The recession has no doubt left marks on leaders. These scars are leaving CEOs cautious about instigating growth strategies. Some organisations are taking a slower approach than may have been done before.
Top tips for creating an effective growth strategy:
• Define what growth looks like for your business - every organisation is different so there's no one-size-fits-all approach to expanding it. Targets for growth need to be specific to your organisation and grounded in what your existing business is, who the competitors are, what the market is doing, what resources you have and who the target audience is - to name just a few factors!
• Identify the correct market - are you looking for new customers or is organic growth a more realistic goal? Are you thinking of moving into a new segment within your industry, tackling a new market or thinking of taking on something completely different? Whichever route you want to take, do the research and narrow down exactly who you want to talk to and how you plan to reach them
• Consolidate your existing business - the adage of walking before you run always holds true. Growing a business takes time, resources and budget - before you commit any of these to a new project, make sure the rest of the business is running soundly
• Do the maths - business expansion is definitely a case of playing the long game so it's important not to look only at the immediate costs of doing so. Investment in the short-term is probably going to be unavoidable but calculate the returns from those investments. However, spending alone isn't necessarily the formula for success either - be realistic about what you invest in the short-term so you can be sure there is a long-term!
Confidence is growing and forward-looking indicators are positive. However, there is still much uncertainty, currently with the upcoming election and as ever, changes in technology are throwing some businesses into turmoil.
Bal Samra, Director, BBC, says, “Confidence is growing; advertising revenues are starting to recover. The fundamentals are changing through the global impact of the internet - this will in my view irreversibly change business models. Even as a defensive play, not all organisations can afford to not think about taking some level of risk. Some might want to wait a week or so after the election before they put their foot down!”
Before a growth strategy is undertaken, it is crucial, although seemingly basic, to know your organisation and if growth is a plausible strategy.
Phil Smith, Vice President and CEO, Cisco UK & Ireland says: "While it might be tempting to think there's a right time for embarking on a business growth strategy, the truth is there's no single correct answer. Every business is different and has been differently affected by the recession. For those that have been fortunate enough to escape relatively unscathed, and are sure they have the time and resources to commit to expansion, there is no reason why now would not be the right time.
“At Cisco, we have been in a position to be able to continue to grow through acquisitions right through the recent downturn. We made multiple acquisitions in the last 24 months, most recently Tandberg and are confident that the growth has put us in an even stronger position in the recovering market. That said, there can definitely be a wrong time to proactively take on new challenges, so it's important not to continue to pursue a strategy that was planned in better times if it is no longer the right thing to do."
Once a thorough SWOT analysis is done and the decision to grow is taken, Martin Balaam, MD, BT Engage IT, believes it is imperative to move as quickly as possible. He says, “Reacting quickly and decisively always gives you the edge on your competition. As soon as you know that any reorganisation by you has been effective you should be setting your growth strategy and as soon as you are able you should implement. A recession is a fantastic opportunity to clean out the low performers and grow your business by exploiting any competitor that either gets into difficulties or is slow reacting to an upturn.”
Mike Eyre, Executive Director, Rurelec plc says, “Whilst in the past there was an ethos of ‘if change is inevitable get there first’ - in the current market it could be prudent to be a close second and take stock of others in your sector. It may slow progress but likely to help avoid costly false starts.”
Although the recession, and talk of it, has left many fatigued, it has also left leaders scrambling to respond to market conditions. This has to end with a return to organic growth.
“PRS for Music has managed to sustain its growth in revenues through the recession, but now needs to tackle some fundamental structural issues to open up further opportunities for the future. Growth cannot be allowed to depend only on market trends – the environment itself must be shaped to enable it,” explains Robert Ashcroft, CEO, PRS for Music.
If you would like further information on today’s topic please look at the Insight pages on the website.
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I hope to see you soon,