|GET FOCUSED. GET CONTROL. GET GROWING.|
Are You Experiencing Growing Pains?
Though this topic is not often discussed, I want to focus on managing growth in this issue of Growing Possibilities.
I recently met with a client over coffee. While talking about the company's strategy for the future, I brought up the issue of managing growth. A patron sitting near us smiled in reaction to our conversation. We found out his MBA thesis had been on the challenge of managing growth. He was in agreement with the advice I was giving my client. His findings uncovered that a majority of companies do not attend to the risks expansion brings. His research is relevant and critical, especially since the burst of the technology bubble.
When sales are strong and revenues are up, many business owners feel a false sense of security. Their companies are growing and all seems well. What could possibly be wrong with expanding your business as much as possible? A lot can go wrong. Not that an increase of business is a bad thing, but too much too soon can end up in a disaster.
CMGI, an Andover-based company founded in 1986 as an Internet and marketing company, is a perfect example. In 1995, it began expanding as it launched @ventures the Internet venture capital arm that took its business in many directions. The company acquired and invested in many diverse technology businesses, built a huge public image and became larger than life. Its wild and unruly growth cost it and its stockholders a lot of money. The company grew too fast, in too many directions and made decisions that were not strategically solid. After losing or divesting most of its investments, CMGI is back to a more manageable and focused business.
Growth management offers a safety net ensuring sustainability. Many companies don't pay heed. During the dot.com boom, executives spent money like they were playing Monopoly. It appeared companies were doing well. In reality, the revenue had no substance behind it. Few of the high-flying companies were profitable. Businesses hired fast and furiously anticipating growth that did not come. Many spent too much on extravagant marketing tactics. The cost of doing business exceeded in-coming revenue. As in Monopoly, everyone wanted to build hotels on Boardwalk before strategically placing houses on Virginia Avenue and similar properties.
So, what can go wrong when you are growing your company? Your business could:
The result could be:
If unmanaged, growth is dangerous. It can set you up to fail. What can you do to protect your company? In business, you can work smart or be cowboy-like lassoing everything in sight.
Here are some examples of working smart:
Grow your business, increase your revenue, sell more things to more people, and hire more help. Whatever you do, do it slowly and methodically. Keep your company safe and profitable.
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