Managing Innovation that directly leads to new business growth is the holy grail of successful and growing businesses. All types of businesses of any size and in any market can benefit from a more structured approach to managing innovation – with the goal of finding new and profitable opportunities to grow. This is a three part series that will explore approaches to managing Innovation and Profitable Growth.
But first, let’s talk about your business. Any business basically has three options in terms of the future:
- Protect the status quo
- Sell or exit their business
- Grow profitably
Protecting the Status Quo
Some business owners may choose to protect the status quo, it’s certainly the easiest and least risky of the options, particularly in difficult economic times like we’ve experienced recently. This is really the “Hunker Down” approach and it makes sense for some businesses in the short-term but owners should understand that it’s a zero-sum plan and will ultimately lead to problems.
Why? Because change is continuous, if your only strategy is to hunker down and hope for the best, you are betting that change will be positive and you might just luck out, maybe like you have before. Protecting the status quo also means continuing the same strategies and plans as you’ve used in the past, with the same people in the same seats. In my experience, this approach is a recipe for disaster. Staying the same is really not an option at all, because change is inevitable, in markets, products, services, industries and for people
So what about the other options?
Sell or Exit
Selling your business or exiting from running your business should always be an option on the table. Many owners or CEOs have never contemplated an “Exit Strategy”, either personally or in terms of their business. For whatever the reason, if you don’t feel that you can commit 100% to the future for your business, perhaps it’s time to sell the business, or if it’s an option, step aside and let someone else lead the business into the future.
Grow the Business
If you have concluded that the future for the business is Profitable Growth, then read on. This column and the next two will focus on what you need to know about Managing Innovation and Growth, and give you practical tools to help demystify the process.
If you plan on growing the business, the first step is to assess the Current State of the business as honestly as you can. After you understand the current situation, then it’s important to think expansively about the long-term future, possibly 10 years or even more in the future. After you understand these two “bookends”, you can begin evaluating your business’s options for innovating, finding new opportunities for growth and managing the process.
Step One: Understanding the Current State
The first step in planning for growth is to assess the current state of the business as honestly as possible. In my experience over many years of consulting with companies on growth, I offer the following suggestions:
- First, call a meeting with your most senior managers, or in smaller firms the people you trust the most and depend on to directly manage the business. In family businesses, this will certainly be family members.
- Before the meeting, ask each person to describe in writing their opinions on the current state of the business:
- what’s going well?
- what’s not going well?
- what products, markets and customers are the best ones now, which ones are bad?
- what misalignments are apparent that have become obstacles?, and
- are the right people in the right seats?
- Go around the table and let everyone speak his or her mind, then write everyone’s thoughts on a white board or flip charts so everyone hears and sees what each other has to say.
- Identify the comments and themes that everyone has in common and boil down a description of your company’s current state, don’t be afraid to identify negative issues and problems or misalignments. Write these bullet points on the white board or flip chart.
You’ve now taken the first step on the road to Profitable Growth. Next week I’ll discuss how to describe the Future State for your business.