10 Reasons Your Business is Not Growing
Sobowale Temiloluwa, in this article, provides insight into why some businesses are not growing despite the best strategies
The end of year is approaching and businesses are putting together end of year results, profit and loss statements are being released. Many growth targets were not met; many organisations are already planning new Retreats and strategy sessions to look at What Happened but most of the time we overlook why it happened.
These 10 reasons below will serve as a yardstick for measuring your business growth successes and failures in 2017, while it also serves as a guide/framework for your organisation as you make your projections and growth plans for 2018, so you can clearly see the blind spots in your organisation, holding you back from growing like you should.
Over-reliance on strategy alone
â€œNo Battle Plan Survives Contact with the Enemyâ€ Helmuth von Moltke
When your plan/strategy meets the real world, the real world wins. Nothing goes as planned. Errors pile up. Mistaken suppositions come back to bite you. The most brilliant plan loses touch with reality.
It is of note that strategy is only 10% of the success equation, the remaining 90% is execution. So why do you have to spend all the time getting the fine details of strategy alone right(10%) and be left with no time to execute which is 90% of the success equation. Donâ€™t get me wrong, if you fail to plan you plan to fail, not having a plan at all is planning to fail, but over â€“reliance on the strategic plan you have not adapting it to fit real life challenges faced while you go along, will hinder the success/growth of your business and on the long run-you will not achieve your desired growth target and goal.
Simple, define your end goal, put a good enough plan together, move into execution, measure success, adapt your plan based on success performance metrics, scale what is working, drop what is not working.
Lack of needed skills
Many organisation suffer from what I can call Over-experience syndrome. Many have so many experienced people in the system and very little skillful people to complement the experienced resources.in strategy execution, human resource is the most important ingredient, followed by time and money.
It is of note that experience can only help you for today based on insights gathered from Yesterday, the right skills can help you predict tomorrow and plan for it, while you are still here today. A good blend of fresh skills in area that you want to dominate or areas where your strategy is tilted is needed to help your brand achieve your desired growth goal.
You need to employ the right mix of experience and skill, and empower the teams with the support to make them succeed including the freedom to make certain key decision that affects the growth of your business,even if it means giving them strategic roles in your organization. Brands like Kraft food understand this mix and recently appointed 29 years old David Knopf as Chief Financial officer.
Under-funding a strategy is a Major Killer for success and growth. Most strategic plan executions are cut down and made in-effective due to lack of proper financing, because there is too much focus on cost management. Truth is If you under-fund a strategy and the growth results are not achieved, the initial funding was a waste. Will it not be better to fund the execution appropriately and get the desired result? I know you will ask about return on investment from the beginning of the project, Yes ,you need to use industry benchmarks and range of possibilities to come up with Return on your spend for your brand. Agree upfront what success means to you (financial and non-financial metrics), and find ways to map non-financial results to financial goals, and from there calculate your return on investment. Truth is return on investment on any financial investment in strategy/ executions should be accounted in financial terms. While non-financial terms can help see progress, all this must at the end be calculated and reported in financial Terms.
Focusing more on research than analytics
In Nigeria, we love research; we can research about everything and anything. Research case studies pop up every week and we scramble to look at the trends in the new research and position our business for the next big thing that will help us grow. We forget that our uniqueness and greatest strength and opportunity to grow, lie in the existing interaction data we have of our customers. What customers say is important and we get that from research, but what customers do is what makes it possible to increase our â€œShare of walletâ€ from a single customer increasing revenues for the brand. Customers tell us what they need by interacting with our various touch points but turning the data from the touch points into intelligence via analytics, and applying them back into our business processes, is a major differentiating factor between successful and rapidly growing organization and those that see their growth decline over time. Data gathering and use of analytics should be a major strategic focus for brands that want to grow rapidly in a highly competitive market.
Lack of specific product job description
Have you answered the very simple question, what need is my product meeting in the market? You cannot be the low cost middle and premium cost service provider at the same time, you cannot be the best in technology innovation, customer service, and still be most trusted and efficient brand in the market? You have to choose what you want to be known for based on the need of the market your product needs to meet, deploy resources towards that, to make sure you have the largest share in the market segment you target. Look at this scenario, you have 10% share of market in 8 segments and you make N10 margin per segment because you work at the bottom of the pyramid in your segment using low price strategy, your total result is N80 margins across all the segment. Your competition has 80% of 1 market and controls price. The competition makes over N150 margin in your industry due to premium pricing and positioning. On the long run competition is more profitable, even though in one industry, makes more money than you do across all the segment you operate in. Lesson here is go into industries or segments you are sure to win and win big, donâ€™t do a me-too strategy as this might limit your growth potential and also drain you scarce resource.
