The economy is picking up. Are you ready?
The economy is picking up and it is a perfect time for the forward looking firm to ensure its house is in order. It’s tempting to go for growth to offset the financial strain of the last few months or years but this lone focus could be damaging. Optimism built into strategies of a flexible robust firm can catapult it well ahead of its competitors, whilst built into a firm without firm foundations can be a recipe for disappointment (at best). There is a process that all successful firms go through and it seems to match sales levels.
When a firm is under $10 m of sales, the combination of cash pressures and testing the market to find out what works will entice the firm to put all its effort into growth. However effort spent in getting the organisational habits right will pay off longer term.
At $10 million the attention of the executive will switch to internal to get the things right which could have been attended to earlier, whilst effort spent looking internally is important: Pressures from competitors becomes greater, margins tighten and profits are hard to get. A strong value proposition is now needed to strengthen its competitive advantage. It is a time when internal focus is important but external focus is primary.
At $50 million there is greater stability and the temptation is to focus on the big picture. The detailed analysis of the next 90 days can lose attention. But a ship takes longer to turn than a boat and looking ever forwards can hide the rocks up ahead.
This growing optimism will tempt firms into growth mode. This needs to be married with internal improvements. The business cycle never sleeps. The firm too must stay awake.
It is time to invest in uncovering waste and weaknesses not only in going for growth.
By Jennifer Bishop Bishop Business Solutions