Sustaining growth is not straightforward in today’s economy. Companies must rapidly and continually reach out to new markets with better products, all while supporting their current customers more efficiently than ever before. They must be proactive, rather than reactive.
What’s different now compared to even 5 or 10 years ago? Mobile and Cloud technologies have created new business models which has lead to numerous consequences:
Corporations are not prepared enough for extensive regulatory requirements and the increased speed of technology.
So how can they sustain growth? Here are 5 key ways:
BPI focuses on working more efficiently, operating faster or producing more cheaply by streamlining activities. This will not only add value to your current offering (better, faster, cheaper), but will also free up resources to apply to new growth areas. Some examples of BPI include Six Sigma, Lean Management, Agile Management, Kaizen, Design Experiments and Process Excellence. While popular in the 1990’s, by today most companies have already realized what BPI has to offer.
To scale means to do more of what you are currently doing. Ie. selling more products or services in your current market(s). To be able to scale effectively, you will need the right infrastructure. A company must consider the ability of its current leadership team(s), business (ICT) systems and pricing models to handle the increasing pressure of potential fast growth, and it’s important to have a solid strategy in place coupled with the ability to execute.
At a certain point, your products/services will have saturated their current market, whereby it’s time to consider new markets and innovations. This can be done either organically or inorganically.
Strategic acquisitions are usually made to acquire a new geography, customer segment, new product/service or new capabilities. It is important to consider synergies and corporate culture fit when reviewing possible targets. As most mergers fail to create value, primarily due to improper culture fit, these acquisitions are done best initially on a smaller strategic scale. You can read more on why acquisitions fail in this article by Business Insider.
To innovate is to develop entirely new and improved products and services to meet rapidly changing customer or consumer demands and needs. (Eg. a new business model, service, diversification, new customer set etc). Innovation systems, dedicated teams and top level buy-ins are critical to performing in-house innovations. Today you will also need to make use of predictive analytics, big data and digital strategies.
If you are an early stage company without a sufficient cash surplus, you may also need to raise growth capital in order to grow your business and expand abroad. Growth capital is obtained through angel investors (seed capital up to ~ €1m), Venture Capitalists (~€2m – €50m), or Private Equity firms (< ~€ 50 m+), depending on the stage of your venture and capital requirements.
It’s not all that simple, of course. The above growth methods are continuously evolving. As you scale or innovate, you will need to consider business improvements. And when you acquire a new company, you will need to focus on achieving efficiencies through synergies.
This formula will help any leadership team keep apace in today’s disruptive economy. Overall, it’s good to focus on creating a continuous flow of s-curves – new products, services or acquisitions to scale within systems of constant innovation. If your company can not accept the failure that often comes from developing entirely new products and services, you just may need to buy your innovation.
Kim Oreskovic is a partner at Antler, a global startup generator and early stage VC. Kim leads Antler’s capital raising process in Amsterdam and ensures every co-founding team understands the best approach to fundraising. She brings together her expertise in fundraising and corporate innovation to boost the local startup scene. Apply to be a founder at Antler today and help build the next wave of tech.