will not hang around in slow growth, no opportunity, environments
(2) Business values in the future will increasingly be based on growth prospects (reflected by growth experience), customer and team member quality and loyalty, service design and margin. These things typically don’t score highly in slow or no growth firms.
Strategic planning is very important but it can also be very limiting. Take the “limits” away, as the most constraining limit is a mediocre growth target in your plan. If you want to double the size of your business you need to start with that as your goal, then ask yourself “what will it take to do that?” You won’t achieve that overnight but at just 15% growth a year, you will do it in 5 years. And if your business revenue has not doubled in the past 5 years then it won’t double in the next 5 unless you start to do some different things. To quote Herb Kelleher, when he was CEO of a very successful Southwest Airlines: “we have a strategic plan, it’s called doing things”
Peter Drucker told us in 1973, “there’s only one purpose of a business – to create a customer. The business has two – and only two – basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are ‘costs’.”
So what marketing and innovating are you doing? Those firms that are doing this are stealing the march on the rest. In Michelangelo’s famous words, “ The greater danger for most of us is not that our aim is too high and we miss it, but that it is too low and we hit it.”
