3 Major Misconceptions About Business Growth
Scaling up your company can be daunting and it doesn’t help that everyone in a five-foot radius wants to give you advice, insights, and “nuggets of wisdom”. The trouble is, even well-intentioned advice can be dangerous if it isn’t fact-checked. So, learn how to avoid these 3 common misconceptions about what it takes to scale up effectively.
1) Explosive Growth is Best
Your organization is doing well and you’re ready to grow. You’ve seen tech companies become wildly successful overnight, and you’re want similar results. Quick spurts of growth are always the best, right?
Not quite. A common misconception about scaling up is that growth needs to be as explosive as possible, even if it’s sporadic. In reality, you need to consider your industry and the competitive landscape to determine what type of growth is best for you.
Many times, incorporating process, strategy and infrastructure that lead to consistent revenue growth are the keys that lead to long term sustainability and success. So while quick growth spurts can be helpful to the bottom line and lead to things like investor confidence or employee morale, consistent growth will help your organization meet your business goals year after year.
2) Leadership is Always Right
A company’s leadership team is usually credited with its success — but just because a strategy worked in the past, doesn’t mean it will work again.
Think about Elon Musk, Steve Jobs, and Jeff Bezos; in many cases, founders become icons for their businesses, and it can be easy to believe that their leadership skills or expertise were the reason for their organizations’ success.
How founders lead is hugely important, of course, but they also make mistakes. And sometimes, the same strategy that helps a leader get their business off the ground can be the one holding it down.
A Harvard Business Review article by business coach and educator Jeffrey W. Hull suggests that the leadership styles which work best during a company’s start-up stage can actually negatively affect an organization’s chances of scaling up. Why? Because as your organization grows in size, there are different challenges and obstacles to contend with.
While a visionary leader can really boost a company from the ground-up, Hull explains that you may need to adapt your leadership style when you’re no longer a three-person company.
3) Always Stick to the Strategy
When founders first begin start-ups, they have a very specific idea or purpose in mind. And while it’s great to stick to your guns, companies that want to scale up effectively will need to be ready to adapt.
One major misconception is that your organization needs to be 100% focused around your current strategy in order to see progress.
While your company’s core ideologies will likely remain consistent across different growth stages, your goals, plans, and strategies will need to be flexible to change. While you should be focused, you should also be open to switching things up or testing new strategies.
As much as strategic planning can help your organization anticipate the future, things won’t always go as planned. The market doesn’t respond to your product the way you expected, a big investor won’t give you the time of day, your machinery fails. It happens.
Companies hoping to scale up can become so singularly focused on their mission that they fail to make adjustments to meet their realistic business needs. This is one of the biggest factors that affects why organizations that were once successful end up going bankrupt: they can’t or won’t adapt.
While you want to stay aligned to your company’s core purpose, business author Verne Harnish suggests that your strategy should be open to new ideas, perspectives, and processes. The input of many different people can help your company better respond to unique issues and find new avenues for growth.
Your journey on the path to scaling up shouldn’t be hindered by misconceptions or misguided advice. By recognizing that plenty of common-knowledge about business growth might not apply, you can discover what it really takes to build a sustainable, successful organization.
What’s some well intentioned advice you’ve received that had to be sidestepped? Comment below.