Going for growth

In the dream world of Through the looking glass, Alice is informed by the Red Queen, “[here] it takes all the running you can do to keep in the same place.  If you want to get somewhere else, you must run at least twice as fast as that!”

It’s very hard to consciously keep a business in the same place – it’s rather like an air-sea rescue helicopter pilot attempting to keep his machine the same height above a drowning man despite the great rolling swells of the ocean.  Going for a strategy of growth is sensible, if only to ensure the greatest likelihood of continuity.  Growth is natural – it’s part of the scheme of things and, as Giuseppe di Lampedusa says in his great novel, The leopard, even “if we want things to stay as they are, some things will have to change”.

But growth isn’t just change.  It’s not even necessarily change in a predetermined direction (eg, a change of market sector).  There is, quite simply, a sense in which a business grows by increasing the value of one or more parameters by which it can be assessed.  Of course, in our money-obsessed society, turnover, profit, dividends will be parameters which are frequently emphasised as needing to be ever greater.

I was once impressed by a BBC Radio 4 documentary in which a survey had been done of millionaires.  Each of them – and their individual wealths varied widely – was asked “you’re currently worth £x, what would you need to have in order to feel really comfortable?”  Invariably, the answer was twice what they were then worth:  the person worth (I use the word ‘worth’ advisedly) five million said ten;  but the person who was already worth ten million said twenty.

The point is that, given that these people were wealthy through their businesses, they were setting their businesses growth targets which enabled them to take ever increasing amounts from the business.  These were targets which were imposed on the business from without – they weren’t an organic component of the ethos of the business.

So, in setting targets for growth, it is important they are targets which recognise the value to the business of growth.  So, an increase in customer numbers might be good, but perhaps an increase in customer satisfaction would be better for the business.  An increase in directors’ remuneration may be good for the directors (and good for the business inasmuchas it motivates the directors) but perhaps an increase in the wellbeing of the staff would be better for the business.  It is likely, for example, to result in improved customer service.

And, on a more mundane level, growth can be measured in selling to a wider audience, selling more of the same services, selling new services.  Being clear about how you want the business to grow is important – and that has to be determined in the context of what the business, as it currently is, can achieve.