Growth Challenge: Land of the Lost
When your company has become to comfortable with its market-share
and has lost its drive.
When your company has become to comfortable with its market-share
and has lost its drive.
In this world you’re either growing or you’re dying, so get in motion and grow. - Lou Holtz |
Stability is an illusion in business. A company is either growing or in decline. Some may debate this because they believe a plateaued business that Operates efficiently and profitably equals a stable successful business. They see their business, year-over-year, have slight dips or slight gains and chalk this up to the economy or fluctuations in their industry. They are comfortable with their position in the market, the revenue generated and the belief that they have enough share of the market to sustain their business. These companies are described as being content… we might say naive.
Some leaders of these types of companies allow a business to operate this way because it satisfies their own economic goals or provides the necessary value shareholders seek. They may have an exit strategy in place or are trying to ride the success of past investments, markets penetrated and innovations previously developed. Unfortunately today, with the ease by which new companies can enter a market and technology can lower the cost to launch an idea, any company that believes being plateaued is secure is actually vulnerable.
Without knowing it, these companies have placed a large target on their back that aggressive companies, startups and innovators see as a chink in the plateaued company’s armor. If these three opportunists are successful they will acquire the spoils that will enable their growth to occur… the plateaued company’s customers. In doing so these opportunists will also cause a plateaued company to scramble for a way to get out of what will ultimately be a sharp decline. Often the larger the company the more difficult it is to react to one of these opportunists, leading to a negative outcome.
Some leaders of these types of companies allow a business to operate this way because it satisfies their own economic goals or provides the necessary value shareholders seek. They may have an exit strategy in place or are trying to ride the success of past investments, markets penetrated and innovations previously developed. Unfortunately today, with the ease by which new companies can enter a market and technology can lower the cost to launch an idea, any company that believes being plateaued is secure is actually vulnerable.
Without knowing it, these companies have placed a large target on their back that aggressive companies, startups and innovators see as a chink in the plateaued company’s armor. If these three opportunists are successful they will acquire the spoils that will enable their growth to occur… the plateaued company’s customers. In doing so these opportunists will also cause a plateaued company to scramble for a way to get out of what will ultimately be a sharp decline. Often the larger the company the more difficult it is to react to one of these opportunists, leading to a negative outcome.
Companies who have plateaued often operate in a place called the “Land of the Lost.”
Signs when a company may be lost.
In the early stages of a company’s growth, specific goals are defined with the purpose to achieve a stable business. These companies are hungry, ambitious, risk taking and above all may be a little green to the difficulties of what they are facing. This gullibility often enables them to avoid the dreadful “Analysis Paralysis” that established companies often face as they try to maintain their base while over assessing what to do next. So these early stage companies go for it and often try without knowing the pitfalls that they may face. This is good so they can act quickly but also bad for budgets wasted on failed ideas. There must be a happy medium to avoid paralysis and lost dollars from ideas not vetted.
When these early stage companies overcome their hurdles and have established enough revenue to support the operations year-over-year a sense of accomplishment sets in. All the hard work, stressful nights and persistence have paid off. It’s not unlike a person who lets out an exhaustive exhale when they have reached the end of a race. A sense of comfort sets in and the company basks in the light of what they have achieved.
This is also a moment that can define the company’s future behavior. This comfort can be so intoxicating that it reduces the level of ambition that existed when the company was at its tenuous beginning. This comfort often creates an act of fortification where companies spend more time protecting what they have achieved versus exploring new avenues for additional success. In the end this comfort is the reason why many companies in the middle market plateau because they’re satisfied with their spoils and believe maintaining them is sufficient. Its not until their spoils are at risk that they panic placing their company on high alert, which is often too late and operational cost cutting (layoffs) is required to plateau them again.
In larger established companies, while becoming too comfortable can factor in it’s status quo, these businesses often face a completely different challenge…their size. As they grow and expand their size can impede their ability to drive new revenue streams. They are more calculated when taking risk, debating their market position or if public, maintaining shareholder value. Even worse, they may be far less foresighted than they were in the beginning, focusing more internally on themselves rather than externally on the customers they have and the ones they will need.
Some as stated earlier suffer from “Analysis Paralysis” where they spend more time assessing where to expand versus actually putting forth the effort. When this occurs and by the time they make their decision they are often late to the game. Their competitors have already established recognition and adoption from the customer. The company’s decision to enter a new market, acquire a business enabling new offerings or introduce a similar product blends into the background and these efforts are for naught.
Stagnation possibly caused by being overly comfortable or because the company has allowed its size to dictate its direction, is a telltale sign they are in the Land of the Lost.
When these early stage companies overcome their hurdles and have established enough revenue to support the operations year-over-year a sense of accomplishment sets in. All the hard work, stressful nights and persistence have paid off. It’s not unlike a person who lets out an exhaustive exhale when they have reached the end of a race. A sense of comfort sets in and the company basks in the light of what they have achieved.