Arrogance due to past success
So now you are a leader in your Market and you start to coast, good for you, but watch out, arrogance might set in and you gradually slip away from your position without you noticing it. It is a constant battle in the market and the competition is looking for gaps which they can be positioned to take market share away from you. Never get too comfortable in a market leadership position, always scan your environment for next trends and opportunity in your area of dominance. In Your arrogance donâ€™t expand into new marketâ€™s you are not sure off, or via off into product categories that is not in your core area. If you do this, you will notice that your resources will be spread across the new lines and you lose focus on your core business area. Over time you lose your market leadership and not win in the new markets or product lines youâ€™ve extended into. This is one way to cut short your growth due to lack of focus and expansion into areas where you have the list opportunity of winning. This just means â€œSTAY ON YOUR LANEâ€
The boss knows it all
Many bosses in Nigeria, have a know it all attitude, this is a major impediment to growth for many business. The roles of bosses should be to nurture and empower team members to deliver on results not force down their own ideas and ideology in the team memberâ€™s always. The team members most of the time have more information on specifics of situations than the bosses because this team members interact directly with the customers and know their pain points. This insights most of the bosses donâ€™t have, most of the time, the reports that get to the bosses have been filtered so much that everything looks good on the surface and then the bosses make decisions on the filtered info. Unfortunately if the opinion of the team members are not considered, there is a guarantee that the organisation will head in the wrong direction and growth hindered, so please bosses keep mute a little more and see growth walk into your businesses without doing anything extra.
Lack of innovation framework
If you want to innovative, you need to have a pre-planned innovation frame work. Innovation does not just happen is has to be planned and worked on. Are you engaged in platform innovation, eco system innovation, channel innovation, solution innovation and interaction innovation etc. From the beginning of your innovation for growth you have to be clear about the innovation area you want to focus on and do just that. Not understanding and having a framework will lead to moving from one innovation area to another and not winning in any if these areas. You need to also overcome many innovation myths like the need for an innovation room before any innovation can take place, thinking innovation just happens on its own, thinking innovation is about design and creativity. You need to have disciplined process to define, explore, solve, optimise, prioritise, develop, prepare and eventually launch your innovative product to fit and meet an identified revenue growth gap in your organisation.
Focusing on success alone
Failure is a major ingredient for success. You need to learn from failures, and even celebrate it. It is easier to build a business that will grow. Team members know that even if they make mistakes trying they will not be punished for trying. This builds a culture of risk taking in the organisation and makes way for speedy growth as the best ideas will come out during brainstorming session, due to the atmosphere and culture of openness, transparency and freedom existing in the organisation. In fact many quotes have been written on this subject matter and it has been established than organisations will learn more from failures that successes. So failure is not such a bad thing, it just tells you one more way how not to grow or succeed. So, think big, start small, fail fast, learn from it and scale fast.
No external support in strategy development and executions.
You will always need an external organization,/individual to support what you are doing internally and so give you a better world view of what you intend doing or are doing. Most of the time, being in an organization long enough tend to make everyone in the organization think the same way, see the same things and say the same things. If what you all are seeing, thinking and saying is right then this is good, but if you all are making a mistake then you might be heading for nowhere in your strategic growth plan. An external body will help you validate your facts without any bias what so ever, and tell you in candid terms where you are heading using data and analytics as proof.
It is also not a good thing to be the player and the referee, you either be the player (work on the strategic plan yourself) and get a referee to help you execute and measure success. You also decide to have one team develop your document, another team execute for you while you measure results and outcomes yourself. However you think about it, you have to get external teams to provide a holistic view on what you are doing and you can both agree on directions on your growth strategy.
Remember to always test, measure, agree and scale up fast. Always be willing and open to adapt your growth strategies to real live issues encountered during your execution processes. All the best in your growth plans!
– Sobowale Temiloluwa is the CEO of insightful business analytics limited, a data and analytics company focused on strategic brand marketing and business analytics. He is a graduate of History and International Relations from Lagos State University. He later went for further education at the Kellogg school of Management USA where he bagged certificates in delivering business growth and strategic data driven marketing. He is also certified from San Francisco, USA, where he was trained and bagged certificates in Interactive Marketing & Measurement, Advanced Social Media and advanced Mobile marketing . Email: www.entrepreneurship.ng