A company’s growth can stall for many reasons – most of them internal and a few external.
Here are just five internal factors that business owners need to examine anytime their company is considering taking on growth or when growth has been planned, but is just not happening.
5 Reasons Your Company Might Not be Growing
#1: You Don’t Make Projections or Monitor KPIs (or You’re Not Monitoring the Right KPIs)
What gets measured gets managed. You’ve heard this before and it really is that simple.
In fact, it’s why most companies take a step forward in growth without doing anything other than beginning to track financial and operational progress and setting projections for the next month, quarter and year based on the real numbers they are seeing.
But while the mere act of observing your company and seeing the predicted future growth (projections) will change your company, here’s the reality:
Even though making projections and setting and monitoring Key Performance Indicators (KPIs) are business 101 activities (i.e. who doesn’t know you should know your numbers?), MANY growth-focused companies are not doing these things.
If you’re one of them, you need to start now. It’s priority number one in un-stalling growth.
If your company is already tracking its numbers well, but growth is sluggish at best, it may be that you haven’t selected the right KPIs.
There are lists of standard KPIs that are important for most businesses to measure, but there may be one or more metrics that are actually more important to your company’s success.
Click here for 8 of the most valuable KPIs companies can measure.
#2: Your Company is Antiquated
I’ve said it hundreds of times:
The same resources that got your company to its initial success
will not be the same resources that take it to the next level.
This means you have to make changes in your company’s processes, people and systems every single time you want to make a significant leap in growth.
Equally, you need to take this action immediately following the adoption of the specific strategy you’ll use – rather than while you’re still selecting from several growth options. Otherwise, you may make changes that don’t support your company achieving the next level at all.
P.S. See my article, Are You Set to Scale? Why Efficient Operations are a Must During Rapid Growth for 12 crucial, yet simple strategies for getting your processes, people and systems ready to make a significant leap in growth.
#3: You’re Sitting on Additional Profitability, but Don’t Know It
There is growth that occurs because of strategic moves a company makes, but there’s also growth that occurs by optimizing and maximizing the current plan.
Often, companies that engage me as their Growth Advisor come to the first meeting talking about their options for increasing success, but when we look closely at the numbers, it’s clear that any number of major to minor internal issues are holding profits hostage (e.g. products and services, markets, vision, etc.).
Before devising your new next-level growth strategy, make sure that your current growth strategy is being adequately executed … which brings us to the next reason your company might not be growing.
#4: You have a Vision, but Not a Plan OR You have a Plan, but Not a Vision
There is a nuanced and complicated relationship between vision (what’s needed for designing a growth-focused strategic move) and planning (what’s needed for executing that strategic move). If that relationship is not strictly managed, it can easily stall a company’s profitability.
The primary issue is that the skill set required for developing a vision is not at all the same skill set required to execute well.
Make sure yourself and your company’s leadership team have the right skills and that you’re applying them at the right time.
Otherwise, you’ll always be dreaming about where your company will go and not making any progress toward that destination or, possibly worse, you’ll be making all kinds of progress towards all the wrong places.
#5: You are Still “Hands On” at Every Level of Your Org Chart
While the last of the five reasons why your company might not be growing may seem obvious, it is such a ubiquitous scenario that someone visiting earth for the first time might think that delegating has somehow been outlawed.
Remember, you’ll always need different resources to achieve your company’s next significant leap in growth – and this includes different roles and skills for you, the owner.
Both CEOs of new companies and those of proven companies, have only two choices:
- Work only on your business the vast majority of the time, and be very particular about what is a good use of your time.
- Work in your business and bring on a CEO (part or full time).
Whichever you choose, delegation is necessary and you will have to make many related decisions that will directly impact your company’s growth and future success.
If you can’t get your head and hands out of the day-to-day at all, you’ve made your choice by either default or because of your passion for “the work.” In that case, the new CEO will be making these decisions for you – so if you go this route, of course, choose your replacement carefully.
P.S. As the founder, the decision to remove yourself from the role of CEO is monumental – and, as we all know, sometimes a Board of Directors makes the decision for the founder. What we as business owners typically don’t consider is making this choice anytime other than during our company’s infancy or as we are getting ready to exit. Asking yourself the question, “Should I be the CEO of my company or not?” throughout your company’s lifecycle (and especially during growth moves) is a great way to nurture the objective perspective required for making smart strategic decisions generally.
How ready is your company for significant growth?
Find out by downloading Time to Scale, our simple