Mohan Sawhney, a professor at the Northwestern Kellogg School of Management, notes that “[while] it’s tempting to view business growth as a smooth, linear path, the reality is much more complicated.” Often, the talent and leadership that enable rapid expansion in a company’s early stages may not be enough to keep fueling high growth and this causes businesses to stagnate.
Four fundamental steps growth-stage businesses must take:
1. Stay focused on what sells best.
Many startups fail because they spread themselves too thin at the growth stage. They try to do everything for any client or they try to expand into multiple new markets simultaneously. And many times these strategies just do not work.
Instead, business owners should concentrate on core business areas. Expansion is a must but thoughtful, targeted growth is what wins the day. Being too opportunistic can waste precious resources, as well as take focus away from what made them successful in the first place.
2. Then innovate and expand strategically.
During the growth stage, pivoting towards what sells best and moving away from what doesn’t is the key ingredient to maintaining, or even increasing, expectations. Entrepreneurs need to strategize and innovate into niches that will help the core business expand.
Consider everything Uber has done to date. Uber continues to penetrate new and potentially lucrative markets around the world. Their mobile payment services have evolved to accommodate multiple payment options, which has proved useful in international markets–thus the company is consistently increasing its selection of vehicles. Hence maintaining focus on what it sells best and what its customers want most — rides.
3. Let processes and products take center stage.
During the initial startup phase, many companies rely on the skills of a small core team to seize opportunities and impress clients. But during the growth stage, maintaining that level of quality becomes a very difficult task, especially as core team members move on to new opportunities.
As small businesses transition into the growth stage, they need to standardize business processes so that great experiences can be consistently reproduced. This is accomplished by embedding expertise into the processes and structures that keep a company afloat.
4. Build your brand.
The startup phase is driven by client relationships. A great way to ensure clients think well of a company is to focus on building a positive brand image. This makes it less likely that a customer will leave if their current account manager calls it quits — something many small businesses fear.
By staying laser-focused on what works, pivoting away from what does not, continually innovating, and gauging feedback from your customers with tools like SurveyStud (smartphone survey app), a mid stage company should be able to avoid falling into the trap of the growth plateau.