Is
Your Company Fit for Growth?
Is your company fit for
growth? Many companies today are not. The way they manage costs and deploy
their most strategic resources is preventing the expansion they need. But they
don’t realize it — at least not yet. Meanwhile, facing the global economic
crisis usually the most critical questions behind the line of each single CEO
and business owners who are running medium & large business size,
therefore, thinking of answering this question start from the following lines
stated in this article.
To be sure, many of
those companies are in better financial shape today than they’ve been in for a
long time. Having implemented cost-cutting and austerity programs during the
recession, they have relatively healthy balance sheets and sizable reserves of
working capital. They have strengthened their ability to weather downturns and
improved their productivity in ways that could potentially last for years. All
these restructuring actions were required for survival between 2008 and 2011
But as they shift their
focus from the cost side of the ledger to the revenue side, searching for ways
to move beyond cost cutting — entering new markets, commercializing innovative
products and services, offering more compelling customer value propositions —
these companies are strategically and financially out of shape.
How can you tell if your company is fit
for growth? Here is a simple, three-question diagnostic:
- Do
you have clear priorities, focused on strategic growth, that drive your
investments?
- Do
your costs line up with those priorities? In other words, do you deploy
your resources toward them efficiently and effectively?
- Is
your organization set up to enable you to achieve those priorities?
A successful program to become fit for
growth contains three main elements:
- Set
clear strategic priorities, and invest in the capabilities that allow you
to deliver them.
- Optimize
your costs, developing lean and deliberate practices that will deploy your
resources more appropriately and efficiently.
- Reorganize
for growth, establishing a nimble, well-aligned organization that can
execute your new strategic priorities.
These elements reinforce one another;
when launched together, they provide the wherewithal for growth, even for
companies facing today’s macroeconomic challenges.
To create room for the
new priorities, we looked at our historical investments and either limited or
eliminated many old systems and processes. We redirected that investment into
the new platforms and new capabilities that we needed.
For most companies,
cost cutting in a down economy means across-the-board slashing that
"spreads the pain" of budget reductions across many departments.
While that may sound like the best approach for getting critical results fast
and for limiting political infighting, it is a mistake–one that will leave your
company weaker, not just smaller.
Instead, companies
that need to reduce costs should treat the challenge as an opportunity to
identify and reinforce their key capabilities, while divesting from those
activities that do not truly reflect the business’s strengths or long-term
goals. This more strategic approach will make your company more resilient as
tough times continue and more robust as recovery begins.
Dr.Kayyali Mohamed
BCS CSci,FBCS ELITE
CEO, 4D Business Consulting
