Science teaches that whatever does not grow dies. This is usually applied to living organisms but, in reality, the application extends beyond animals and plants to organisations because when a business entity stops growing, it embarks on a trip which first saps it of profit before robbing it of life.
Every company should make yearly growth its focus primarily for the reason that expenses don’t stay stagnant.
Over time, wages and overhead expenses grow and it is not always possible to pass on the increased cost to customers.
So, it is a given that any company, which does not make consistent growth which results in increased revenue its goal, will run into troubled waters. To grow, a company must ensure an increase in its customer base. This is critical because the current customers may die, lose their sources of income or get pissed off with the service provider.
If any of these happens, it results in a reduction in patronage and a decline in the bottom line which may make it extremely difficult for the company to meet its obligations or even stay afloat.
Therefore, the only way a company can perpetuate itself in business is through continued creation of customers. This is achieved through the expansion of its territory.
While Jeffery Bezos was employed as a Vice President at D.E. Shaw & Co, a Wall Street firm, in 1994, he stumbled on a piece of information that the use of internet was growing at 2,300 per cent.
The information hit him like a thunderbolt because he realized that with the right business idea, he could leverage the growth of internet to change the course of history and transform his own life in the process. As he noted later, “things just don’t grow that fast.
It’s highly unusual, and that started me thinking about the kind of business that might make sense in the context of that growth.”
He generated a list of 20 products he thought could be sold on the internet but later narrowed the choice to books “because of their low cost and universal demand.”
Thus began Amazon.com, the first and currently the largest online bookstore in the world. The business which took off in the garage of the 30-year old Bezos hit $20,000 sales per week within 30 days of operation.
Two months after commencement of business, Amazon got orders from every part of the United States as well as 45 other countries. The growth has been phenomenal ever since.
Despite the instant success recorded by Amazon, Bezos never got tired of refining and retuning the business. He expanded its scope to the extent that today, Amazon’s operation is not limited to the sale of books as the company sells virtually anything.
Besides that, the 24-year old business, which is currently worth over $900billion, has leveraged the success of its online bookstore to acquire many other companies.
Amazon’s amazing success is rooted in its seemingly insatiable hunger for growth. Bezos realized that once success was recorded in a line of business others would join and this could affect market share, so he embarked on a continuous expansion of the business to keep it competitive and profitable.
Consequently, despite making occasional bad business decisions, the company continues to advance at an astonishing pace.
Success as failure
Atrophy sets in for any organisation which believes that after achieving a measure of success there is no need to aim any higher. No company must get to a level that it thinks it does not need to get better.
Nothing destroys a company more than lethargy. In the business world, there is no time to slow down. If you choose to take a break after recording a huge success, you will find out that by the time you get back others have made mincemeat of your accomplishment.
Every organisation must realise that opportunity is never lost, it only changes habitation. The opportunity a company does not seize will be snatched by another, the success a company does not record will be achieved by another, and the profit a company does not make will go to another.
In the business world, being on the go is the rule. There is no organisation that is too big to fail. The only antidote to contraction in business is deliberate extension of territory.
Why businesses must have growth mentality
A business must deliberately inculcate in its system the growth mentality for the following reasons:
The customer base that is not grown by design will contract by default
What is in the power of a company to do is to grow its business by expanding its market; it cannot force its current customers to retain their patronage.
So, if a company fails to do that which is within its powers to do, it will be powerless to stop the occurrence of that which is not within its control.
No matter how good a company is in its service delivery or customer service, customers may still decide to try another product; should this happen, it will affect how much sales a company makes.
The only way to mitigate the effect of that is to have new customers that will replace the exiting ones. So, to hold on to its territory, a business must extend its frontiers.
Competition will always go after your customers
One reality no company can wish away is that competition will always make overtures to its customers and some of them may make a switch which will result in a decline in patronage.
A company that keeps losing customers without making any effort to get new ones will head south and may eventually go under.
Since no company can stop another from reaching out to its customers, the only option left is for it to also reach out to new customers so that it can remain in business.
Customer loyalty is unreliable
Variety is the spice of life, so goes a saying. This is what makes customer loyalty undependable. No company can consistently count on a particular customer’s loyalty because the customer reserves the right to deploy his custom as he deems fit.
While no effort should be spared to satisfy current customers, no wise company will build its hope on the patronage of its current customers, it has to create a new customer base to guarantee its continued existence.
Though current customers have a role to play in determining the prosperity and future of a company, the greater role is with customers that are currently not within its fold. A company’s best customer ever is the one who has yet to identify with it.
Old money will disappear
Economies run in cycles and every cycle produces new realities. New realities throw up a new order and the new order will produce a new set of people with influence and affluence.
This will, in effect, deprive some people of their erstwhile resources that positioned them to make certain purchase decisions. A business must identify these and tailor its service provision as well as productive activities to meet the needs of those just coming into influence and affluence.
