Generating rapid growth in a business entails a constant choice that simply must be made, but is usually missed.
It is the choice between ‘growth’ and ‘optimisation’.
They require different skills, strategies, and resources.
Let me explain.
‘Growth’ implies something less than a double digit year on year increase. While that may stretch resources, it is often ‘Doable’, while very challenging. ‘Rapid growth’ is much harder, requiring the acquisition of many new customers, assets, movement into new markets, product or geographic areas, and a higher risk profile. It is often aspired to, even budgeted, but is relatively rare.
‘Rapid growth’ is also usually very scrappy, you are fixing things on the run, adding resources, are short of cash, and so it requires people comfortable with ambiguity, uncertainty, and a drive to do new stuff.
By contrast, optimisation is taking what is currently done, and improving it, bit by bit, on a continuous basis. The scrappy, seemingly undisciplined and almost random frenetic activity of a rapid growth enterprise makes them uncomfortable.
Think about Olivetti, the king of the typewriter market.
They made wonderful typewriters, best in the business, optimised continuously for 75 years. Into this mix comes a scrappy unreliable substitute, the word processor and attached printer, that costs more than an Olivetti, and does not deliver the same quality of output.
To Olivetti management, it was less than a threat, more of a nuisance, that would soon go away, so they continued to optimise their machines, rather than recognising that the scrappy, word processor would rapidly steal not only their market, which was typing pools, but destroy them, and create new ones. The word processor was an entirely different tool, one that gave everyone the ability to type and print from their desk, a much quicker, more flexible, and hugely democratising change in organisational life. Olivetti was obsessed with their machine, not seeing the customers as anything more than users. Word processors gave everyone a power that had been concentrated in the executive suite, creating a terminal strategic change that Olivetti failed to see.
Is your strategy clearly making the distinction between optimisation and growth, as they are different beasts, requiring different capabilities.
Header photo courtesy Paolo Bpnassin via Flikr
