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Are your growth pains hindering your growth? All successful and growing business will in one way or the other experience growth pain. The good news is that the pain can be avoided.
SMEs are a cornerstone of Europe’s economy and constitute the vast majority of its businesses. Representing a major part of employment and value added, they provide jobs for many European citizens. Their share in the business economy is much bigger than in the US and yet beneficial conditions for them to grow and prosper seem to be hard to establish. (Source: theparlamentmagazine.eu)
SMEs are an important part of the European economy, but their value to each country varies quite significantly. In Malta for example, 93.1 % of value added to the economy comes from SMEs, while in Germany 82 % of the country’s added value comes from SMEs. For the European Union, the average value that SMEs contribute to the economy is around 56 %.
During 2018, SMEs in the European Union employed over 97 million people, or approximately 70% of the workforce. In Europe’s biggest economy, Germany, SMEs employed 19.1 million people, with over 7.21 million people employed by small-sized enterprises alone. (Source: statista.com)
When taking a closer look at the structure of SMEs we see three different categories:
• Solopreneurs type of company/businesses with fewer than 5 employees
• Entrepreneurial lead companies with more than 5 and up to 100 employees
• SME’s with more than 100 employees and up to 250 employees.
So, why are not Solopreneurs growing and building for scale? There are of course many different reasons behind this, but one main reason could be growth pain. In this article I am trying to provide a deeper understanding of the concept of growth pain and how it may have a negative impact on your willingness and readiness to scale up your business and to move forward with massive actions.
What is Growth Pain?
Growth is generally described as a linear curve going upwards, but in reality it is more like a staircase than a linear curve. At the end of each step growth pain can happen and we will describe the symptoms and early signs of growth pain.
Just follow these simple steps to minimize the risk of taking actions too late. Taking necessary decisions too late is a sure way to experience growth pain.
Signs of Growth Pain
Early signals that you are starting to develop growth pain are listed below:
- Co-workers start to feel that they are becoming overwhelmed. Early sign: “there are not enough hours in the day.”
- Managers and co-workers are acting as fire fighters and lose their focus on the real goals. Early sign: “heroes are the ones that are putting out fires”
- High stress forces managers and co-workers to navel-gazing instead of working in teams. Early sign: “working in teams is a time-wasting activity”
- The long-term goals are being neglected and co-workers starts to forget where the company is headed. Early sign: “short-term priorities become the norm”
- Leaders and followers are starting to become ‘survivors’ instead of innovators. Early sign: “creativity and innovation are put in the back-burner”
- Lack of team-spirit. Early sign: “I have to do it myself if I want it done correctly.” Endless number of non-productive meetings. Managers and co-workers start to feel it is waste of time. Early sign: “alienation starts to grow”
- Plans are made but decision-making capabilities are questioned, and execution of decisions does not take place. Early sign: “productivity goes down and confusion increases”
- Some people have begun to feel insecure about their place in the company. Early signs: “brain-drain starts, and the most talented managers and co-workers leave first”
- The company has continued to grow in sales, but not in profits. Early sign: “pushing sales increases and profit-making decreases”
These growing pains are not only problems in themselves; they are also an indication of a systemic problem requiring the development of a stronger strategic and operational management.
Our method is based on bespoke method and tools that have been developed by Professor Igor Ansoff, known as the ‘Father of Strategic Management’.
Follow these simple steps and avoid growth pain:
Step #1: Hire the right people, at the right time. Profitable growth is not following a linear curve. It is more of a step-by-step process. Hiring the right people at the right time means that you will take proactive steps to avoid growth pain. It needs to be right from the beginning. A key process is a robust on-boarding process.
Step #2: Learn to delegate. Delegation is a skill, and you need to learn that skill. Use a Business Coach and improve your skill set before you start to experience burn-out or any other symptoms. Growing your business without burning yourself out is key.
Step #3: Build for scale. Improve your processes and procedures and design them for scalability. Install performance measurement and management system. Start to grow your business with cross-functional teams.
Step #4: Plan for moving out. All businesses are based on some sort of organization and location. It could be in an office, a hybrid-organization, or a 100% remote office. The key is to move proactively with your growth so that you have system and structure in place and enough space to grow.
Step #5: Leverage your strategy. One of the most important management tasks is strategic development and to understand when it is time to upgrade the strategy. If it’s done too late it will always end up in severe growth pain.
Many businesses are shifting their primary focus from delivering products and services to value-based interactions and connections.
Follow these steps and create multiple business focuses that create synergies between different business focuses.
1. What is the NEED your Ideal Customer have?
2. What TECHNOLOGY can we master to meet that NEED?
3. In which GEOGRAPHY can we find Customers with that NEED?
4. In which INDUSTRY can we find Customers with that NEED?
5. Through which CHANNELS can we find and serve Customers with that NEED?
When the capabilities for growth are in place, meaning that an Open Door Mindset prevails among the Top Managers, it is time to start the process above and find new ground for expansion.
We have listed some of the outcomes that you can expect when you learn how to take massive action.
- Faster developments
- Rapid implementation of solutions
- Improved working condition for co-workers due to better understanding of the WHOLE
- Improved customer delivery and service
- Improved shareholder and employee value because increased business focus creates better value
- Improved leadership skills and easier to fulfil goals and strategy for yourself, the employees, the company, and your community
How to Avoid Future Growth Pain?
The best way to avoid future growth pain is to make sure that the whole organization lives and breathes change. The organization will have what we call ‘Growth Mentality’.
Creating Growth Mentality always starts with these three steps:
1. Attitude of the WILL to grow – Comes from clear and outspoken will to accomplish something great. A clear ASPIRATION.
2. Behaviour that WILL inspire to grow – Leadership that promotes performers to try out and go outside of their comfort-zone and explore new solutions without feeling that they are stuck in old structure. CHALLENGES will be overcome.
3. Performance that WILL drive growth – Leaders and co-workers in harmony focus on creating outstanding customer experience and all employees willing to go that extra mile. They BECOME something great and new NEEDS emerge that will lead to new ASPIRATIONS.
The wheel of wealth has been created.
Organizations need to unlock hidden capabilities and make them available to the growth process. The growth processes are very different in each of the three categories. The danger is to be trapped as a solopreneur or as an entrepreneur, and not being creative enough and innovative enough. Building for scale is key to thriving in the future.