There’s one important step a company must take to grow faster in today’s marketplace: overcoming the common hurdles of corporate stagnancy. Leaders in some organizations don’t make the time to pursue growth. Other management teams want to grow but can’t because optimizing the current business model and facilitating growth require different skill sets.
Even the companies that have the capacity to sustain growth experience stakeholder resistance. A few years ago, our private equity firm visited a potential acquisition target. The company was 130 years old and had multimillion-dollar profit and revenue numbers before interest, tax, depreciation, and amortization. Everything looked great on paper, and we came away impressed with the company’s leadership. There was just one problem: They didn’t mention growth once during our conversation.
During the last half hour, I asked both the owner and CEO, “Hey, it took 130 years to get to the first $30 million. Do you think we could add another $30 million in revenue in the next five years?” I expected them to say, “Of course! Let’s do it together!” Instead, they looked at me with shock and asked, “Why would we ever want to do that?”
I explained to them what private equity firms do: take an initial investment and try to multiply it by two or three. I predicted that working to get them there would be a fun challenge. They worried that quality, service, and profits would suffer under such rapid growth. Even when I suggested that they could improve those factors in the process, they wouldn’t budge.
Despite the promising nature of the company, we never made an offer. Many leaders may share that particular company’s mentality that growth means sacrificing other values. However, when it comes to driving more profitable businesses, accelerated growth is essential.
The Nature of Rapid Growth
While industry trends historically inform expansion, companies typically grow in one of three ways. First, they ride the industry wave, meaning that when the entire industry grows quickly, companies within that industry tend to grow, too. Second, they take market share from competitors. Finally, they offer new products and services to existing customers and capture share from other companies and industries.
Regardless of industry, a business model that dramatically accelerates growth often hinges on sales. For example, when my company helps other organizations grow, we immediately look for ways to increase the company’s selling capacity. That usually means adding new sales reps, giving them the proper tools to sell efficiently, and creating an incentive structure that rewards growth.
The key is identifying what limits growth before those obstacles hinder new opportunities. While adding salespeople will generate more leads, quotes, and proposals, the company still needs a team there to follow through. Moreover, production capacity must keep pace, as sales teams can’t sell if production numbers dwindle.
How to Start Growing Today
Companies with both the desire and capacity for rapid growth shouldn’t worry about diminished quality. Keep these three strategies in mind if you want to easily transform acceptable revenue into outstanding profits:
1. Pay people a lot when the growth company profits a lot.
When it comes to salespeople, hire slowly and fire quickly. Growing businesses rely on effective sales teams, so individuals who don’t contribute to that growth actively hinder the company’s upward trajectory.
Look for salespeople who can collaborate with other teams to solve problems quickly. In rapidly growing companies, sales team members who can get answers from other departments tend to outperform their more siloed counterparts. Once you find those individuals and once they profitably grow their territories, pay them accordingly. Salespeople thrive on high commissions and bonuses. And though it might be easy to find new salespeople, it’s never easy to find great ones.
2. Insist on growth-minded leadership.
Someone in your C-suite should constantly push the organization forward, a notion commonly referred to as 'intellectual capital.' That drive to maximize efficiency and pursue new opportunities helps companies avoid the complacency that can accompany (and dilute) success.
Seek out partners who share your business goals, and actively challenge others to quickly achieve those goals and more. Don’t sacrifice chemistry to bring in a leader with this mindset, though. Collaborative teams always outperform fractured ones, but do prioritize a growth-oriented attitude when adding to the leadership table.
3. Find your No. 1 way to grow, and pursue it aggressively.
Identify the game changer for your company and industry, then relentlessly pursue that differentiator. This doesn’t necessarily require a complete change to the business model, just a focus on customers’ real needs.
Leaders exist to solve problems and minimize distractions. Remove the red tape from decision-making to empower your teams to follow up on hunches and act decisively. When new industry opportunities arise, the agile companies that seize them first are usually the ones that come out on top.
Rapid growth creates a more challenging and engaging workplace for both leaders and employees. It’s fun to work toward higher revenue and even more fun to see it achieved. Leverage successful salespeople, lean on growth-minded executives, and identify which opportunities to seize in order to propel your company to faster growth.
Companies that want to grow can achieve their dreams while enjoying fast, sustainable expansion. Aren’t you interested in seeing what your company can look like tomorrow?