Do You Know What Stage Your Business Is In?
Before you move too quickly into strategy development or major organizational change for 2015, I encourage you to ponder an important question.
Do you know what stage your business is in?
I prepared the chart pictured above as an example to illustrate four possible stages (with hypothetical sales volumes) in which a business might progress over time. Businesses of all sizes and types advance through different stages of growth that require deliberate thought and planning with respect to strategy.
Failure to closely align the strategy of the organization to its current stage of growth will undoubtedly result in underperformance, ultimately putting your place in the market at great risk. In the example above, a growth-stage business that prematurely decides to reduce headcount in a sales function in favor of building efficiencies for expansion-stage will negatively impact its market share in existing markets.
Conversely, the same is true of the organization that fails to staff adequately towards efficiency as expansion occurs to new markets. The strategy is at risk due to the organization’s inability to establish awareness and meet customer demand in new markets. Ideally, this is not the kind of first impression you want to deliver as you move from existing markets to new markets.
In the introduction-stage, an organization has developed a product or service that it’s bringing to a target audience and market. The strategy in this particular stage typically entails a smaller team of passionate visionaries who are aggressively promoting their brand to establish quick traction. The business is structured very loosely and somewhat decentralized, allowing the team the ability to respond to opportunity quickly as well as the flexibility to make adjustments as the learning process unfolds.
As a business gains traction, its primary market, audience and competition for the product or service begins to crystallize. When this occurs, it’s time for the business to begin modifying its strategy to align with the growth-stage. The strategy can more specifically center on deeply penetrating the primary market with increased sales and marketing presence. As the business grows, our talent requirements change. It’s now necessary that we have creative business-builders who can really begin to scale the messaging, awareness and engagement for the products. It’s not entirely out of the question to see organizations bringing close-the-core product innovation to market late in the growth stage (ie: service enhancements, version updates, new colors or variations), although true white-space innovation takes a backseat until later.
Typically, an organization will know it’s time to move into the expansion-stage when they experience their first significant plateau event. Towards the end of the growth stage, businesses will start to press up against the ceiling in the primary market. Commonly, moving into expansion-stage might consist of bringing new products to primary markets or introducing your primary product to new markets. In this example, I suggest that you evaluate a new market move first, as advancing to new product (or category) development requires a more specialized structure and talent profile.
A new market expansion strategy will require some staffing adjustments to become more collaborative and service-oriented to respond to new target audience needs, but you’re in a strong position with a proven, profitable product or service that has been perfected in primary market learning.
In the later half of the expansion stage, organizations might experience increased competition, new entrants, or other external challenges that will often lead to another plateau event signaling the onset of the maturity stage. From the latter half of the expansion stage to the beginning of maturity, organizations must be engaging deeper with their target audience to build an innovation strategy. Bringing new products and services to market (whether expansion to new categories with in-house talent or via acquisition) is vital to your survival.
In general, with strong analytics and an internal growth strategy system that drives the day-to-day business, leadership should be in position to stay in front of the stages, preparing their organizations for a running start through possible plateaus lingering on the horizon. Making the proper changes and adjustments too late in a particular stage can have a lasting impact on your business.
This happens to be one of those unique opportunities – – a chance to step back and ask a few critical questions before dialing-in your strategy for 2015.
What stage is your business is in currently? Have you aligned your strategy, structure, talent and process formula to cater to that particular stage?
If you’re experiencing one of those plateaus referenced above, what adjustments need to occur to blast through it?
What preparations need to happen now in order to be ready for the next stage on the horizon?
If you happen to be working on your strategy for 2015 and you would like to chat further on this particular topic, please don’t hesitate to reach me here. Equally, if you’re interested in building a strong, internal growth strategy system to help you stay “in front” of the stages, please contact me.
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Founder Todd Garreston
With over 15 years of experience leading market share growth initiatives of top consumer brands in Fortune 500 and privately-held business environments, Todd Garretson advises and helps organizations identify new growth potential, craft strategy that moves people to action and enhance overall performance.
Having a passion for helping people and organizations to unlock dormant growth potential, Todd writes and speaks for audiences in three core areas: business growth strategy, leadership and personal / professional growth.
Residing in Atlanta, GA with his wife, Lauri, and their four children, weekends and free time are spent with family, coaching youth sports, and sharing his passion for fitness and nutrition.