When a company struggles to achieve rapid growth, it’s rarely down to a lack of market opportunity. Rather, the barriers are much closer to home and in the form of weak leadership, organisational culture or defunct systems and processes.
In Criticaleye's recent poll, CEOs and senior executives identified the main inhibitor of growth as a lack of leadership capability. The upside to this is that a few well-judged changes can make a huge difference to an organisation’s performance.
We asked a range of business leaders to share the decisions they’ve taken to enable fast growth. This is what they had to say:
Unlock the Talent in Your Business
When Gary Favell joined Bathstore as CEO in 2012, he quickly realised he needed to bring different skills into the business.
“We removed all of the board bar one, who is now in a different role, and in the first year we had to change more than 50 per cent of the workforce, so it was an active year,” he says. “We removed the senior team pretty quickly so there was no push back. The talent within the organisation at the next level were pleased to see clear direction and they saw the speed of action as encouraging.”
Gary identified people further down the organisation who could help him achieve his goals. “There is always talent in a company, but it’s brimming in a pot somewhere and you need to take the lid off. If you go several layers down you tend to find some superstars pretty quickly,” he comments.
A similar point is made by Jim Macdonald, CEO of Calvin Capital. “One of the biggest barriers is making sure you have people for the endgame, not just people for the next year. At times you need to bring in new individuals to create that, but you’ll be surprised how capable the people already in your business are,” he says.
For Jim, “belief [in the] strategy is number one; you have to make sure your people believe the ambitions of the company are achievable”.
If employees feel they have the freedom to make and develop decisions, they shouldn’t fall back into legacy behaviours.
Look to the Future
Increasingly, senior leaders realise they need to think longer term as the current strategic template for success can swiftly be rendered obsolete.
That means backing new ideas and innovation. Joanne Thompson, CEO of software development company Penrillian, says: “Because technology changes so fast, if you target a safe incremental growth curve you’re already going to have missed the market – you have to be looking well ahead of that. That’s where really good market analysis and creative product development are key.”
From Joanne’s perspective, the success of the company lies in creating a culture in which staff are focussed on creating a new frontier. “As long as you continue to innovate and create an environment in which people feel secure enough to contribute their ideas, you’re able to have ongoing rapid growth,” she comments.
Expand into New Markets
Growth through international expansion can completely transform a business, either for better or worse. Real care has to be taken when selecting a country and deciding the best route to market, together with how much of the CEO and senior leadership team’s time it will take up.
Jay Patel, CEO of mobile engagement solutions company IMImobile, comments: “For us it’s always been about finding the right people in the right territory. It’s very difficult as judging people across cultures is not easy. For example, I’ve been involved in a lot of companies that have tried to move to the US and they’ve struggled to hire the right individual the first time, perhaps because people in the US are better at selling themselves.”
There are also challenges in financing a new venture. Darren Hart, Head of Growth Capital at Santander, says: “It is important to reflect carefully on the model you are going to have. Will it be franchising? Are you going to be on the ground? Is it an export model and do you run imports alongside that?”
In a lot of instances, there’s the upfront cost of international expansion and the additional challenge of working capital cycles being more protracted. Darren says: “Banks ought to be set up to support such challenges through a range of products, whether that’s import loans, letters of credit, invoice discounting, supplier finance or even growth capital loans.
“For me, internationalisation is about preparation and management bandwidth. The other crucial point to recognise is the need to invest in the finance team, as well as the sales team.”
Take a Step Back
Perhaps one of the biggest barriers to growth is immersion. It’s difficult for a CEO and senior executives to remove themselves from operational responsibilities and the relentless push to hit numbers.
James Boot, Senior Relationship Manager at Criticaleye, says: “If a CEO and their senior leadership team are to establish a clear picture of a business and how its performance can be improved, it’s vital that they step out of the day-to-day.
“Although finding that time is arguably one of the biggest challenges for senior executives, they need to if they’re going to constructively challenge one another and drive the strategy. All too often, leaders are consumed by short-term goals and that’s one of the reasons why they repeat the same mistakes.”
Iain Ferguson, Chairman at information management provider EDM Group, says: “I always carve out specific time, on a regular and frequent basis, to talk about the business away from the operational and day-to-day discussions and to tick off key issues. [This could] be people, skills gaps or simple questions like: ‘We know where we are today, we think we have clarity on where we are going to be in three years’ time – have we got the right people and other resources in place to do that?’”
For Iain, the business plan is vital but it has to be continually reviewed and reflected on. “It’s wise to step back from the business and ask the questions in a different environment, otherwise it can become myopic; you’re so close to following the route map that you’re not questioning your destination anymore.”