Did you ever consider how much effort, time and money are spent by a company to develop new products and markets, bring a new idea out to customers, or to just increase its existing business with current and new customers?
The actual time, effort, and cost is likely a staggering number. Even today as companies sit on plies of cash for whatever reason, many are still looking to do one thing. Grow. It is a singularly powerful drive, especially once a company has maxed out on cost cutting.
Yet, the equally staggering truth is, most ideas, growth initiatives, innovation research, customer expansion plans, fail. No growth. Nadda. Nothing. A waste of time. Money & resources.
I am not going to quote statistics because the claims of success and failure rates vary widely. Rather, look at your own business’ track record. Honestly, think about all the time, effort, and money spent with little to show for it. Your stats are the ones that really matter.
One common theme we have seen that affects all companies, whether you are best in class or a low growth company, is how a business thinks about growth opportunities. Often the moment you look to grow, gain the excitement and commitment to do it, is the moment you may hurt your chances.
Why? Often really smart people can become too vested in the outcome. This leads to ego based decisions, or biases how they look at growth.
I recall a large company I was working with that wanted to understand why they didn’t have more success with all of their growth initiatives, including acquisitions, market expansions and R&D generated innovations. They analyzed more than 250 such grow initiatives from the past decade that their market analysis team had vetted.
The findings were rather eye opening. Even though all analysts were trained in the same process to vet growth initiatives, only a few of the team members consistently gave the right recommendations. Yet more eye opening was finding management rejected their input consistently, while typically acting on the recommendations of the analysts who consistently gave management the wrong insights and recommendations. In other words, projects from the effective analysts were dropped and ineffective analysts’ projects were embraced and backed to go forward.
Why? Management and the “fair-hair-child” analysts’ own biases, assumptions, and intelligence about what they thought they knew prevented them from seeing the truth within the facts, and what they knew, was the same common view. . Faced with real insights and the truth from the effective “black-sheep” analysts, they choose to act on their own view of the world, rather than see reality. In my view, this is a far more common cause to failed growth efforts than people will ever admit.
Finally, look at the fastest growing companies. None of them knew for certain at the start of the company about the rapid growth ride that was going to happen to them. Sure they were lucky. However, we believe their advantage was their ability to focus on finding the right information, find the truths and reality of the marketplace. Being focused on getting the critical insights they needed to help them make good decisions, ultimately led to their growth.
And if you think about it, those companies who end up growing very fast, often too are the black sheep in their industry.
© Eric Balinski- 2014