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Growth achievement can be a frustrating experience for companies. It is often a long game which is even more frustrating for entrepreneurs or executives with high expectations, aggressive quarterly or annual performance objectives or little patience. Growth plans are established, either formal or informal, action plans are unleashed accordingly, time has passed and results are not reflecting success. The unavoidable question is “Now what?”.

You may feel like you are travelling down gravel roads after a heavy rainstorm, you are part way to your destination but not sure if you should endeavour to turn back or keep going. Turning around in the muck has some risks and the work around route may have its own issues, but at least you know how bad the road was on the way to get here. Carrying on further may be the shortest path forward but the muddy slippery road may get worse, take you much longer or leave you completely stuck or in the ditch…or perhaps the road may get better soon. There is never a perfect solution, such as an airlift from a helicopter to a spot out of the muck…you have to make a decision either way.

Basic alternative decision paths from here for companies stuck in a muddy road to growth range from do nothing, scrap the growth plan, try harder, tweak the plan or develop a new plan. I like to include a further hybrid alternative for consideration, if a company believes from evidence and experience that it is headed generally in a good direction for growth. Recalibration or refocusing your growth plan on a narrower sweet spot might get you out of a mucky growth situation. Sometimes businesses try to take on too much at one time and perhaps lose the focus on the few very best specific growth opportunities with the biggest bang for the buck. The shotgun approach works in some situations, but not all. Narrowing your focus to the growth opportunities at the centre of the sweet spot may allow you to keep some momentum from your past efforts and find some near term wins with low hanging fruit.

How can one scope in on the sweet spot for growth? I suggest the small target lies somewhere near the heart of the answers to 5 key questions:

Which are my most profitable:
- Customers?
- Products?
- Services?
What are my highest growth markets with scale and positive trends?
What are my most significant compelling competitive advantages?
Where are my internal capabilities and capacity the strongest or largest?
What are my manageable risks and tolerances?

If the intersection point of the answers to these key questions provides a “sweet spot” for growth for your business that is large, broad, deep, easily accessible and right in your wheelhouse….lucky you! I believe the intersection point represents an aggregation of your company’s greatest “gifts”, strengths and opportunity. There are no bad gifts, only unused gifts.

Finding answers to these or similar questions may have been the objective of the strategic or growth plan that led to where you are at now. However, planning processes can by definition be broad and optimistic. With good intentions, strategies and action plans can become volumous and lead to dilution of focus and effort on the very best growth opportunities. For example, it is not uncommon for a growth strategy to involve action plans to launch a new product (expected to be highly profitable) with a sales team yet to be hired in a new undeveloped international market for the company. Not saying that this is a bad strategy, but it may not be in the sweet spot that might build early momentum for a growth strategy. Planning processes by definition need to have balance between short and long term as well as risk.

Business and growth can be challenging…sometimes customers and markets change, competitive advantage can be fleeting, and your best people walk out the door every night. Financing considerations can change rapidly. Focusing on the sweet spot helps keep you from getting distracted by the bigger picture which can be very daunting. There is sometimes comfort in smaller spaces. Efforts in smaller focused spaces can often be more purposeful and easier to manage and measure results. To pursue the sweet spot, you first need to know what and where it is. The alternatives may not always be obvious. Finding the best alternatives often need critical analysis. Don’t be afraid to ask for help.

As a related topic, some companies get stagnated growth because they struggle to expand their sweet spot. You usually can’t just expand the sweet spot by increasing only one of the overlapping circles in the diagram above. You can’t grow effectively or sustainably by increasing/strengthening your internal capacity if there are no legitimate high growth markets to exploit. Neither can you grow effectively by improving your competitive advantage for products, services or customers which provide you low profitability. You often need to look at the overlapping circle which is most constraining to expanding your sweet spot and deal with that as a priority. You may need to improve the dynamics of multiple dimensions in order to effectively grow.

Growth tends to focus on strengths of a company. Growth strategies generally are not well invested if they simply shore up weaknesses or mitigate risks. Business Development or departments in companies responsible for growth by definition tend to focus for good reason on attacking versus defending. Companies don't generally grow by trying to be someone else but by becoming a better vision of themselves.

I have no idea if there any tangible answers for you in this dialogue. However, sometimes it is just good game tactics to evaluate your current position from different perspectives before committing to your next move…even if you are already winning the game by a good margin. And even if you are stuck or just sliding around on a mucky road, any possible move from there is a decision with impact…even if you do nothing.

