Growing can be a painful process. Teenagers are perhaps more aware than anyone else about the true meaning of “growing pains,” but they’re not alone. The same idea applies to the corporate world where fast business growth can present a number of challenges.
Overcoming these challenges is the ultimate proof that a particular business model works. At this point, perhaps we should remind ourselves that today’s successful businesses started small. And the path towards global domination was not free of obstacles and issues.
So, what are the main challenges posed by growth? And how can these challenges be tackled?
A small to medium-sized enterprise (SME) deals with two distinct environments: an internal environment (partners, employees, day-to-day operation) and an external environment (what we could generally describe as “the market”).
It’s natural to assume that external factors will pose most challenges. These pressures will then prompt the internal elements to react and overcome these challenges. This situation generates both opportunities and challenges.
Impact of decisions
Entrepreneurs and managers generally associate growth with the right choices and decisions. Having said that, it’s important to stress that every decision has an impact both internally and externally. Taking the “right” decision from an external perspective can generate internal tension. This can also jeopardize growth.
Aligning all factors in order to generate convergence and growth is a big challenge. Growth piles the pressure on existing resources and this, in turn, can generate friction between different departments or employees. It is, therefore, crucial to plan growth and anticipate the challenges ahead.
Failure to do so and prepare accordingly can impact negatively and compromise the future of the company. Some would describe this scenario as a “shot in the foot.”
The quest for survival starts with achieving sustainability. SMEs are part of an environment that is continuously evolving. Markets do not stand still either. Regulation, new business models, and disruptive technologies can change the rules of the game in a short space of time.
And there’s also competition, the quest for efficiency gains and cost reductions, not forgetting ever demanding consumers. These are just some of the challenges facing an upwardly mobile business.
Ready to take on the challenge? To tackle the challenges of super fast growth, here are three things worth considering.
Business growth requires capital and investment.
The challenge here is not only to achieve a sustainable return but also to maximize the value of the overall business. From a strategic point of view, it’s worth looking beyond organic growth. One possible solution is to seek strategic partners to achieve better operational efficiency and maximize gains in scale.
Strategy and management are key elements of sustainable growth.
A clear strategic view of the short, medium and long-term range provides direction and a reference point for management. Short-termism does not provide a solid foundation to build business success. Corporate governance and good practice will help boost day-to-day management and support long-term decision-making.
You need strong culture, environment, and people.
These three elements are interconnected and have a direct influence on overcoming any “growth pains”. It is important to develop an internal culture that promotes employee engagement. It’s generally accepted that people who feel engaged and motivated in their work are more productive. Leadership plays a fundamental role in this process. A good manager will seek to promote a dynamic environment that is collaborative, meritocratic and that offers employees opportunities for further development.
Survival of the fittest
Survival of any given business depends on developing an effective strategy that not only confirms the viability of the business model (sustainability) but also lays the foundations for its future development.
Markets do not stand still and new players hold the potential for considerable change in a short space of time. Uber and Airbnb are two such examples. Mobile network technology, geo-localization, and smartphone technology converged to provide a new approach to finding a taxi or accommodation when traveling.
This step change opened new markets and posed many challenges to established players.
As a conclusion, “growth pains” will always exist as environments and markets are not static realities. The capacity to face and adapt to these new challenges is what really matters.
It is therefore essential to create a vision for the future that is flexible and provides a sense of purpose and direction. Such vision needs to be supported by tools that are both comprehensive in scope and flexible enough to provide instant results.
What plans do you have in place to achieve fast business growth? Share your stories in the comments below.