There has been extensive research into the business life cycle, however few studies have pointed to the practicalities of the intervention that are pivotal at each stage of growth. There is undoubtedly some common ground and overlap across the different phases, however some conclusions can be drawn in relation to – what support is needed at these critical stages. My experience shows that companies hit major challenges at a number of key points on their growth journey, particularly as it relates to employee numbers:
When a business reaches 5-7 employees – this is when a company starts to take shape and the founders find themselves faced with a set of challenges they never envisaged. Leadership skills become tested at this point as does managing people and cash. Funding for growth becomes a critical issue.
When a business reaches 25-30 people – the leaders are now faced with the issue of relatively high monthly costs to run the business. Structure and team working becomes vital. I believe this stage presents a real danger zone as organisational development and financing, along with more strategic selling become vital to sustained development. It is at this point that business owners set out to recruit a sales manager/director – a challenge for many! Financial control becomes a full time job
When an SME approaches 50 people – corporate thinking and mindsets are presented with KPIs becoming even more important as business issues become more complex and demanding. Management teams become preoccupied by sustainable revenue streams – key functions start to emerge and divisional perspectives give rise to profit centre management. Tight operational monitoring, management and control need to be embedded to ensure lean processes prevail. Staying ahead of the game is vital otherwise a disconnection from the market place will lead to stagnation and potential decline – not a good place to be!
An entrepreneurial mindset conducive to embracing constant change is vital to making the above transitions. The most common challenges for entrepreneurs along the journey present themselves in the form of how to:
- Achieve clarity in relation to business and personal aspiration – vision, strategy and plan
- Effective sales and marketing in increasingly competitive environments
- Organisational development – the right team in place all working towards a common goal
- Financial engineering – getting the right funding in place and managing the finances
- Managing costs and ensuring lean and efficient processes across all functions
Non-executive directors (NEDS), coaching and mentoring prove to be vital external inputs to addressing these key challenges and stages of growth. One thing that inhibits the growth wish of many entrepreneurs is the management of people. Embedding effective organizational processes and systems are vital. A business can only grow as quick as its team so getting the people elements is vital.
This morning I experienced a great example of public sector entrepreneurship. We recently moved to Salford Quays next to Media City (new location of the BBC) – one of the key attractions was to be close to the digital expertise located in the area and indeed the Media department of Salford University. Why? can any business overlook the benefits this new digital age will bring?
All well and good, however business growth only takes place when conversations and personal relationships gather momentum, trust is built and mutual respect results. Critical non essentials such as courtesy, humility and just caring are so often overlooked in the teaching in business schools and the books they encourage us to read.
Back to the point, having been in our new office for only 1 week a call came into us from Salford City Council – Matthew Lynn, one of the Economic Development Officers. Can I come in and talk to you about how we can help? Firstly, I was astounded that they knew we were coming and secondly, today a meeting with Matthew clearly demonstrated:
– Customer focus
– An interest in what we do
– An explanation of what services the Council can offer
– The introductions they can make to partners
– Details of networking opportunities
– Opportunities to work together (win-win)
I was left with an overwhelming sense of entrepreneurial flair and what I call living in the “Customers World”. Top stuff, I was inspired to see that both an individual and the Council had a genuine interest in us. The start of a great relationship (I hope) – who said the public sector is not entrepreneurial!
I spoke at the Institute for Small Business and Entrepreneurship conference earlier this week. The theme was entrepreneurial learning in organisations. It was an extremely thought provoking session, that brought together fantastic academic minds on the theme of entrepreneurship.
As a keen observer of entrepreneurial learning and improvement, my view is that the UK economy will grow faster if more effective leaders are created and nurtured. Enterprise policy makers must recognise the importance of bigger thinking and greater ambition – a key component of leadership. Academic enterprise research needs to investigate in greater depth the emotional needs of entrepreneurs – the spirit and mindset. Setting up and growing a business can be extremely demanding. For entrepreneurial leaders balancing personal and commercial risk can be a debilitating experience – we must look at developing practical coping strategies to help leaders overcome the fear often associated with the stages of growth.
From my discussions with participants I was encouraged to hear that softer issues do appear to be attracting more academic interest. Topics such as developing an entrepreneurial mindset, coping, resilience, mental toughness, personal branding and faith must get on the agenda. These are all essential ingredients for leadership success. Practical tools to help entrepreneurs address these areas would be well received within the community – when the going gets tough, the tough get going. Entrepreneurs are courageous individuals who cope well with the lonely rollercoaster existence, helping them to live with high pressure moments would be a well-received antidote for those wanting to make a difference. I am extremely excited about the work ISBE is undertaking.
The constant doom and gloom we hear through the media really is not very helpful to the entrepreneur out there trying to build a life from him/herself and family. The reality is for many of us, the Euro crisis and all that other stuff going on does not have a direct impact on the success of our company. You can’t change what going on in world markets, so don’t get drawn into it, focus on the things you can effect.
Live in your own “micro climate” – staff, market, customers, new products, think differently, experiment with new ideas, discover new partnerships, think collaborate!
There are good things going on and despite what the media says there is help for SME’s, the new BIS service – GrowthAccelerator (www.growthaccelerator.com) is a great example of a fantastic service that will help entrepreneurs to build a better future – help for planning and strategy, innovation and getting yourself ready for investment…….
There are good things going on and smart people are doing great things – please can we celebrate a bit more!
I read a great article this week, passed on to me by my mate Julian Grice (he’s a top lad when it comes to branding and marketing, probably the best I have come across) – it was all about positioning and game changing strategies for high growth companies. There were four fantastic examples of companies that repositioned their brands with dramatic effect:
1. Apple….from geeky nerds to a cool brand probably the biggest on the planet
2. Domino’s…..moved from selling pizzas to focusing on service and delivery excellence
3. Red Bull….repositioned the drink from one for exhausted lorry drivers to life style marketing for “go getters”
4. Netjets….from selling private jets to adopting the time share model (the results speak for themselves)
This is a lesson for all gazelle businesses…..a tweak in what you do, for a new segment can have a massive impact. Here’s to the start of a high growth week!
Entrepreneurial high growth leaders can extract an enormous amount of insight from the great man himself, Charles Darwin. The ability to embrace change is such a vital ingredient to the recipe for accelerated performance. Growing a company can sometimes feel like a fight for survival and there is so much evidence to suggest that those who adapt and change come out the other end fitter, stronger and more competitive.
This week I having been ranting on about the importance of nurturing better leadership skills. Companies will grow and create more jobs only when their founders fine tune their ability to build a strong team based ethos. Growing a business requires the essentials of both personal and business change, the former being the precursor to developing a thriving and winning environment. The requirement of the individual to embrace with confidence new situations and challenges is key.
On the theme of developing more ambitious leaders, this week marks a very important landmark for the High Growth Foundation. We are taking 18 entrepreneurs to Silicon Valley to see how businesses such as LinkedIn and Google grew to the size they are – global superstars whose leaders truly embraced the the power of change. My mate and highly distinguished journalist Michael Taylor will be out there with the group – reporting on what he’s observing the best do. Hopefully these insights will help not only the delegates but also other members of the Foundation and our broader community to nudge their bar of ambition to a higher level.