Leaders are faced with more change than ever before, leaner staffs and budgets, and many more decisions with less time to make them. As a leader it is hard to find time to take a step back from fighting fires to think about where the business is going, where it should go, and how to get there from here. Yet, if you aren’t doing that for your organization, who is?
When I speak with executive groups, I often ask them to write down the amount of their time they dedicate to thinking about and planning for the desired future state and then record how much time they feel they should devote to it. Rarely is the number the same. Most executives will spend between 0-25% on forward thinking and desire to spend 25-75% on it. There is no right answer as it varies greatly by organization and industry status. The point is we are so caught up in the immediacy of our world we have no time to improve the situation in a sustainable way. Unless we begin to lead differently.
The most common forces of business stagnation are not the result of disruption but rather our reaction to it. Again and again, clients share the same set of issues when queried about their performance. Are these explanations or excuses? You decide.
“Our competition has lowered price and we must match them eroding our margin.”
“The economy is bad and we had to lay off many of our sales force.”
“We are working harder than ever while waiting for the economy to turn around.”
“We have a lot of new initiatives in place—we are trying everything—but so far nothing is working.”
“We have a great new idea but no money to fund it.”
“We know this works because we have always done it this way.”
“We are doing everything our competitors are doing. I wonder why we aren’t growing.”
- 50% of companies have been around 10 years or more and those companies employ over 70% of the work force. They need to be seriously assessing their market viability.
- In the last decade firm births just barely exceeded firm deaths. Many Companies are not able to sustain themselves, but are replaced.
- The oldest existing companies in the world were founded between 578-1299 AD according to Wikipedia. Over 1/3 of them are hotels interestingly enough. Perhaps the hotel model has not really changed that much!
- As an interesting fact, the oldest commercial company in the U.S. was founded in 1655, Emery Farm. It is followed closely by Seaside Inn and Cottages opened in 1667, White Horse Tavern in 1673, Towle Silversmith in 1690. Sounds like a great road trip to me!
What this data tells me is that great leadership and great growth require a vigilant effort. It is important to track the meaningful performance of the company and its industry to understand what is driving growth. Don’t assume that it comes from stellar performance and superior leadership. That is when companies get caught off-guard and fall hard when the tide goes out. Regardless of whether growth numbers are good or bad, they may not be as good as they can be. How does a leader determine that there is more opportunity and it’s time to get unstuck—attitudinally and operationally? Ask yourself if your organization is/has…
- Growing below or at the industry pace
- Uncertain about what the most viable direction for the organization is
- Routinely missing forecast OR if it is built on an assumption that growth will continue without a specific rationale to justify it
- Too many projects on the radar
- Fewer than ¾ of new initiatives returning an ROI
- Needing constant direction
- Shrinking margins
- Changing customer mix and/or declining average sale
- Facing new competitors who are coming on the scene and doing things differently
- Experiencing a longer sales cycle
- More pressure to make more decisions and make them more quickly
These issues suggest an organization lacks strategic clarity, is operating at a tactical level without a unifying direction and is struggling to determine its future course. You don’t have to have all of these issues to signal a concern. A few of them at the same time speaks volumes about the need to rethink the current approach to business growth.
As a leader of the organization you are uniquely suited to raise the flag, sound the bell or even pull the alarm if necessary and communicate that the time has come to stop skinny dipping, spinning wheels or running in place and start getting traction by embracing market changes and hardships to make the organization better. Rather than deny the organization really needs to recalibrate, enthusiastically engage to develop a better, more sustainable approach to the marketplace, looking NOT to your competitors for insights but to other industry leaders, customers and consumers to see what they need and want and don’t know how to ask for. Accountability for growth doesn’t rest on the market place, the economic cycle or the sales force alone; accountability for profitable revenue growth rests with leadership to ask the tough questions, challenge the status quo and be prepared to evolve the company model as the market requires.