Do you have a sound growth strategy?
Getting Your Framework for Growth in Place Today
Growth is a strategic issue; it is willed, not wished. For example, 59 percent of the 2002 Inc. 500 CEOs said their industry had been growing slowly or not at all in the past five years. Coming from a unique group of CEOs, where the average five-year growth rate was 1,521 percent, prompts this question: “How did they do it?”
We also looked at data from the Inc. 500 class of 1985, whose average annual percentage of growth from 1984 to 1994 was 23 percent, or 3.8 times the rate of growth for the U.S. GDP of the same period. Our conclusion is that they strategically planned for growth to occur.
Recall BEA Systems, which claims the distinction of being the fastest software company to reach $1 billion in revenue. According to co-founder Bill Coleman, “It’s not magic. It is all about an addressable opportunity, great people, focus, and execution.”
Douglass North, a Nobel Laureate in economics, said, “Organizations evolve in a way that is no more predictable than the evolution of science and technology.” Even with this in mind, we can find some lessons to share from the launch and transition of Netscape. Netscape generated $80 million in sales in its first full year, and in three years reached $500 million. For comparison, Microsoft took almost fourteen years to reach comparable revenues.
The five key lessons from Netscape’s meteoric growth are:
– 1. Create a compelling vision of your complete product.
– 2. Hire and acquire managerial experience in addition to technical expertise.
– 3. Always consider how you can gather and allocate your critical capital resources for building a big venture while organizing like a small one.
– 4. Manage through continuous decentralization, which means breaking the organizational structure into smaller, flexible, and creative groups.
– 5. Continuously build external relationships to compensate for limited resources controlled internally.
Now is the time to map out a growth plan for the upside. Take time to go off-site with your venture team to discuss. Prepare a growth strategy. The key to successful growth is establishing clear goals and objectives that are matched with organizational skills, but at the same time, always being prepared to adapt to changes and opportunities in the markets and overall business environments.