Business Growth Inhibitor: A Lack of an Effective Plan
Business planning isn’t something you should only do when you need to secure a loan from the bank. Being predictive in your business practices is a good way to encourage growth, and to be prepared to handle changes in the marketplace. Executives are often quick to dismiss the value in building plans, because the planning stage can be time consuming and cumbersome, and can sometimes feel like a less valuable exercise than some of the bigger tasks that need doing.
When I talk about planning for business growth, I don’t mean a single plan. You need multiple plans that, working in conjunction, form the broader business plan. Every major department should be tasked with developing, or at the very least contributing to the development of, their yearly plan.
The most obvious plan is the financial plan. You need to know how you’re going to pay for the business. You need to identify ways to raise capital to fund your growth, as well as opportunities to improve productivity or eliminate inefficiencies to help bolster your bottom line. Growth comes at the expense of income, which is something executives need to come to terms with at the beginning. You can either earn money which you invest it back into the business, or you can keep the income; you cannot have it both ways. Your financial plan should be developed by people with the right knowledge and understanding to make smart, sometimes difficult, fiscal decisions, and that doesn’t always mean the CEO is the right person to do it. Once complete, the plan needs to be reviewed and scrutinized before being made final. Trust that you have the right people in place to make the tough financial calls.
That brings me to my next point, having a people plan. Often times businesses evolve and grow, but the organizational dynamics are slow to respond. In order to grow, the organizational dynamics need to change. You need to create new roles and hire people, so you’re poised to take on new opportunities without over taxing your current staff. That means giving senior management and executives the mandate to build a team of professionals they trust to delegate tasks to, and to focus on the more high level tasks and decisions which can help propel your business forward.
Further to this, the CEO needs to constantly re-evaluate his or her role in the business. Entrepreneurs run the risk of falling into the trap that everything needs to be done by them. Non-strategic decisions which do not greatly impact the trajectory of the business should be left to other executives and senior management, so the CEO can focus on their number one role, which is to be in front of people. As the CEO, you’re the face of the company and you should be out there building relationship and spreading your business values. Getting trapped behind a desk making low levels decisions is not a valuable use of your time or position. Once your business reaches a certain size, right around the mid-market, the CEO should spend a majority of their time interacting with people, be it clients, vendors, consultants, business contacts or employees. You need to manage the flow of your business relationships, and grow them into opportunities which help advance your organization. There is no more important role than that. Participate in the planning exercises to a point, but trust your staff to create the plan and present it to you for final review, so you can spend your time building relationship with the local business community.
While financial and people plans are high on the list of necessities when you’re growing your business, it’s important to realize that every department should go through an annual planning process. Sales planning, marketing planning, customer service and quality assurance planning should all work in tandem to keep your business operating smoothly on a path of growth. When you plan effectively, you eliminate a lot of surprises, and reduce the amount of time your business spends in reaction. Being predictive in your planning and prescriptive in your approach will go a long way toward facilitating your business growth.
From my perspective, every business growth inhibitor can be turned into an opportunity; it just requires careful planning and attention. Being aware of the common inhibitors and how they can impact your business is a great start. Once you’ve identified the areas in which your business is weak, you can make plans to correct those and approach your strategy for growth in a more productive way.
Over the past 10 years I’ve helped Rand Group grow by being aware of these inhibitors and working to overcome them. I’ve helped other executives do so, and continue to work with clients to help them reach their goals. In my next post, I will dig deeper into the impact technology can have on the growth of your organization
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