How to Grow Your Business by Clearing the Way to Growth
Is your business growing as fast and effectively as it could, or is it stuck at the same level it has been at for years? Research (Larry Greiner, 1972) has discovered 5 specific stages of business growth. Most business never grow beyond the second level. At this level, the business is characterised by a small group of owners (if not a sole owner), supported by a small team of people at an operational level. This describes the 90 plus percent of businesses, which have 10 or fewer staff.
Why should it be this way? The Greiner growth model describes 5 levels of growth that are characterised by the type of organisational structure and leadership style at each stage. The model describes a very obvious and practical problem that is evident in all businesses that grow over time. Growth is never simply a smooth transition from small to large. It occurs in a series of jumps from one level to the next. Growth at each level is limited by the structure and leadership style. A business can grow at each level to a certain extent, but after a while, the activity created by growth makes the structure at that level unwieldy and inefficient, limiting the growth, until the next evolution of the business occurs to solve the inefficiencies at the previous level.
The issue is not that these growth crises occur, but that there is a clear solution to these crises which few businesses take the time to discover. I am sure there are some business owners who want to keep their business small for lifestyle reasons, but I am also sure that if most business owners could find a way to grow their business beyond the current level, they would.
Most businesses that are stuck at the level where the owner(s) work in the business full time (or more) and there are a handful of employees, don't do what it takes to overcome the growth crises that are created at the limit of growth at that level. These crises are evident in the issues of control, where the business is dependent on the skills and input of the owners for most of the results and the owners can spend little time away from the business because performance will suffer in their absence. When work increases, the informality of communication and organisation become a liability resulting in errors, delays, poor quality and unsatisfactory service. Costs blow out and profits shrink rather than grow with increased sales volumes. Many owners conclude that it was easier and more profitable running a smaller business and revert to a scaled down operation. Unfortunately, this means the business and the owners never achieve their full potential and end up living a life far below the level that could have been accomplished.
Rather than scale down, the business could continue growing by scaling up. The solution to the growth crisis at this level is very clear and the path to growth is well established by the successful ones who have taken the leap to the next level. The answer is to re-organise the business with the owners delegating more responsibility to the operator level, appointing managers to take responsibility for certain functions, combined with developing systems to assist in maintaining control.
Many businesses increase the problems at this stage when they only increase delegation without increasing control. This is the key to smooth transition through this level. Control tools provide the information to management to ensure the business performs efficiently and profitably, with adequate cash flow. This development is often beyond the skills and experience of business owners who have come from a technical background and have never had training in finance and management areas. It is wise for owners at this stage to seek professional assistance in creating and establishing effective operating systems and control measures. As the business grows, the need for greater professionalism grows as well. Owners are wise to commit to a self education program so that they develop the knowledge and skills to run a business at higher levels.
At the higher levels of growth, the crises are more evident in the leadership areas. With growth, the need for increased management and organisation grows proportionately. Sometimes businesses need to be restructured along functional lines, or sometimes organisation is more determined by geographic elements. Whatever the case, the need for strong leadership and communication with management levels about performance issues, motivation of personnel and strategic elements of the business are of greater concern than the technical issues were at lower levels. Business owners need to develop their own leadership skills as well as develop or employ highly skilled managers.
If you are frustrated that your business has the potential to grow, but can't find the way through the current hurdles you are facing, which create increased stress, over work and performance issues, perhaps it is time you looked at changing the structure of your business and becoming more professional about how you manage it. Unless you make the changes, your business will be forever held back. You will not be capable of further growth until you re-create your business to perform efficiently at the next level. You may be held back because your current situation makes you too busy working in the business that you don't have time to work on it, to develop new systems and controls. It is time to bite the bullet. Unless you free yourself to work on reinventing your business to clear the way for growth, you will continue to bounce up against that invisible ceiling you keep hitting, without ever being able to break through.
(c) 2005 Greg Roworth, Progressive Business Solutions Limited
Greg Roworth is the Managing Director of Progressive Business Solutions Limited, a business development consultancy firm with branches in Wellington and Auckland, New Zealand. Greg has created a unique business development program that assists business owners transform their business from a state of total dependency on them to a state where the business works so well they don't have to.
Greg is also the author of "The 7 Keys to Unlock Your Business Profit Potential," which descibes the fundamental keys a business needs to achieve this transformation. Find out more, get 2 free chapters, or buy the book online at small-business-success.ws
Attributes of Companies You Dont Want to Buy!
There are no "rules of thumb" in the pursuit of companies to buy. Each purchase opportunity has to stand on its own merits.
