Organisation growth strategies come in many forms and understanding the drivers for growth is a key element. In addition effective and successful growth strategies require an understanding and plan to address every relevant aspect of the organisations functioning before the actual core growth strategy is selected and implemented.
Drivers for growth
Whether your organisation is a commercial or non-commercial organisation you need to identify those drivers for growth and ensure that there is a sustainable growth path for the organisation, some examples of growth drivers are as follows:-
- The stock market and investor need to see increasing revenues and profits
- A new technology or Market emerges that can be addressed to scale the business
- The expansion from a local/regional organisation to a multi-regional organisation
- The winning of a significant new contract
- The changing of a business model to allow a business to scale
- The setting up of a new role or function in an organisation
- The receipt of investment to allow the organisation to grow
- A significant shift in environmental conditions such as recession (E.g. unemployment up, therefore growth in demand from social welfare entities)
- A major international disaster such as an earthquake requiring the scaling of an NGO in a region.
These are just a few examples
Capability to grow or scale
Every business operates in a context and structure that can either facilitate or restrict growth, this can be as simple as the acquisition of external resources to the flexibility of internal systems to change to allow growth.
It is essential that leaders and change managers understand the forces for and against change they are likely to encounter in growing the organisation. There are many considerations, here are just a few:-
- Access to raw materials
- Access to skills
- Current Performance
- Current Skills
- Current process and business model
- Cultural (Native and internal)
The two big ones we think of are Organic growth or growth by acquisition. Organic growth is centered on the current organisation and leveraging its current resources and capabilities to draw in the new resources and integrate them into the current and/or evolving systems. Organic growth has many advantages it tends to be lower risk, it can preserve the values and assets of an organisation to a higher level, and it engages current staff directly in the process. However organisation growth can be slower and can be more difficult to manage especially if international growth is being considered. Acquisition however is often seen as a way to speed up the process of growth and over the longer term in certain circumstances can be more cost effective. Acquisition drivers can vary as a component of an acquisition strategy, for example:
- Acquire a very similar organisation in the same or similar space to expand reach/capacity
- Acquire an organisation for their capacity/skills to enable some component of the growth strategy.
- Acquire an organisation for its Intellectual Property (Products/Services) to enable commercial growth into new Markets
- Acquire an organisation to neutralise competitive threat
- Acquire an organisation to establish quickly in a New Market or Segment
When we consider growth strategies, drivers and the business dynamics that must support the growth strategy, what we see is there will always be change and change has to be managed.
Some Growth strategies that may be considered:
- Make , Buy or Rent
- Merger & Acquisition
- Partnering (Resource, Channel, Technology etc.)
- Spin out
Where HOMI fits in growth strategies
HOMI is an ideal tool to guide leaders and managers in understanding the capability to grow/scale and to create the readiness to ensure the growth strategy executes effectively and efficiently. Carrying out an organisation assessment/diagnosis provides information to management that they would not previously have had access to. By understanding at and organisation level and a unit level all core organisation dynamics management can identify potential barriers and potential supports for change and growth. Interventions can be taken in advance of main investments and change programs that ensure the successful implementation of a growth strategy. During the execution of the growth strategy management will have tools to benchmark and measure progress. Of course the bottom line KPI’s are the primary metrics that indicate successful growth strategy implementation but having underpinning systemic metrics allows rapid calibration to maximise growth.