LEADERSHIP STRATEGY: TO GROW OR NOT TO GROW?
Remaining small and profitable does not mean staying the same
The marketplace is shifting because of global competition and the impact of digital technology. And, like a wheel within a wheel, so are internal business dynamics. The age-old challenge of managing growth continues—it’s a challenge that eventually confronts every CEO. If the management of corporate growth is not dealt with effectively, the entrepreneur’s dream of leading a successful enterprise will never see the light of day.
There are transition points in the lifecycle of every small business. Most “start-ups” fail their way to success until they reach stage-one maturity (a point where a history of positive performance has been established).Although the majority of business failures occur during the first two years, bankers believe that it takes at least five years before a CEO will have experienced a sufficient variety of issues to prove that he has what it takes to succeed.
The odds of remaining profitable increase after reaching stage-one maturity, as long as the business stays on top of internal and external challenges—an activity that is becoming more difficult in the shadow of fierce competition.
Prosperous stage-one owners focus on maintaining profitability, but success seduces many into unplanned growth. Next to cash flow and competitive threats, succumbing to knee-jerk expansion is the major destroyer of small business. Unmanaged growth has killed (literally) the health, wealth, and relationships of many CEOs.
Expansion “dis-eases” usually kick in when the personal will and skill of a CEO is no longer sufficient to drive what has become a larger, more complex organization. Hitting the expansion wall is a critical watershed. To survive, companies must either return to their profitable stage-one level or make a transition to “creating transferable wealth and wisdom.”
Tomorrow’s post : Small business: how to survive and prosper in the shift age
This post is sponsored by The Baton Management System