This article is written by Dr. Alison Eyring
Growing the business - and sustaining that growth - has always been important to business leaders. After a couple of years tightening their belts and driving cost out of the system, leaders are again focusing more on growth. Achieving sustainable growth starts with good business strategies.
But, perhaps more important - and certainly more difficult - is to ensure people and organization capabilities that support the execution of these strategies and sustain the momentum. Following are ways leaders can build capabilities to sustain growth in their business.
Ensure human capability for business growth. When a business is growing rapidly, jobs are evolving and expanding quickly in terms of size and complexity. If managers are stretched to maximum capability, it may be difficult for them to grow their part of the business. When considering job candidates, consider whether the person could manage a business 20-40% larger than its current size within a desired timeframe. You may need to "overhire" when filling hi-growth roles. Identify people earlier in their career who have potential to manage larger chunks of the business. Give them challenging assignments with feedback. This builds a pool of managers who will grow your business. If your managers have spent their careers in a low growth or regulated environment, you may lack the potential your business needs.
Build a growth-oriented culture. Employees take on a mindset for growing the business when they can see what it will look like when executed. Sometimes the word "growth" can be confusing. Is your intent to grow sales volume? Acquire new businesses? What about total margin growth? To create a growth-oriented culture, everyone must understand what "growth" means. However, one-way communications are seldom enough. Find creative ways to help people understand and desire a future vision of growth. For example, over the past decade, we've created a number of learning board games used by our clients to build knowledge of business strategies and growth priorities. These are a fun and also effective way to build shared understanding and a culture that enables growth.
Help managers cope with more complex decisions. Achieving sustainable growth is more difficult than driving growth in ales volumes or market share. But these approaches to growth a deeply ingrained and often come with bad habits like discounting to drive sales volume and "buy" market share. To execute a strategy of sustainable growth, managers need better information about how profits are determined -- and which customers or products are profitable. This also requires more complex decision making. Don't expect sustainable growth without a change in behavior and ways of thinking.
Use business measures more effectively. The use of measurement to drive strategy execution in Asia is complex. Employees are often uncomfortable with the explicit feedback such measures provide. Also, the tendency to place blame can create unproductive behavior. Introduce the use of business measurement slowly and begin by educating managers about how to use it to drive strategy execution. We encourage our clients to implement strategic measures over a multi-year timeframe. Linking the measures to rewards too soon will surely derail the effort.
Avoid boom-splat growth cycles. Too often, companies downsize and then set stretch growth targets. Next they rush to fill positions only to discover their growth is slowed by inadequate skills. Achieving sustainable growth requires you to learn from leading indicators. For example, if your current orders suggest that you have too many sales people, determine root causes and address these before simply reducing headcount. Volunteer separations and cross-the-board reductions can reduce growth capability by taking out strong performers.
Leaders who believe that great strategies are enough or expect the same old capabilities to deliver on new growth strategies will be disappointed. Growth leaders who place more attention on executing their growth strategies and building capabilities to sustain these will reap the rewards of high-performance.
© 2010 Organisation Solutions Pte Ltd.
About the Author: Dr. Alison Eyring is the founder and president of Organisation Solutions, a global consultancy specialising in organisational design, development and change solutions worldwide. Alison has more than 20 years of experience in the field of Organisational Development and her areas of expertise lie in large-scale organisation design and change, leadership development, and the design and management of distributed organisations.