Clarity, capital and communication are the three key elements when seeking to grow a business quickly. Trailblazing entrepreneurs tend to have no problem when it comes to chasing a vision for their business, but often they struggle over finance and bringing in people who can really drive growth.
Skype, the internet phone service company, has been one of Europe’s genuinely entrepreneurial success stories during recent times. Its COO of Global Operations, Neil Ward, says: “It is crucial to set a company focus and tone that is simple; we are a product led… company which aims to make wonderful experiences for customers. [Often] it is what you don’t do that really counts when you have an almost endless list of market possibilities.”
Melanie Lee, CEO of early-stage biopharmaceutical company Syntaxin, agrees: “Focus is critical, as is the ability to determine a course of action and to follow it through to a conclusion by pulling all facets of the business into line.”
Sometimes, a dose of self-discipline is required to turn down new business. Sara Murray, founder and Chief Executive of satellite tracking enterprise buddi Ltd, and founder of Confused.com, says: “We are constantly asked for our products for different uses. If we chased all those opportunities, we would have inadequate resource to deliver in the areas of our core focus… you have to start saying ‘no’ to potential opportunities, which goes against the grain.”
Of course, it takes a certain kind of mindset to take up the challenges involved in achieving fast growth. Roger Parry, Chairman of research consultancy YouGov plc, says: “Smaller businesses commonly want to grow ambitiously, perhaps as much as 20-30 per cent. To achieve that growth rate you have to think about going into new geographies, new markets and developing new products, which forces you to accelerate what you are doing.”
This is where mistakes are made, which can prove fatal as the margins for error will be slim. David Whileman, Partner of Growth Capital at private equity firm 3i, says: “One of the biggest challenges we see is achieving balanced and well-funded growth. Often businesses are at their most vulnerable during periods of rapid growth: over-dependence on key suppliers, customers, geographical regions, or short-term bank funding has devastated many otherwise successful businesses, particularly in recessionary times… This means creating a capital base robust enough to achieve their rapid potential for growth.”
Graeme Butterworth, General Manager of Global Process Services at IBM, says that it’s vital to remain agile and efficient: “You have to understand what you need to do better in the business – whether that’s access to finance, how you reach customers, how you create new products or how to manage costs.”
Beyond a lack of clarity which might lead to diversifying products too early, or constrained capital caused by an excessive reliance on short-term finance, perhaps the most heinous mistake for the entrepreneur is a failure to build a capable management team.
Recruitment involves tough choices at the best of times, but a company seeking to scale-up quickly must bring in the right individuals who understand the ethos of the business and have the ability to deliver.
Roger says: “One of the biggest problems as you grow is that you’ll come to a point where there simply aren’t enough hours in the day for the two or three guys at the top of the company… You need to accept the fact that in 12 months you’ll have to bring in a new tier of management and so you’ll have to plan for it well in advance.”
Most business owners fall into the trap of being mired in the now, with little time to think about the future. David Molian, Criticaleye Thought Leader and Director of the Business Growth & Development Programme at Cranfield, says: “The main value added by the boss is in setting the strategic direction and enabling the employees to perform to the best of their abilities… it’s only by working on the business that you will succeed in growing it.”
The real triumph for the founder will be in knowing they have engendered a culture where people share the imagination to grow and that they have the talent to take it to the next level.
Paul Luen, founder and CEO of marine technology business Martek Marine, says: “It’s crucial to create the conditions for them to succeed within a challenging yet supportive management culture with total empowerment. You must develop a culture of high expectation where controlled risk taking is encouraged.”
With management empowered and everyone focused in the right direction – just watch the business take-off.
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