Common Growth Problems Among Businesses
Companies of all shapes and sizes watch as the growth of their business slows down, then gets stuck. There is an opportunity to turn around the situation, with a collaborative action plan. It’s essential to determine where and why you are taking on water. Perhaps a new competitor entered the market, enthusiasm is slowing among repeat customers, or your company’s stated benefit is no longer relevant. There could be a deceleration in organic growth, or additional usage and occasions have changed. What’s clear is that what got you to where you are most likely will not get you where you want to go!
Businesses often try to address growth issues by cutting back on spending, or milking the company/product/service to maintain or get more profit out of declining revenues. However, this strategy becomes a self-fulfilling prophecy; the only direction you can go from here is continued—or accelerated—decline. It is not a viable, long-term way to address organic growth or loss of market share.
As a doctor seeks to understand the challenges of a sick patient, they ask questions and observe behavior. They review options to treat to identify the actions that will most likely optimize and accelerate a return to health. To turn around the business, you’ll want to diagnose how you got into the situation—and what has changed—before you begin tackling the turnaround of the business.
Understanding the Problem(s)
Start by understanding which changes have resulted in the declining sales. There is a three-step process to diagnose and address the business problem:1. Gain internal insights from stakeholders, distributors, or other intermediaries. You should include comments from marketing, sales, R&D/development, finance, and the leadership team, at the very least. Develop a list of questions that will elicit more than a ‘yes’ or ‘no’ answer, and refine the questions as you gain insight.
Here are some possible questions to ask your internal team, to get you started:
2. Work with your cross-functional team on obtaining external insights. Use those as a jumping off point for assessment. You’ll want to talk with customers and end users with a consistent list of questions designed to get at the core of how they perceive your organization, product, or service. Customer input can come from one-on-one interviews, done in partnership with your sales contact. If possible, you may want to talk with former customers, who may be happy to spend a little time giving feedback, either to a member of the company or an outside resource. If you have the resources, the best way to source consumer insight is with focus groups, followed by quantitative research to get an unbiased, measurable prioritization of opportunities.
Importantly, no matter how you get your information, be sure you start with gaining an understanding of the relative priority of the attributes’ importance in the decision making process. If you excel in an unimportant area, you may have identified an area where costs can be reduced without negatively impacting customer/consumer choice. This will also enable you to focus your message to talk about things important to your customer. Distill the notes down to key insights and opportunities.
Ask these questions to your external audience to obtain user/customer/consumer insight (tailored to your company):
With each set of questions, you are diagnosing the key issues, including:
This process will help ensure you are addressing the areas that should have the greatest impact on results and can be replicated for any business and over any lifecycle in order to successfully deliver your company a life-reviving second chance.
When I joined a company as part of a turnaround team, the first thing I did was partner with the sales lead and meet with each key internal stakeholder, and each top retailer, to hear what they had to say. We heard that the internal teams felt like the previous management just didn’t care about the company, and didn’t support initiatives developed by the team. From a customer standpoint, we were amazed to find out that the product was on the verge of being discontinued, or was being taken off the promotion schedule and reduced on shelf. Just the act of showing that we were interested got us a reprieve, to show what we would do as new management, buying us a little time to develop and implement a turnaround plan.
With a concerted, collaborative effort, you can revitalize your business and return to profitable growth.
Need help to get your business back on track? Chief Outsiders can jump in and help lead an analysis to gain understanding of where the issues lie that are holding you back from growth. Contact me at email@example.com to talk about your situation, and how we can help.