Profitable Growth 101 - SWOT
Organizations struggle with how to grow profitably because much of their structure and resources are focused on managing the core business. When it comes to developing new products and markets, resources can be hard to come by. On the other hand, most owners and CEOs know that without a plan to grow profitably their companies are in trouble.
This series of articles, which I call Profitable Growth 101, 201, 301 and 401, will explore the elements of developing a profitable growth plan. Each blog will cover the following topics:
- 101 - Evaluating the current state and tilling the ground for profitable growth
- 201 - Developing an overall Growth Strategy
- 301 - Innovating in products and markets & finalizing the Growth Plan
- 401 - Executing and managing the Growth Plan
Confront the Facts: The Current State
Before a company can develop a viable plan to grow, it’s critical to take a hard and dispassionate look at its current state: Strengths, Weaknesses, Opportunities & Threats (SWOT).
Most people are familiar with this SWOT analysis, yet it’s rarely used as a diagnostic tool to prepare for profitable growth. The key to making a SWOT analysis work is to be prepared to Confront the Facts, as Jim Collins suggests in Good to Great. This needs to be a legitimate look at how the company is performing today that doesn’t pull punches.
Finding Strengths, Weaknesses, Opportunities & Threats
What are the company’s true strengths, weaknesses and opportunities from the perspectives of:
- Customers?
- Employees?
- Investors or Stakeholders?
This won’t take long to find out, all you have to do is ask.
For Customers, gather the sales team and ask them to visit your company’s best customers - this is not a regular sales call - to actually ask them what they like and value about the company, as well as what they think could be improved. In my experience, most customers are not shy about answering these questions.
For Employees, I suggest hiring an outsider to conduct a series of SWOT sessions with groups of employees. A recent project segmented the groups in the following way: Clerical and Support Staff, Production & Engineering, Sales & Marketing, Finance & Accounting. These sessions usually take two hours to complete. The results are then shared anonymously with the management team and combined SWOT is completed by them. This should easily be completed in 1-2 weeks.
For Investors or Stakeholders, company management needs to determine the best way to do this, either individually or as a group. If the company has a board of directors, then this would be a logical first starting place. If this is a family owned business, it’s a family meeting. Sometimes, individual meetings with key investors or stakeholders is desirable to get the honest feedback the SWOT exercise needs.
Readiness to Grow
The end result of this SWOT analysis is a clear answer to whether the company is ready for growth. If so, then move on the the next step, if not then it’s time to fix things first.
Charlie Alter specializes in Business Growth, Innovation, and Coaching. Follow Charlie on Twitter at: https://twitter.com/#!/cpalter or check out https://bentbrookadvisors.com
