Most business owners want to grow their companies.
However, no matter how sincere they are, only some will achieve the desired growth. The others will continue to talk about their desire to grow but it won’t translate into action. So what’s the difference?
There are many reasons companies achieve or don’t achieve growth. But there is only one underlying requirement that forms the foundation for the companies that do achieve growth — their leaders understand that growth must be cultivated.
Cultivating growth requires that leaders have a clear vision, confidence in their ability to reach that vision and the willingness to invest in the resources necessary to enable them to utilize their abilities. Clear vision establishes the growth target and point of focus for all of the organization’s resources. Growers commit to that vision and are passionate about achieving it. They understand that investing in long-term growth possibilities may reduce short-term profitability.
The stagnators have a different perspective. Their concerns are focused on “what if” scenarios. They ask, “What if the investment in resources doesn’t pay off?” rather than balancing the risk with the prospective reward. Stagnators are focused only on today’s profitability and are unwilling to take calculated risks.
Short-term profits important, and it would be impossible to maintain your business without them. But if a company is committed to growth, management must be willing to invest some of those short-term profits into the resources necessary to achieve long-range growth.
Uncontrolled and undisciplined investment of current profits into growth-related resources doesn’t benefit anyone. It’s important to maintain a strategic growth focus. It’s not that the stagnators don’t want to grow; it may simply be that they say it before they know what specific plans they’d be committing to finance growth.
If business owners and managers really understood what commitment and investment was required, maybe fewer would say they want to grow their businesses. Then, they could adjust their vision to better reflect their own reality. Joel Strom ([email protected]) is director of Joel Strom Associates, LLC, the growth management practice of C&P Advisors LLC. The firm works exclusively with closely held businesses and their ownership, helping them set and achieve growth objectives while maximizing their profitability and value. Reach him at (216) 831-2663.