I am impressed by Seth Godin and regularly review his blog. Recently I came across a video of him fielding questions at an Open Forum event. An owner manager asks: “How do you build a foundation for scalability and how do I embed the things that made us successful?”
Godin’s response was spot on, which I paraphrase below:
First, ask yourself “Why exactly do I want to grow?” Most attempts to grow lead to negative outcomes. This is partly because you are really good at getting your company to the size it is, but probably really bad at running a large enterprise. More importantly, your customers are not going to be happier when you focusing on building your business rather than them. So ask yourself “why bother?” because you will probably make less money in the short and medium term and may get a lot less joy out of it. But if you do go for growth, do it on purpose. If we are going to add a zero, then work out what are the twelve things you have got to do and plan for those – it will be a tough journey.
This kind of thinking may appear negative, and counter to today’s “entrepreneur as rock star” culture. However, Godin’s response chimes with my experience – I have seen successful businesses fail due to the desire of business leaders to grow rapidly into new areas. And Godin is not alone. The dangers of inappropriate change are articulated by Zook (2007), who urges organisations to ‘focus’, then ‘expand’, and only then ‘move on’, saying “Company after company prematurely abandons its core in the pursuit of some hot market or sexy new idea, only to see the error of its ways – often when it’s too late to reverse course.” For Peters et al (1982), in their influential ‘In Search of Excellence’, one of the eight themes that characterise successful companies is the willingness to “Stick to the Knitting – stay with the business you know”. Treacy et al’s (1995) strategy is set out in the title of their book: ‘The Discipline of Market Leaders: Choose your customers, narrow your focus, dominate your market’. Similarly, Moore (2006) argues that organisations seeking to innovate at every phase of their evolution require disciplined, focussed and systematic approaches, far removed from the ‘instinctive’ approach of many entrepreneurs. Finally, like Godin, Executive Coach Marshall Goldsmith focuses on the different behaviours that are required by different contexts: in ‘What Got You Here Won’t Get You There’ (2007) he says “it may be that the very characteristic that you believe got you where you are – like drive to win at all costs – is the one that is holding you back”.
For me, all companies need to be able to adapt, and the ability to grow is an important capability. The challenge is to have the self awareness that enables you to know your own strengths and motivations – and then to set goals with the appropriate level of challenge and risk. That is why, in my work with owner managers seeking growth and agility, I work hard to help them clarify what they want to achieve, what motivates them, and what their criteria for success are.
Goldsmith, M. (2007). What Got You Here Won’t Get You There: How Successful People Become Even More Successful. New York: Hyperion.
Moore, G. A. (2006). Dealing with Darwin: how great companies innovate at every stage of their evolution. Chichester: Capstone.
Peters, T. J., & Waterman, R. H. (1982). In Search of Excellence: Lessons from America’s Best-Run Companies. New York: Harper & Row
Treacy, M., & Wiersema, F. (1997). The Discipline of Market Leaders: Choose your customers, narrow your focus, dominate your market. New York: Perseus Books.
Zook, Chris (2007) ‘Finding Your NextCore Business’, Harvard Business Review, (April 2007)