Wednesday, May 10, 2006

Four Barriers to Your Next Growth Spurt

I was recently working with a client company which is getting ready for its next big growth spurt. Everything’s in place: cool new product, good people, a clear strategic plan, and a solid financial structure. We should all have such problems!

But there are always problems, aren’t there? In fact, the senior managers and I came up with four potential pitfalls to their growth spurt, even if everything else seems to be peachy keen. Seems to me that any company ought to seriously consider these potential pitfalls, so here they are:

1. Pitfall: Leaders and employees pay more attention to “the organization” than “the business.” In other words, they focus primarily on internal issues (processes, job descriptions, turf, politics) and wind up spending less time on external issues like customers, new technologies, competitors, market trends, and fleeting opportunities.
Solution: Pay attention to the internal stuff, but concentrate on external issues that lead to sustained growth.

2. Pitfall: Strategy becomes equivalent to meeting targets. Targets are the goals, the basis of the final scorecard. They say nothing about the kinds of decisions and behaviors that leaders must do to get there. When the ends are clear but the means are “anything goes” or “the ends justify the means”, then there’s an open invitation to confusion, inefficiencies and corruption.
Solution: Develop a coherent strategy and values set that clearly define the broad parameters of what the firm will do, and how, to reach those targets.

3. Pitfall: Strategy becomes “even more” of the same. It’s seductive to assume that growth and competitive success will occur if people do more/better of what they’ve always done, or what they’re familiar with. Given the perpetual dislocations in the external marketplace, this assumption is usually wrong.
Solution: Continually challenge sacred cows, innovate and collaborate to help the organization break new ground, become unique, and perpetually evolve in a way that truly matters to the customer.

4. Pitfall: Execution is a low-integrity, high-lip service affair. When the leaders don’t personally get involved in execution, when the talk isn’t walked by everyone, the execution—and hence the strategy itself—becomes flabby, unclear, inconsistent, inefficient, and idiosyncratic rather than institutional.
Solution: Make execution a real priority for everyone: insist on discipline, transparency, and accountability across the board.


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5:33 AM  

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