A feature article by Dwayne Coben of Coben Advisory Inc. (www.coben.ca). Coben Advisory is a specialized corporate & executive advisory firm that offers services to help our clients plan, improve, grow and/or exit their businesses.

I often get asked why is growth so important for a business. My response is if you aren't growing, there are only two other scenarios...you are either stagnant / stable or you are shrinking. What's wrong with stable? It’s okay for a time but long term stable often means you should take a more clinical examination of your business. You may be missing out on opportunities, enabling your competitors or future competitors to score on a breakaway, luring your employees into boredom or lacklustre performance, lacking excitement for customers, or leaving money on the table. So what can be done in these circumstances? Various choices are available. Doing nothing or ignoring the issue is always an alternative but it generally leaves you in fog without a clear path forward.

I often see companies that understand the need for growth decide that they will just “try harder” at the current marketing and sales activity. Sometimes that may work. Sometimes not so well. As a farm kid, trying harder might relate to pushing the combine to go faster causing a greater swath to run thru the pickup....if you don't have the capacity to process the extra load, you either plug the combine up or cause some mechanical breakdown....something has to give. Another issue with simply leveraging off what has worked in the past without re-evaluating is that you may be doing more of a suboptimal activity, missing the mark or pursuing less profitable business. If you wish to invest in growth, you might as well get it right.

The answers are usually in the details. Some of the details may be a bit foggy as your information and data at hand may not be ideal and the future is uncertain. However, digging into the details is usually where sound planning and growth strategies begin. There will always be some fog remaining. However, I have always found that the overall picture emerges if you make the effort and more effective decisions can be made that will provide better peace of mind for managers, executives and owners.

There are many ways to look at growth, but I find one of the most effective ways is to start with a detailed assessment of a company's current products and services. I often describe a reasonable process for assessing growth opportunities and strategy with reference to a Rubik’s Cube. A company’s business can generally be broken down into a number of dimensions – customers, products, services, markets, risks, competitive strengths, trends, internal capability, to name a few. Each of these dimensions form a different cut of your business (like one block of the many blocks in a Rubik’s Cube). All other things being equal, you will want to focus your growth investment in a strategic manner, with specific emphasis on your most profitable customers, products and services in the highest growth markets that are large enough with positive trends, where you have competitive advantage, strong internal capability, manageable risk and your greatest chance of success.

That all sounds pretty simple when you say it real fast. It usually is not so simple to evaluate in reality. It is not uncommon for many companies (even large sophisticated companies) to be challenged to break down their history and their predictions for the future into such dimensions to provide a reasonably clear comparative view of the different parts of their business. Historic performance is sometimes less important that forward projections, although it is most often a useful guide. Many if not most companies pay most attention to measures of ongoing performance in terms of corporate performance (e.g. net income at a total level), as that is how their financial reporting systems are structured and the relevant data for a more clinical examination is simply not tracked into neat little buckets over time. Analysis at a total corporate or consolidated level is usually not granular enough to develop effective growth plans from.

Unfortunately, many managers or owners stop there and resort to what I call “thumbnail growth planning”. This type of planning typically takes the aggregate financial data and marries it up with anecdotal and formal future-oriented data and predictions from available sources to complete a best-efforts growth plan. There is nothing inherently wrong with this approach. It just might not provide the best solutions, when compared with the answers that may pop out if one dug a little deeper in the analysis and stretched the evaluators to complete the allocations, assumptions and estimates to get more specific in the conclusions regarding where and how best to achieve growth.

Some relatively simple example questions might help you understand if your current growth plans are reasonable and sustainable:

Do I know which are my most profitable products or services?
Can I characterize the depth and breadth of potential growth opportunities across business lines or other dimensions of the company?
Am I certain which markets or products / services that my company has a significant competitive advantage?
Which specific customers, groups of customers and markets should I focus on for growth?
Which parts of my business do I have the internal capability and infrastructure to grow?
How do I measure growth currently and should I be measuring it differently in the future?
What is my best growth option for my business – organic growth, growth by building or expanding, growth by acquisition?

It is never too late to rethink your growth plan. Growth is the essence of your company’s ability to thrive and survive for the long term. It is also a key component to improving the valuation of your business. I encourage you to ensure you develop and document a growth plan, including all the analysis that goes into it, so that you have the ability to be more purposeful and specific in continually improving it over time.

Stuck in the Mud on the Road to Growth?

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