Understanding business growth
There’s more to business growth than chasing revenue figures. Joint CEO of The Creative Counsel, Gil Oved, gave us the low down.
What does business growth mean exactly?
There are many ways to view growth. For one, it’s not about growing turnover but rather growing what’s left over. Don’t always chase the revenue if the profit won’t go up commensurately. Revenue is ego, but profit goes straight to the heart. However, growth should not always be just about the numbers. In today’s times where unemployment is such a pressing concern in the world and all the more so in our country, good growth means creating good employment opportunities and growth for your staff through mentorship, guidance and leadership. Ultimately though, growth is about owning your “micro-economy” that builds true wealth and creates longevity in your business.
How do you tell when it’s time for your company to grow?
It’s always time for your company to grow! It’s a mindset. It’s what you carry with you every second of every day as a businessman. That’s not to say you shouldn’t be prudent or analytical and even cautious at times. Sometimes, taking one step backward is healthy, but only if it’s with the aim of taking three steps forward.
How do you decide on the growth path you should take?
Doing good business is finding the golden mean between analysis and insights on the one hand, and going with your intuition and gut on the other. When gut and intuition meet with deep analysis, we call it the “sweet spot”; that’s when you know it’s the path you should follow. The converse presents itself in two forms, both are equally misguided: one is the risk of sales pitching yourself and seeing what you want to see even if the analysis doesn’t really say it, and the other is analysis paralysis where gut is shunned and berated.
How is growth usually measured? Is it in terms of revenues or profits?
Growth means different things at different stages of your business and of the economic cycle. The worst thing you could do is only focus on the numbers. Long-term businesses that consider sustainability as a key objective will often forsake profits for market share, expansion, culling competitors, and building suppliers’ networks. In fact, the list is endless. Growth should always be measured against the company’s vision and long-term objectives. The other factor to always consider is that growth should favourably consider social challenges relating to people and job creation.
What challenges should you be prepared to face when growing your business?
Prepare to face as many challenges as you can list. And expect to face many more that you could never have dreamed of occurring. If your mindset accepts that truth upfront, it will make the growing pains easier to handle. There are just too many variables that are out of your control for you to be able to anticipate them all. One has to be nimble, vigilant and creative with problem solving. However, the basics really are always about the people. Getting and keeping the right people motivated in times of growth and change means a better trajectory for growth with higher probability of success.
How do you ensure that your staff buys into the growth vision of the company?
You do this through three things: communication, communication, and communication. Good leaders communicate often. Communication is a dialogue; not a list of commands. Listen to your staff, keep it an ongoing loop and be open to tweak and manouevre plans based on feedback from them, and feedback to them. That way, they feel a part of the vision and responsible and proud of the growth. Growth usually means more effort. More effort only comes willingly if all eyes are on the same prize.
What advice would you offer entrepreneurs who want to grow their businesses?
Don’t chase after every opportunity. Entrepreneurs often feel like they’re drowning in a sea of opportunity. The problem with drowning is that the result is death. Be discerning. Get involved in opportunities that will substantially grow your business; ensure it will actually move the dial at the end of the day. It takes as much time, effort and energy to do small deals as it does big deals. And often a bigger deal, ironically, means less risk because you’re dealing with more mature and more serious people. Do fewer deals that are more impactful. Don’t grow for the sake of growing. Be lucid about where you want your business to grow and what your vision is for the end point. Be clear about how you plan to monetise the opportunity before you pursue it. Often entrepreneurs do the deal first and then try to work out how they’ll make it work for them. It sounds so counterintuitive and yet, so many fall prey to it. Don’t be scared to walk away from something. Even if you’ve spent a lot time and effort working on it. Sometimes saying “no” at the altar is better than asking for a divorce a few months or years later. Keep your eyes open. Be open to redefining yourself, but ensure you know what your core competency is. You can do the one without losing the other. Nokia was a paper manufacturer, once upon a time. Anything is possible.
To read the full version of this article go to page 82 of the July-August 2013 issue of DESTINY MAN