5 Keys for a Fast Enterprise Growth
Every company strives for growth, irrespective of their revenue and headcount. Startups & small firms want to get big, big firms want to acquire more market share to get bigger. Enterprises employ various techniques to achieve quick growth, but how quickly and steadily can you grow in an environment that comprises of competition, entry barriers, technology roadblocks and many other internal & external factors is a thing to ponder. Let’s try to look at a few key factors that enable organizations to grow in revenue and size.
1. Hiring the right talent
Enterprises find it extremely challenging to find the right person for the job. Organizations spend a lot of time in aligning their headcount requirements with budgets, but a few bad hires could cost thousands of dollars. So, how do enterprises find the right person for the right job? To answer this, enterprises must first understand where they stand in the global market & what kind of people can uplift their products & services. This could lay the foundation for starting any hiring mechanism. Firms must also create business processes and try to rope in talent that can mold well into the process streams, if not again there would be a mismatch in expectation levels. The role of top management is crucial in assessing the situation & identifying core roles that can propel the organization into a new level. In industry, this is referred to as “concept hires” or in simpler words identifying handful of responsibilities & then mapping these onto talent’s skillsets. This is a very effective process of hiring, as you’d only hire when there is a real need & not because there are budgets. Some enterprises hire to completely consume the budgets, this is a good thing if there is a real business plan in place. Else, again there would be more resources than responsibilities & handling could become very tedious. Overall, getting the right talent is a mixture of many ingredients like involvement from top management, defining roles & responsibilities, setting the right expectations & maintaining a positive culture. Of course, hiring the right talent is as important as retaining a good one!
2. Crafting relevant Business strategy
The strategy wing of an enterprise works to set a roadmap for all business units and thereby defines the action item of every individual contributor. Every firm develops products & services for a defined group of people called the target segment. The idea is to reach all these segments & to communicate a value proposition. A distinct business strategy can guide the firm to stay profitable by reaching important segments & satisfying their needs. Strategy comes from vision & mission statements of the enterprise; in other words the As-Is & To-Be scenario of the enterprise. Strategic management involves specifying the organization’s objectives, developing policies and plans designed to achieve these objectives, and then allocating resources to implement the plans. Strategic management is the highest level of managerial activity. Strategies are typically planned, crafted or guided by the Chief Executive Officer, approved or authorized by the Board of directors, and then implemented under the supervision of the organization’s top management team or senior executives. The top management must define realistic objectives & pass the same onto the organizational hierarchy tree. What this does? It sets goals for every business unit and in-turn every employee. There are many frameworks and mechanisms to set up the business strategy. Enterprises with major competition barriers use Porter’s 5 forces model helps to determine the competitive rivalry and therefore attractiveness of a market. It is used to help determine the portfolio of offerings the organization will provide and in which markets. A lot of firms use SWOT analysis to break up their strengths, weaknesses, opportunities & threats in brackets. It helps examine the organization’s resources in the context of its environment. With use of these & many other frameworks, enterprises can craft a strategy exclusively for the kind of business they are in and the market that they cater to. Strategy can be slow to start off with, but can accelerate certain business processes to yield quick results & growth.
3. Growth Financing
Growth financing is for companies looking for investments to expand or restructure operations, enter new markets or finance a significant acquisition without a change of control of the business. There are many types of funding options that the investors have designed to suit organizations of various sizes.
a) Seed Capital
If the firm has not yet started its operations & is in the initial stage of product launch, they seek seed money from VCs. This is a very small amount that may be required to carry out basic operations to run the core functions of the enterprise.
b) Start-up Capital
At this stage, the firm would have a sample product & service portfolio ready to launch in the market. Funding here takes care of hiring needs of key personnel, administrative management, market research, and finalizing of the product or service for introduction to the market.
c) Early Stage Capital
When enterprises reach a stage of reasonable growth, when sales and revenue is on an upward direction; they seek an early stage capital from funding companies. At this stage, funding could help you increase sales to be profitable in the market. These funds can also be used to pounce on the right business opportunities that yield results.
d) Expansion Capital
When the enterprise is well established in its market and is seeking help from the funding companies to take the business to the next level of growth. Funding at this stage will help enter new markets or improve marketing efforts.
e) Late Stage Capital
When the company has achieved great sales numbers and revenue. There is second line of management in place that takes care of operations. Funding here may help in improving sales and marketing efforts overall. Enterprises use funds to increase the working capital too.
So, choosing an appropriate funding option can propel the growth of an organization. Enterprises looking for funding must juggle with many questions like “Does our firm really need external funding at this stage”? “If yes, then how much money”? “Can we justify our efforts for that kind of money”? “From which investor”? “What will be the road ahead after getting the funding”?
4. Creating an entrepreneurial mind-set
Entrepreneurial mind-set orients every resource in the organization towards entrepreneurial objectives and results. Top management plays a huge role in creating such an environment where employees are empowered to the right extent in order to achieve desired results.
Resources with an entrepreneurial mind-set:
- Create new opportunities by being innovative
- Have a holistic view of the entire operations
- Take calculated risks in order to be competitive
- Understand the pain points of the firm and align their goals with firm’s objectives
5. Creating a good internal & external environment
A firm’s internal environment is composed of the elements within the organization, including employees, management, and corporate culture. It is vital to manage all these elements and support them by creating a work loving environment. This might be related to activities like talent engagement & development, working on cultural aspects, improving facilities at workplace & creating a good compensation & benefits plan for all employees. A firm’s external environment consists of elements like technology, Ecosystem, competitors, Legal/Political barriers, economy, and demographics. Firms must manage all these elements in a balanced way to gain a competitive advantage on a global platform. By improving external factors, the firm would be set to move onto the next growth phase by entering new markets, being more focussed on target segments and thereby satisfying a specific customer base.
Organisational growth requires a great deal of planning and appropriate people & processes to ensure those plans get implemented. It’s a combined effort coming from every tangible & intangible resource of the firm. Though the above factors may not be completely exhaustive, these will definitely impact the growth philosophy of an organization. Lastly, it is the onus of the owner or the top management of the firm to ensure that the growth is sustained and not given up at a premature stage.
Image Credits: referenceforbusiness.com