Your Growth Strategy

There are five key factors to consider when developing your growth strategy. While these factors are the same for each company, the decisions made in regard to each is largely a function of the senior management’s approach to new ideas, plans for growth, and their style of managing ideas through the organization. Therefore, as you consider the following factors of your growth strategy, you should also contemplate whether long term changes to your organization’s management approach are required.

The first step in your growth strategy is to generate new ideas. Depending on your organization’s corporate philosophies and structure, these ideas may come from within the organization or from its leaders. If your organization has a strong brand following, most ideas will need to be generated, or at least vetted, at the top of the organization. In companies with less of a brand following, or those that are diversified in their products or holdings, successful growth ideas may be generated from within an organization. The individuals involved in the day to day minutia and details are more likely in touch with what may be the next big idea. These individuals are closest to and often know the organization’s customers best. However, regardless of who comes up with the idea, senior management must buy into and champion it.

Once an organization has identified its new growth opportunity, the proper human resources to carry it out must be identified. These are the individuals with the skills, drive, and know how to make the new venture a success. If a new growth idea was developed within the organization, the candidates to help carry out the initiative are easy to find. Additionally, the drive and motivation and attachment to the project are already present. If the idea is generated at the top of the organization, depending on the organization’s staffing process, it may be necessary to attract the right candidates for the job, or merely re-direct an individual from one position to another. In the case where candidates self select for a venture, it may be necessary to incent desired individuals to participate in the selection process.

Another factor in your growth strategy is determining from where within your organization’s budget the funding is going to come. This item may be settled by where the idea was developed. If the idea was developed internally within a business unit, its funding may make most sense to come from its budget. This funding option is more likely to be viable for ventures of a medium to short start up duration. If the new venture was developed at the top of the organization and is being rolled to a business unit below, the funding would most appropriately be provided out of the corporate budget. The decision to fund the venture in this manner is important because early on there may be little business unit buy in, and therefore, they may be tempted not to fund it appropriately, if left to themselves.

Next, it is necessary to determine where within the organization the venture will function. Unless only one business unit will be involved in its start up or roll out, it is best to create an entity that will oversee it. This entity can ensure the cooperation of the various parties included and ensure that the agendas of the different groups involved do not lead to an unsuccessful outcome for the venture. Additionally, if the project is being launched from the top of the organization, it is preferable to bring together those who developed the idea and those implementing it early on in the venture process. This step should help ensure that there is adequate buy in from those whose day to day involvement in the venture will likely lead to its success or failure.

Finally, it is necessary to determine how the project will be managed – from the top of the organization or from within it. Those within the organization are usually closest to the day to day issues and are likely in the best position to spot problems and areas in need of correction. However, they may lack the strategic vision of the company and how the venture fits into its overall growth. At the same time, a top down management approach can also be problematic. This approach does not lend itself to adaptability and quick change, which are qualities often helpful when implementing a new venture. One manner to deal with this issue is for senior management to create project milestones and strategic funding for the project, but leave the day to day running of it to those within the organization.

Your growth strategy is largely determined by your industry, culture, and high level management philosophies. Success or failure with new growth strategies is often determined by how carefully an organization has considered the development and execution of its strategy in light of these three elements.

Bibliography:
Burger, C., Koster, A., Lechner, C., & Szczepanski, M. (2008, March 25). “Making Growth Happen: How to Manage Growth Initiatives Effectively,”. Retrieved October 3, 2008, from Booz Allen Hamilton: http://www.boozallen.com/publications/article/39631032

Mark Jordan is the Managing Principal of VERCOR, an investment bank that creates liquidity for middle market business owners. He is the author of “Selling Your Business the Easy Way”, “Enhancing Your Business Value…The Climb to the Top” and co-author of “The Business Sale…A Business Owner’s Most Perilous Expedition.” For more information, contact him at 770.399.9512 or email him.