Recent earning results from some of the world’s best-known companies have both raised eyebrows and caused concerns, not least for the thousands of people now affected by job cuts.
There can be many reasons why companies have got themselves into a position where they suddenly need to cut back. Sometimes the market has changed from being buoyant to being in steep decline. However, there are other examples where external influences such as the market are not the key factor. This includes companies where there is or where there has been, an obsession with growth.
An obsession with anything is often seen as unhealthy and unbalanced. An obsession with growth may be unwise if it is not thought through, managed, and evaluated well.
Growth has and always will be an essential aim for every business. It certainly was in every well-respected organisation that I have worked in over many years. However, I can also think of many occasions where opportunities for growth were held back and for very good reasons.
There can be a very big difference between what looks like good business for one company than to another, and it is not always about the revenue. Every business has its own strengths and weaknesses. Knowledge of what these are extend to the type of work both sought and taken on and the costs of support required to provide it.
If a company or organisation has a very aggressive growth policy, then there is a higher risk that business can be taken on which is not an ideal fit. Worse still it may be a very bad fit that becomes the cause of many problems, some of which might have been predictable and others that come as a complete surprise.
Businesses need managing and within that, business growth needs managing. Uncontrolled and poorly managed growth can lead to uncontrolled costs and internal problems, as well as external problems with suppliers and competitors.
Well managed growth is the outcome of the efforts of business managers who see the bigger picture. The bigger picture includes both the realisation that a growth strategy is just one of several types of strategy that are all interlinked and an understanding that a successful year may not always look like the achievement of a high growth target. In some situations, simply holding fast or minimising decline may in the long term prove to be the more profitable and sustainable approach.
What also needs to be considered is how you articulate your chosen strategy to your various stakeholders. Failure to do this may well create both confusion and concern. Internally people need to know what they should be working on, and external stakeholders need to understand why they should support your strategy.
Unfortunately, when there is a change to the strategy, there is often a communication disconnect between leadership, marketing and sales that can lead to people working on the wrong things. This misalignment can create inefficiencies that lead to both lower productivity and a growing sense that either or both the marketing and sales functions and people are not effective. Higher level strategies must be translated into commercially relevant sales and marketing strategies that people understand and have the tools to do the job that is expected.
Adrian Hargreaves is a sales and marketing consultant and the business owner of Hargreaves Marketing Ltd. For more information about communicating strategy check out our strategic theme page “Articulate Strategy Well”
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