If you’re a business leader of a high growth company, one of your biggest worries is probably how to sustain your success. Following multiple years of 30% growth, only growing by 10% may feel like failure. Your priorities and strategy remained the same, so why did your growth rate decline? Ironically, therein lies the answer to the question. It’s important to constantly review your focus.
The factors underpinning a company’s revenue growth from £100m to £150m are often different to those that enabled your growth from £50m to £100m. It can be hard to want to review your strategy when the company is performing so well. The age-old wisdom of “if it ain’t broke, don’t fix it” unfortunately doesn’t help companies that are looking to sustain high growth.
There are four things you can do differently to your competition to successfully sustain your growth.
Create new market conditions
A good strategy isn’t just about responding to market conditions, it’s about boldly aspiring to create new market conditions. During the peak of the 2008 financial crisis, millions of people lost employment and significantly reduced their spending on non-essential goods and services. As a result, several companies that depended on day-to-day consumer spending went under. Launching a company whose business model hugely depended on consumer spending seemed foolish. But against all odds, Groupon was born and successfully grew to a $500 million profit company with two years1.
How did they manage to do that when the market conditions suggested otherwise? They created new market conditions, in which the careful spender was offered a deal a day that saved them money and seemed too good to not take advantage of. The customers could get more for less, maintaining a good quality lifestyle with lower income. Businesses who sold through Groupon also managed to survive the recession. Win-win overall.
Create a need where none exists
You don’t always have to respond to a market need to do well – innovate and create a need where none might exist. Before the iPad was launched, did you think that you needed a touch screen, almost laptop-sized device? Apple invented a game-changer that created a whole new tablet industry. The way we use social media today is another example of how certain companies created products that connected individuals and groups in ways they had not consciously realised the need for, just a decade ago. Be an innovative company and don’t be afraid of developing products and services that may not have an obvious need in the market.
A good place to start would be to ask your employees how encouraged and incentivised they feel to trial new ideas. Have you inadvertently created bureaucratic structures that prevent or limit innovation? According to a survey conducted by a big 4 consulting firm, 78% of millennials want to work for a company that encourages innovation and creative thinking, yet most say they’re not getting this at their current company2.
At Gate One, we constantly encourage our consultants to think differently when solving client problems – we even encourage our consultants to think about new ideas and launch their own start-ups through the Gate One Incubator. These qualities in our consultants set us apart from our competitors and directly benefit our clients.
Disrupt the market
Cause disruption to the market and ensure early adoption. In 2000, Reed Hastings, the founder of a fledgeling company called Netflix, proposed a partnership with Blockbuster. The idea was that Netflix would run Blockbuster’s brand online and, in return, Blockbuster would promote Netflix in-store. Hastings was laughed out of the room. In 2010, Blockbuster declared bankruptcy and Netflix is currently worth approximately fifteen times3 what Blockbuster was worth at its peak in 19944.
Companies can set disruptive trends through the diffusion of ideas model proposed by Everett Rogers in the 1960s. While innovators are the out-of-the-box thinkers, the early adopters (first 13.5%) are critical in determining the disruptive power of an idea. To sustain growth, you need to continually disrupt and continually nurture your early adopters.
Invest in your talent
Continuously find top talent and invest in your staff members. Companies such as Expedia, ARM Holdings and HomeServe have all sustained strong revenue growth in their sectors and were voted as the top three companies to work for in the UK by the Telegraph5. Gate One recently featured on the list of LinkedIn’s top 25 hottest start-ups to work for and we have been growing at approximately 50% year-on-year since inception. Richard Branson summed it up best as, “Clients do not come first, employees come first. If you take care of your employees, they will take care of the clients.”
At Gate One, we are experienced at creating a deliverable strategy for your continued growth. If you want to learn more visit our Making Strategy Happen webpage or contact one of the team.
1 5 businesses that survived the recession and why | Business 2 Community
2 Best examples of company cultures that engage employees | Impraise
3 Netflix’s market value drops $26 billion in a week | Forbes
4 Blockbuster Bankruptcy | Fast Company
5 Do you work for one of the 25 best companies in Britain? | The Telegraph