What are the characteristics of a growing business?
First and foremost, your business is already functional and has a fairly effective business model. As the business owner, by now you know what you are doing well enough, and your team (if you have one) are performing adequately but not necessarily to their full potential. Overall the company is profitable, but in a fairly repetitively consistent way. Which might sound great, until you realise that whilst you are standing still, the competitors are getting better. In business you either grow, or you start to die. This is where high growth business coaching comes into play.
Entering the growth stage of the business journey is where we move beyond mediocre and are aim for excellence. It’s about refining the way the business works by looking for those incremental changes; the things that add a percentage point here or there, to improve it.
The importance of marginal gains
The principle of marginal gains really matters in having a high-growth business.
If you took a look at how Team Sky performed at the Tour de France and various other Olympic cyclists or sportspeople, you’ll find that that this concept was really important. The sports coaches and advisors went down to the point of each of the cyclists having their own pillow and eating the same things at the same times each day to get the maximum gain out of the nutrition.
As a high-growth business coach, I use the same principles with my client companies.
As a high-growth business coach, I use the same principle with my client companies. Together we look at the business and customer journey from the top to the bottom, looking for every opportunity during the marketing, sales, operations, and financial management that can be improved by a percentage point or two.
Achieve marginal gains and become a high growth business
As long as you’ve got something functional and relatively consistent already in place, you can map it out and benchmark performance.
The objective is now to improve each aspect as you go and together achieve a much better result. Here are some examples of where small changes can combine to create big impacts:
- Stronger brand and business message
- More effective marketing
- Improve the sales conversion rate
- Distribution is leaner and less time consuming
- Increase the average order value
- Make repetition of orders more frequent
- Get customers to buy a broader range of your products/services
- Improve team performance
- Improve the efficiency of your software and your processes/systems
- Improve the productivity of your tools and machinery
- And more!
The aim is not to revolutionise any individual element or turn them into major projects in their own right, but to gain small improvements and combine them. It’s when all of those little improvements are added together the greatest difference can be seen. It’s not a case of changing one thing by 100%, rather changing 100 things by 1%.
What stops businesses from achieving this type of growth?
It is far more achievable for business owners to change lots of things by a small amount, than to aim for one big business change. The time and resources required for this type of growth and change is more appropriate to what is realistically available for most business owners, but it also actually delivers a better return on the bottom line too because of the compound benefit of each change. Although it sounds like a win-win scenario, that doesn’t mean there aren’t still hurdles in the way to achieving it.
- A business at this stage is reliant on the business owner, or a number of linchpin staff to be functional. That puts all the responsibility, pressure and workload on to one or at best a very few people who only have a finite amount of time and energy. It is also often the case that these critical individuals are not able to cover every aspect of the business/customer journey, or to be great at everything.
- Business owners tend to assume that they have to learn everything themselves for the first time through trial and error, rather than reaching out and accessing the expertise of people around them. Consultants, advisors and coaches can save them large amounts of time, effort, energy and frustration in actually getting there faster.
- There can be a lack of understanding of what makes the results in a business change most efficiently. Owners tend to feel there’s one particular area of the company that’s underperforming and focus all of their efforts on improving that one number or metric, whether it’s lead generation or team performance or something else. They will focus on one area rather than multiple areas at the same time and whilst there is an argument for single focus, the reality is that a compound effect is more effective. As a result of this misunderstanding, business owners often miss out on the potential benefit of multiple numbers improving in sequence.
Wise recommendations from a high-growth business coach...
The first thing to do is to have a really good plan and know what you’re actually looking to do in terms of growth.
That means having a future organisational chart in your head (or better yet on paper!)
Having a future structure for your business planned out, means you will have made decisions on what your services are, who’s going to be delivering them, you know who the support team are around that, you understand the operational units needed and you know which sites and locations you are going to use. It also allows for wage budgeting, and forward thinking recruitment plans to be established.
Growth is not really about trying to achieve more volume of the same thing that you are doing now, it’s about broadening out to meet the needs of customers and clients, and improving the way in which you actually function as a company.
There are, in fact, 9 main levers that influence the profitability of a company.
Once you have a plan, a strategy and a target for each lever, you can start to go through your customer journey and look for those marginal gains.