Breaking the Growth Barriers in the Information Technology and Software Sector
There's nothing automatic about corporate growth, particularly in the information technology industry; build it and they will come is a myth. In the real world there is either a structured, process-driven growth cycle, or stagnation-and stagnation is automatic.
The Top Ten Rules of Effective Networking
Many of us are discouraged by the networking events that we go to. We feel swamped by people just looking to get money from us, and we rarely feel as though the event was worth our time.
How To Leverage Your Current Ideas And Products Into Multiple Revenue Streams
Diversify - to make diverse, give variety, to balance, to divide securities in different industries, to produce variety, to engage in varied operations.Diversification is a wealth building strategy; it is also an excellent method for becoming more profitable.
Have You Identified the Enemy?
One of the most powerful driving forces in human nature is competition. The desire to overcome something or some company, the need to win, the cause, can in many cases be more important than the day-to-day work of the company.
Urban Flight in Ohio
Many of Ohio's downtown areas are in need of upgrading as folks pack up and move to the suburbs. Many downtown revitalization projects are currently going on there.
Business Plan Financial Projections: Stop Worrying About Being Right...
Business plan financial projections seem daunting because they are so uncertain. This very uncertainty, however, is what makes preparing them easy because you can't possibly be right.
Call in the SWOT Team: Produce More Opportunities to Expand Your Business
Have you ever done a SWOT analysis? No, it's not some dangerous military maneuver. It's actually a fun and incredibly helpful business development exercise that will give your company focused direction and great marketing ideas -- whether your business is brand new or has been around for years.
The Six Sigma Method and Design of Experiments
Six Sigma is becoming a proven approach for businesses and organizations to improve their performance. The spectrum of companies actively engaging in Six Sigma today is wide from industrials like Celanese, Caterpillar, GE, Honeywell, and 3M to service/retail organizations like Starwood Hotels, Sears, and Home Depot.
Strategic Planning Consulting
Strategic planning and consulting is the strategy roadmap to manage business very effectively. To improve the performance in each business level, business strategic planning & consulting is essential.
Vendor Relations Strategies Sample Outline
One of the quintessential parts to any business is your supply chain. To insure that the supplies are there when you need them; in this new day and age of "just in time" distribution where very little sits on warehouse shelves until you order it you will need excellent vendor relations.
Take A Systems View To Ensure Your Business Stays Healthy
How are you feeling today? Good, not so good, great? Let me ask the same question in a different way: How is your gastro-intestinal system functioning today? What about your lymphatic system? How's the old circulatory system flowing along? Are all your bodily systems aligned, in sync, and cranking at peak performance?In order to get everything done perfectly and on time, your body must use many systems that effectively work side by side. Just as it is important to take a systems view when it comes to your body's health and well-being, it is equally important that you have a clear understanding of your business and its organizational systems.
Strategic Planning and Total Quality Management
No matter what product or service you provide you will have to face this issue of quality and systems. Whether it is distribution of services or streamlining of processes in manufacturing your product; you will need to address the issues of total quality management.
The Tables Have Turned - Its Officially a Sellers Market
Private equity firms have raised so much capital over the last 12 months that they are vigorously competing with one another for opportunities to put their money to work. Business owners, who previously would have had to go hat-in-hand to investors, instead find themselves inundated with unsolicited offers for their companies.
Balanced Scorecard Strategy Map
With the help of balanced scorecard strategy map, it is very easy to design the organization goals and build business strategies. Balance scorecard and strategy map are interrelated with each other.
How To Prepare A Business Plan That Guarantees Big Profits
It is always said "If you Fail to Plan, you Plan to Fail" Success in business comes as a result of planning. You have to have a detailed, written plan that shows what the ultimate goal is, the reason for the goal, and each milestone that must be passed in order to reach your goal.
Regroup - How To Do It And Why It Works
Regroup?is this a new management trend? Not a chance! Regroup is simply an opportunity to end one month's business cycle, recap the performance of your company and outline a plan of success for the new upcoming month. Why does it work? Because it allows each person on your team to assess their performance from the previous month, and make any necessary adjustments for the new month.
Business Plan: The Simplest Business Plan Ever
If you're a solo professional like I am, you know how tough it is to find any time at all to do any business planning. Doing a full business plan is a must if you're planning to seek financing or investors, but most solo professionals don't need anything that complicated.
Are You Aware of Planning in Business?
Human beings are rational agents. Rationality endorses one to take up planning in every sphere of life from shifting to a new house to marriage, as well as business.
The Impact of Price Popularity on Profits
The goal of almost every business owner is to generate a profit either for themselves or their shareholders. This can be challenging at best.
|home | site map|