This is one question facing business leaders year after year. There is a tag line going around amongst consultants “growth is vanity, profit is sanity”. It rolls easily off the tongue and has an element of truth - particularly amongst privately owned businesses who can sometimes overextend themselves. However, if the business model is correct and the sales and marketing engine is working, then growth and profit can both be achieved.
In the Mindshop 2019 Business Leader Report the fourth insight is that the business leadership community is split down the middle on this question.
Consistent year-on-year growth can be exciting but without the right kind of attention, problems can arise with: talent retention, change fatigue, declining profitability and the suitability of existing systems and processes.
On the other hand, continuing business as usual with little or no growth can develop levels of complacency, gradual decline, the gradual drifting of top talent to other organisations and the risk of simply being left behind in a competitive market.
What we typically find is that successful leaders manage "step change" growth. Periods of strong growth followed by periods of consolidation in which modest growth is still maintained.
The leadership development challenge is to identify which areas to focus on. The obvious areas are:
- Growth strategies
- Profit strategies
- Sales strategies
- Consolidation strategies
One thing that we do know is that businesses need to consistently work hard to retain customers and their existing revenue base. Sales teams need new strategies and methods and there needs to be an ongoing focus on managing profitability even in difficult times.
How do you think you are doing?