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Grow or not grow

Before answering in the affirmative, a good balance sheet is essential!

This is one of the most important questions that any entrepreneur will, one day or another, have to take for his business. In the context of a capitalist economy, the question of growth seems to be trivial. ”  To not grow is to die a little,  ” would we be inclined to think. And yet, some may well be content with stable returns and equally stable market shares, given their entrepreneurial personality, the degree of risk aversion, or the current or anticipated state of resources. and the skills of their organization. The important thing is not the decision as such, but to fully assume the latter!

On the same subject:

Live well growth

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Grow, resolutely!

But if growth remains your primary goal, you will probably have to take a close look at the general environment, the business area in which you operate and your direct competitors. Nothing more normal. However, as Chris Zook states in his article published on the Harvard Business Review website (read “The Greatest Barriers to Growth, According to Executives”), you would also be wise to take a closer look at inside your company, where the most important obstacles to the expected growth of the company lie!

The paradox of growth

At the root of this surprising piece of advice from friends, a phenomenon that is, after all, very natural, to which Chris Zook gave the name of ” paradox of growth “. It will be summarized as follows: the more a company grows, the more it generates complexity internally which, in turn, can potentially hinder, or even challenge, growth. The complexity thus induced may lead to a series of dysfunctions (the author uses the English word ”  distortions “), and this to five specific chapters. It is therefore to these five elements that the entrepreneur must tackle, if he still has the ambition to continue on the path of growth. The latter will therefore pay particular attention to malfunctions relating to:

  • The reaction speed. The advantage provided by the small size of the organization and its circle of decision-makers is undeniable, faced with established companies for ages. What can you do to give back to your organization all the flexibility of yesteryear? “Fewer meetings, but more productive! Suggests Chris Zook. A weekly meeting, preferably on Monday morning, and a follow-up on Tuesday about the decisions made the day before can make the organization regain the speed of reaction lost;
  • Motivation.  The meritocracy remains, says the author of the article cited above, a powerful dynamo in times of growth. But this meritocracy tends to give way to more formal processes of promotion, as the company grows in size. Emphasize meritocracy by identifying clear and simple goals, communicating them appropriately, and sharing the results achieved with the organization as a whole or not;
  • The weather. Albert Einstein and his theory of general relativity owe the knowledge that any mass slows the course of time. The larger the mass, the slower the time. And curiously enough, this scientifically proven fact can sometimes also apply to the world of organizations! In fact, things seem to be going so slowly in big organizations! What can be done to remedy the situation? Meeting management (number of people expected, duration, etc.) is always a good starting point! But Chris Zook also suggests questioning the time spent on the best customers, the best employees and the most urgent challenges, and revising it on the rise;
  • The decisions.  The multiplicity of stakeholders, which goes hand-in-hand with the growth of the organization, can make one lose sight of the most direct path between A and B in the decision-making process. Make a mapping of such a process and see to remove (figuratively!) Unnecessary or redundant interveners in decision making;
  • Information . In an SME context, the manager often knows his clients by name, something that is impossible to repeat as the organization grows. The disconnect between the strategic level, the senior management level, and the operational level is often a sad reality. “Dare to go down on the floor! Chris Zook insists on the leaders. This contact with the reality of employees and that of the market will only increase the quantity and quality of information, essential in the context of growth.

As with any important decision to make, whether of a personal or economic nature, a dive into the heart of one’s personality, motivations, resources, skills, and ways of doing things (or processes , in the case of an organization), is not a luxury. And the growth of the company follows the same principles. Are you ready to do this necessary introspection of your organization?

This article written by François Normandin is courtesy of the Management Review .

 

Source: https://www.reseaum.com/blogue-croitre-ou-ne-pas-croitre

 

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