How Ambitious are the Goals for Your Practice?

In his previous article, David Molian, of the Business Growth Programme at Cranfield School of Management, identified 10 key lessons learned from working with hundreds of high-performing independent businesses. In this article, he begins with Lesson 1: The drive to grow has to come from within.

Most owner-managers do not really want to grow. In their dreams, perhaps they do, but the majority of independent businesses reach a turnover plateau and stay there. They are — if you like — lifestyle businesses that support the owner and his or her family.

Reasons for not wanting to grow are obvious and well-documented. For many people, growth equates with additional risk. Typical concerns are enhanced indebtedness to the bank, risks associated with innovating products or services and the unknowns of taking on new customers or employees. Research suggests that the biggest obstacle of all is the fear of losing control — being outside the existing comfort zone.

Are these grounded fears? There is no law of business that says you have to grow, and if business expansion is definitely not for you, so be it. But, the business risks that I identified can normally be managed through systematic and careful planning. More to the point, there are some solid reasons why many businesses should consider the benefits of growth. Our research indicates that:

• Larger businesses are typically less dependent on a small number of key customers or employees;
• They are also better at cash control and collection and;
• Strange but true, the owner-managers of faster growing businesses actually seem to work fewer hours and have more fun!

That said, owner-managers who actively want to grow must be prepared to relish a challenge. In particular, they must be ready for:

• Organizational change. Like a child on the path to adulthood, a growing business will pass through different stages of maturity. In the early stages, the founder holds the business in the palm of his or her hand. With time, systems and processes play a greater part, and the founder has to understand where and when to delegate and empower members of the team.
• Stepping back. Solving day-to-day problems and showing others how to do it is habitual behavior for many bosses. While the owner-manager may feel this equals a good day's work, disenchanted employees may feel differently about it. Building a business frequently entails stopping doing things that you enjoy doing (or are used to doing) in favor of doing things that add value for the business.
• Self-development. Growing a business will test your qualities of leadership and take you out of your comfort zone. The rewards from this self-development are both personal and business growth.

Most importantly, a bigger business is more likely to be separable from the owner — and hence more valuable and saleable — in its own right!

In the next article, we will look at how successful businesses use planning to help them achieve their goals.

David Molian is codirector of Credo at the Cranfield School of Management, Bedford, UK. He may be reached at d.molian@Cranfield.ac.uk; +4401234 751122; or +44788 0793849.