“Software and online-services companies can quickly become billion-dollar giants, but the recipe for sustained growth remains elusive.” – so says an article published by McKinsey in 2014, and after 4 years, very little has changed.
Where in the UK the Tech industry is leading the pack in terms of the number of high-growth businesses forging ahead, the US proportion of high-growth lies within the non-tech fields like retail, construction and government services. And regardless of industry type or positioning, there are several similar traits that exist for high-growth businesses who have lasted, and outlasted their counterparts.
Sustaining growth is hard work. In a study conducted by McKinsey where a selection of some 3000 businesses around the world were analysed over a period of 30 years, it was found that 85% of the companies analysed simply couldn’t sustain their growth and a small percentage of businesses were able to achieve long-term growth. Although some were able to hold onto a small degree of growth, it was far less than those who were able to sustain long-term growth throughout the 30 years.
So, how did they do it?
We share a few characteristics of high-growth businesses who sustain growth for the long-run.
High-growth businesses commit to the future
“That the world is changing ever more quickly may be a cliché, but that makes it no less true: all sales leaders know that they need to anticipate changes that could turn into opportunities or threats. Yet the best leaders move beyond acknowledgement to commitment.” – McKinsey
Understanding where you need to be, and how you’re going to get there, is probably the biggest strategic roadmap you’ll have.
High-growth businesses grasp opportunities to streamline their operating costs
Whether it’s reviewing significant supplier contracts, or reviewing fundamental procurement and processing costs, a huge part of your team’s focus should be on implementing strategic cost reduction programs (and if they’re not in place, they should be) and seeking out inefficiencies that are costing your business money.
High-growth businesses understand the importance of their People
David Cummings, co-founder of Pardot, said it best: “Corporate culture is the only sustainable competitive advantage that is completely within the control of the entrepreneur. Develop a strong corporate culture first and foremost“. As the founder, owner or leader within your business, your people strategy is critical to seeing sustained growth. They should be in it for the long-run and your company culture should be one that is best matched to support that growth. Take the time to understand how you interview new candidates. Take the time to define the qualities that you want in your team and take the time to work with individuals who may be falling short of your expectations. But, take the time also to engage with your team, and understand where they think the business is going, where they feel inadequacies lurk in your armoury and where they think improvements can be made. After all, they are the ones on the cold face of every process, every conversation, every sales lead.
High-growth businesses are agile
Continued growth for any business means an ever-changing set of tactics that support your strategic goals. Assuming you’ve done it correctly, your strategic goals would seldom change. What does change, almost every day, are the tactics you use to achieve them. Whether those tactics are a marketing approach, or a financial spend, whether it’s the way you engage with your customers, or how you develop your product – your amount of agility to change tactic on a whim will determine whether you are able to outlast your competition, and continue in the path towards strategic success.
High-growth businesses are digital
“Successful brands don’t just “do digital”; they use their full arsenal of capabilities to massively increase the effectiveness of their sales force and to transform the customer buying experience to be “digital first.”” – McKinsey. Becoming a digital business doesn’t simply mean employing digital marketing methods – although that would be a great first step, if you’re not already doing so. The importance of digitisation throughout your business lies much deeper than that – and infiltrates almost every function with your business. From your finance team to your HR team and through to your customer engagement team, every function in a high-growth business understands, and utilises, a digital platform through which to process things, engage with people, obtain information and data, and most of all, access insight on an ever-changing market. Being truly digital doesn’t only mean that your data is securely stored in the cloud, and that your PPC is on par with growth, it means that your digital strategy underpins every strategy, every sales action, every piece of communication you send out.
High-growth businesses are focussed on growth, not margin or cost structures.
In the same study conducted by McKinsey, it was found that those who focussed on growth delivered long-term results far better than those who were more concerned with having the correct margin and cost structure centres along the way. Understanding how and when they’re would grow, and being able to recognise opportunity when it arrived, yielded far more results than the businesses who were, somewhat pedantically, focussed on individual margin and cost structure. However, one cannot function without the other – and for the businesses who successfully saw long-term growth, they had mastered a constructive balance of vision-focus vs tactical best practice.
We work with high-growth businesses and help them see their long-term goals become reality. We help them source the right funding for their business, and help keep their focus rooted firmly on long-term success, through ensuring that their operational infrastructure is performing optimally. Interested in knowing more? Get in touch.