David Cummings, founder of Atlanta Tech Village, has a great blog site. In October, he wrote a blog titled, "When Growth Stalls". Having seen this issue in a wide spectrum of businesses I felt compelled to share my insights to a problem that brings about panic, regrettable spot decisions and actions, and businesses being shuttered. David observed correctly that stalled growth can be attributed to numerous factors. Here are just a few I have personally observed with clients:
(1) Externally caused: new competitors (same product or better product), market saturation, market disruptors (Uber, for instance), technology shifts, new consumer/business trends, regulatory changes, new Google search algorithms that push your site to page 20.
(2) Internally caused: excessive spending on non-value activity, in-effective marketing spend, bad hires, no plan (long or short), loss of largest client to rival, pursuit of non-core business opportunities, loss of core competency, lack of respect for competition.
The first challenge to overcome stalled growth is to accurately identify the cause (more likely causes). 15 years of consulting experience says that you, the owner/founder, may not be the best person to uncover these causes. After all, stalled growth did not happen in an instant and we humans have a remarkable way of seeing only what we want to see.
There is a great Harvard Business Review study/article titled, “Evolution and Revolution as Organizations Grow” that has achieved "classic” status because of its long standing relevance. The study involved thousand of companies from all industry sectors. It concluded that companies go through five stages of growth. Each stage is preceded by mini “revolutions”. These revolutions can reveal themselves in dramatic ways such as the loss of a major customer. But they can also be insidiously subtle, a marketing initiative released prematurely or one of your team failing to know pricing changes before talking to a new customer. The author concluded from the data that growth occurs when leadership recognizes those telltale signs and evolves both management style and operating practices to address them. The companies that don’t “evolve” stagnate or die.
Here is an excerpt from the article: “The problems at these companies are rooted more in past decisions than in present events or market dynamics. Yet management, in its haste to grow, often overlooks such critical developmental questions as, Where has our organization been? Where is it now? and What do the answers to these questions mean for where it is going? Instead, management fixes its gaze outward on the environment and toward the future, as if more precise market projections will provide the organization with a new identity.”
Stalled growth has huge implications. These conditions add weight to the already burdensome challenge of being a business owner. Don't let ego prevent you from welcoming an outsider's perspective to determine the causes. This is not the time for guessing and attacking what you “think” are the contributing factors. Such an approach can delay recovery at best or accelerate the death spiral.
Want some help to define a new growth path for your metro Atlanta, Georgia business? Let's talk about it over a cup of coffee.