This is also a moment that can define the company’s future behavior. This comfort can be so intoxicating that it reduces the level of ambition that existed when the company was at its tenuous beginning. This comfort often creates an act of fortification where companies spend more time protecting what they have achieved versus exploring new avenues for additional success. In the end this comfort is the reason why many companies in the middle market plateau because they’re satisfied with their spoils and believe maintaining them is sufficient. Its not until their spoils are at risk that they panic placing their company on high alert, which is often too late and operational cost cutting (layoffs) is required to plateau them again.
In larger established companies, while becoming too comfortable can factor in it’s status quo, these businesses often face a completely different challenge…their size. As they grow and expand their size can impede their ability to drive new revenue streams. They are more calculated when taking risk, debating their market position or if public, maintaining shareholder value. Even worse, they may be far less foresighted than they were in the beginning, focusing more internally on themselves rather than externally on the customers they have and the ones they will need.
Some as stated earlier suffer from “Analysis Paralysis” where they spend more time assessing where to expand versus actually putting forth the effort. When this occurs and by the time they make their decision they are often late to the game. Their competitors have already established recognition and adoption from the customer. The company’s decision to enter a new market, acquire a business enabling new offerings or introduce a similar product blends into the background and these efforts are for naught.
Stagnation possibly caused by being overly comfortable or because the company has allowed its size to dictate its direction, is a telltale sign they are in the Land of the Lost.
Sharpening the corporate machete.
Getting out of this lost land can occur several ways. The first is to improve operational dynamics that exists in the teams who are responsible for growth. One approach may require these teams or employees to be removed or reconfigured in terms of their responsibility. If a company is lost it can very well be a result of the internal processes, behaviors or motivations of these teams that are operating against the objectives to grow. Its one thing to establish a metric for a team to hit, a company to reach and the market to allow, its another to actually enable a team the ability to achieve it. Companies, especially those struggling to grow or are in decline, are great at setting the bar for what they want, allowing panic to provide clarity. Few understand what is truly needed to achieve it. The manner by which the business operates will enable that metric to be hit or missed.
While a goal or numerical number for growth is necessary for the team to understand what they are trying to achieve, leadership must evaluate whether those in the role to achieve it are capable. The most important attribute that helps a team and company get out of a lost position is their ability to look outward. If a team focuses inward, uses its own opinion and past history to grow it is setting itself up for failure. Look out enables a company to see what is needed in the market. Look out enables a company to see innovation happening in non-competing industries that can be leveraged in their own. Looking out is not maintaining the business or being comfortable with its stability, it is challenging assertions and establishing new lands.
If a company doesn’t spend enough time talking to customers, understanding prospects’ needs, watching for new innovations and keeping an eye on the small startup that has spark, it will likely suffer. Getting out of Land of the Lost requires a market view mentality that must always be practiced to remain ahead. From this new product ideas are formed; companies right for acquisition show themselves in a timely manner and employees think differently with a hunger for the next challenge.
Embracing the idea that comfort can lead to decline and discomfort drives best thinking while positioning the company to a more successful future is key. When a company becomes comfortable, fat and proud of itself it often is ripe for a competitor with a bigger appetite to take bite.
If your company has plateaued or you know is lost and past efforts to improve your market position failed, we can help. We may start internally at improving your team’s mind-set by looking externally at new market opportunities or find ways to reposition what you sell to new customers. In every situation we will work with your teams to take an outward view approach to determine what are the best opportunities that fit your company.
While a goal or numerical number for growth is necessary for the team to understand what they are trying to achieve, leadership must evaluate whether those in the role to achieve it are capable. The most important attribute that helps a team and company get out of a lost position is their ability to look outward. If a team focuses inward, uses its own opinion and past history to grow it is setting itself up for failure. Look out enables a company to see what is needed in the market. Look out enables a company to see innovation happening in non-competing industries that can be leveraged in their own. Looking out is not maintaining the business or being comfortable with its stability, it is challenging assertions and establishing new lands.
If a company doesn’t spend enough time talking to customers, understanding prospects’ needs, watching for new innovations and keeping an eye on the small startup that has spark, it will likely suffer. Getting out of Land of the Lost requires a market view mentality that must always be practiced to remain ahead. From this new product ideas are formed; companies right for acquisition show themselves in a timely manner and employees think differently with a hunger for the next challenge.
Embracing the idea that comfort can lead to decline and discomfort drives best thinking while positioning the company to a more successful future is key. When a company becomes comfortable, fat and proud of itself it often is ripe for a competitor with a bigger appetite to take bite.
If your company has plateaued or you know is lost and past efforts to improve your market position failed, we can help. We may start internally at improving your team’s mind-set by looking externally at new market opportunities or find ways to reposition what you sell to new customers. In every situation we will work with your teams to take an outward view approach to determine what are the best opportunities that fit your company.