A business that is not always on the go and willing to extend beyond its known territory will find it a bit difficult to reap the benefit of a new order.
Moving to new territories unveils new opportunities
If a company stays on the same spot, it limits itself to the opportunities available within its vicinity. By extending its frontiers, it opens itself to new opportunities which it would have never experienced had it held on to its old territory.
Nokia, the telecommunication company, started in 1865 as a paper mill. By 1871 it had extended its operations to include rubber boots manufacturing. Over the years, the company has been involved in cable manufacturing, tyres and telecommunications infrastructure equipment, among other ventures. The company grew so well that by 2007 it produced more than half of all mobile phones sold on planet earth, and its Symbian mobile operating system commanded a 65.6 per cent global market share. Today, the company, which started as a small sole proprietorship in Finland, is a global brand. Nokia has grown this much because right from its onset it set its eyes on conquering new territories.
How leaders grow their organizations
To grow their companies, business leaders have to do the following:
Leaders have to develop themselves
Leaders are change agents. But for a leader to effect the right change, he must not be in doubt about what to change, when to change it and how to effect the change.
If he does not know what to change or he does not know enough about what to change, he will be unable to lead the change. To lead right and to put their organizations on the path of consistent growth, leaders have to be ruthless about their own capacity development.
A leader is expected to show others the way. For him to effectively do that, he must know the way. Leadership is the ability to breathe life into others; it is the ability to give others what they cannot give themselves; it is also the ability to show the people what they do not know about themselves.
Doing these requires that the leader must have essential information, which could be technical or general, at his finger tips.
So, one of the best things a leader can do for his organization is to develop his capacity.
Inspire the workforce
While some employees are self-driven and do not require any extraneous motivation to deliver on agreed terms, the majority needs to be inspired to do what they ought to do.
To effectively grow a company, the leadership has to inspire the workforce. While the leadership casts the vision for the organization, the actualization of same is largely a function of the employees’ capacity.
With an inspired workforce, reaching the moon will be a done deal. Therefore, inspiring the workforce is critical to the company’s continuous growth.
To inspire the workforce, the leader has to paint the picture of the desired future to the employees and also explain the rationale for desiring growth to them.
He has to explain what it means to have a bigger company in terms of revenue, size and visibility. The leaders also have to tell the employees what is in it for them.
He has to explain what the growth will mean to the staff in terms of pecuniary benefit, career prospects, pension scheme, health benefits, access to loans and other possibilities.
He also has to let them know what remaining at the current level would mean for the organization. Then he has to let the employees know what steps would be taken to achieve the envisaged level of growth and their role in it.
If the employees are made to understand the essence of the growth, the benefits and their role in it, they would be inspired to pull out all the stops to achieve the target provided their trust in the leadership had not been betrayed in the past.
Peter Drucker said, “Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”
Marketing is the heart of any business. While a company that does not take innovation seriously may still be able to survive, no business can thrive without being serious about marketing.
However, many organizations do not engage in marketing as much as they should; they focus more on selling rather than marketing.
Though marketing and selling are close, they are not the same. Marketing is intimating members of the public with the goods or services of an organization; it is putting in the public domain the uniqueness of a product or service; it is drilling into the public’s consciousness the qualities of a product or service.
Selling, on the other hand, is getting the public to commit to the product or service by parting with money to buy it. While marketing opens the gate, sales closes the deal.
Marketing is sowing while selling is reaping, the latter cannot be guaranteed without the former. It is for this reason that great companies do not joke with marketing.
The Coca Cola Company has been around for over 120 years and has been rated, repeatedly, as one of the best organizations in the world while its stock is one of the most valuable globally.
The company sells over 350 products in over 200 countries worldwide. It currently serves about two billion drinks every day. Yet Coca Cola spends a fortune on advertising its products.
Why does a company that is so popular and so prosperous pump so much money into marketing? Coca Cola knows that the secret of its success in sales is its presence in the consciousness of the public. So, it never slows down on its marketing.
In this age, nothing sets market leaders apart from the rest of the crowd like innovation. Innovation is identifying market needs before the market becomes conscious of those needs. It is going ahead of the market to proffer a solution to a problem that is yet to manifest.
Innovation will always give the innovative an edge over others for the simple reason that everyone is looking for solutions to the challenge that they have and it is anyone who provides the solution that they flock to. So, growing a business requires innovation.
De United Foods Industries Limited (DUFIL) identified a need in the Nigerian market; a home-cooked instant food. So, it came up with Indomie noodles which became an instant hit.
The company has continuously grown its business by increasing the number of noodle flavours it parades and extending its products to every nook and cranny of the country.
In spite of the influx of other companies into the industry, DUFIL has remained the market leader for two principal reasons; its pioneering effort as well as its thirst for continuous improvement. The company is almost always a step ahead of competition; that is the kernel of innovation.
When a business fails to make growth its focus, it makes its death a settled matter.