As a business grows it will continue to face challenges. These challenges are in actual fact, opportunities. Opportunities to create change that can deliver increased effectiveness of what it is the business does. Our contributing author, Robin Hook examines how to change our perspective on the ceaseless hurdles that come our way and turn them into favorable circumstances for our businesses.
Regardless of whether you are a startup or a well established organisation, all that differs is the nature of the opportunities and the ability of each to be effectively navigated so that the business can keep growing.
The different challenges demand different solutions as they appear. But what was done last year may not be the most effective approach now. The inability to innovate new ways of maximising opportunities, and be able to overcome complex challenges, can quickly see a healthy business take a turn for the worst.
Just as essential as being able to recognise incoming challenges as early as possible, is the ability to ensure that the way in which they are solved does not hinder the businesses ability to continue to thrive and grow. What this means is that a business needs to ensure that the solutions it comes up with today does not become the cause for more problems down the line.
It’s also of critical importance that the operational solutions being pursued are done so in the context of Digital Transformation. Businesses should, where possible and appropriate, be looking at digital optimisation as viable solution for change.
Let’s have a look at some common high-level challenges that a growing business faces, the opportunities they present and ways that they can be addressed.
Well this one does what it says on the box!
A product or service that is relevant today may lose its relevance tomorrow. So, regardless of whether you sell a service or product, an awareness of what’s happening in the market, who the new players are, what is new and what is old, is all important for ensuring that what you offer your clients remains relevant and in demand.
Everything in a market ages, sales fluctuate, profit margins get squeezed and more. Being aware of where your service or product is in its own life cycle allows a business to strategise when adjustments need to be made to give them new life that will ensure ongoing sales and profit.
UNDERSTAND THE ROLE OF PURPOSE & STRATEGY
The vision (or purpose) of your business is a long term goal for what the business wants to achieve. This purpose is one that is near set in stone. A ‘North-Star’ that is used to guide the day-to-day choices that are made. Are we staying on course? Is this decision we are making in the best interests of what our purpose is? Just some examples of the type of questions a business must ask as it goes about its business.
Strategy on the other hand is not set in stone. Strategies can change. Strategies are flexible. Strategies are shorter term goals that, when stacked together are the stepping stones that allow the purpose of your business to be achieved.
How you ask?
In pursuit of a purpose, the way in which a business set out to get there a year ago may not be right right now. This may be because of a number of reasons. Perhaps external market influences or changes to the cost of a critical resource your business cannot do without. Regardless of the reason, it requires a revisit to the strategy to be adjusted to figure out how the business needs to realign its focus in order to stay on track with the overall delivery of its purpose.
This is a good thing. A business strategy that doesn't change over the course of a number of years is a strategy that is likely going to lose relevance, stray from its purpose, lose profit, lose customers, and, well, you know where this is going.
Let your purpose stand strong. Allow your strategies to change when needed to deal with the things that challenge the business on an ongoing basis.
Whoever said that money isn't everything, was lying!
Unless your business doesn't need to turn a profit and have cash on hand in order to operate, cash flow, or the lack thereof, can be the biggest reason that growth in a business is limited, or even fails!
When drawing up your business plan, financial planning and ongoing financial management is one of the most critical things to get right. It allows your business to pursue opportunities when they arise. In the absence of cash flow, these opportunities will be passed up due to not being able to fund things like resources, materials, research or operating elements for your business.
By not being able to do so, you are essentially starving your business. Which, much like the human body, stunts growth and causes stagnation. Both of which will give rise to other problems that affect the performance of your business.
Plan ahead to try and foresee financial needs of your business. Ensure ongoing working capital into your financial operating model that will maximise your cash flow.
FOCUS ON WHAT MATTERS
When a business starts out there are always new challenges that come up that need to be sorted out. A perpetual cycle of challenges, solutions, more challenges, more solutions! It may seem like all you and your management team do is tackle problem after problem! When are you supposed to get to all the other important areas of the business, like clients, marketing, sales, etc? Ignoring everything else but the current problems, is not sustainable. The business cannot survive in constant crisis more.
It's important that your business doesn't panic with every new crisis and takes the time to assess the scale of the issue in the context of the bigger picture. ‘How is this crisis going to affect the overall business’? Can I afford to put my whole management team onto it and neglect other areas of the business? By doing so, it is likely that it will not cause major damage by assigning someone to solve the issue whilst the rest of the business carries on, business as usual.
When a business grows, its important to be aware of the scale of problems in the context of the business and its priorities. If that awareness by the leadership is on point, and their understanding of the business plan, purpose and strategy is sound, it will allow for problems to not all be seen in isolation and not sap the company resources, time and energy to being solved which will cause neglect in other areas. Neglect which may have a more negative effect on the business than the problem that is getting all the attention.
Focus on the problems that matter. Prioritise their importance and a way to address them in an orderly fashion.
INVEST IN SYSTEMS
Even in a small business there’s so much going on at once. Finance, costs being raised, invoices being sent out, debt being chased, projects being managed, assets being moved around, communications being sent out, and a lot more! Way too much to be able to keep track of it all without the right systems and processes to support it all. To give order to it all.
The things that the people in your business are responsible for is one thing, but without the right management and information systems in place, the business can't expect them to be able to manage it all. Chaos and disorder is the only thing that is going to result.
Invest in the right programmes, systems and technology, supported by suitable processes will ensure an efficient, well-managed, orderly ecosystem that allows the different functions in the business to work together.
Without these essential infrastructures, a business will be unable to scale. Because as it scales the more volume of information will be flowing through the business. So it is a good idea to get it right from the start, and adjust as the business grows. Whist it may work to keep things casual when there is just one or two people in your business, this informality is not sustainable whether your business employee numbers grow, or your clients do.
BE OK WITH LOSING CONTROL
This one is a doozy! You are the one the decided to start the business. You are the one that had sleepless nights getting funding, setting it up and getting clients on board. So then you know what's best and you want to make all the decisions. Right?
Wrong! The ability of someone to launch a business is not the same as the ability to grow a business.
Don’t place too much value on your overall abilities if the reality is that they lack in some areas. Acknowledge where your, and others, strengths are. Come to terms with it, and let them get on with it. Hold them accountable, but at the end of the day, let them do what what you employed them to do best. It’s in the best interests of your growing business.
Holding on too tight to every decision that needs to be made in a growing business can create major problems in culture, quality of your product or service, decline in profits, and others that could be detrimental to the survival of your business.
In summary, a start up business, or one that has been around for a while, the challenges will keep coming. In the advent of the 4th Industrial revolution the need for innovative, forward thinking, digitised solutions are essential to future success. However, if the fundamentals in your business operating structure are not in place before you start to explore more complex solutions, there is no solid foundation that future change can launch itself forward from.