Building Company-Growth Momentum: New Way to Manage Your Business

by James B. Hangstefer

With the Y2K threat behind us, the outlook for small businesses is bright. Low cost, powerful technology and the Internet offer unlimited opportunities for both existing "bricks and mortar" and virtual businesses. Small companies normally benefit when there is rapid change in the marketplace; larger businesses move more slowly because of their hierarchical structure and complex decision-making processes. Although large businesses will be strong competitors, as they have always been in the past, they will also open many market niches that small businesses can exploit.

What overall conditions will exist in the marketplace in the foreseeable future? The rate at which change in technology and the marketplace takes place will continue to increase. The growing economy will produce even more scarcity of top talent than in the past. This will make hiring more costly and much more difficult. As a fact of life, recreating success for your business will be a challenging task, one you will likely have to conduct routinely. Both enthusiasm and caution will be essential ingredients. As always, hard work and good ideas will be basic. What's new, however, will be the need for you to build growth-momentum for your business at a rate that will keep pace with the rapidly changing outside world. Building growth-momentum means stimulating ongoing innovation at a rate that is set by your marketplace. Your business may become obsolete if you don't to this.

Building company-growth momentum requires thoughtful insight and perhaps new ways of leading and managing your business. The management principles set down by Peter Drucker over the past five decades are still the foundation for successful results in every business; but your company's operating environment has to be integrated more fully into the new reality that things happen at "Internet speed." An example: More e-mail was sent in 1998 than all the first-class letters handled by the U.S. Post Office that year. E-mail continues to proliferate, as does the number of people using the Web for e-commerce.

In this new, technology-driven economy, there are no conventional "rules" or "checklists" that you can follow that will insure success. Breaking the rules of conventional wisdom today may be the best path to the future. Flexible strategy and opportunistic tactics are becoming more and more important to sustain growth momentum.

The first step toward momentum building is to look carefully at how strong your company is in the five fundamental need areas, noted below, for every business. Then look for ways to strengthen each area.

• Astute Core Strategy
• Organizational Vitality
• Market-Position Strength
• Productivity Gain
• Financial Performance

Keep in mind that organizational vitality -- the competence, ideas, actions and energy of people -- is the engine for business growth. Particularly important is to help present staff and new hires grow in capability and contribution to company success. Are they self-starters with the capability to innovate? Do they learn rapidly? Are they enthusiastic about their job? Is your company's culture one that encourages innovation? Are you too imperious in dealing with your people?

Your business has to be highly attractive to keep your key people contributing at a high level. They will need to see personal growth opportunity for themselves and freedom to act on their own if you expect to keep them satisfied and productive. The processes people work within are also important. Cumbersome, inefficient processes always depress morale and discourage people from making their best efforts. Analyzing your present organization is a necessary step to see if everyone (and the processes they work within) is prepared for building company-growth momentum as a part of their job. Momentum building means changing the company in ways and at a rate that keep it in a leadership position in the chosen marketplace. This is how you consistently recreate success. Remaining stuck in yesterday's ideas is a sure path to future trouble.

As the areas in a company that need strengthening are continuously changing, so too is the necessary rate at which strengthening has to take place. Innovation will have to be a core competency for your company if it is to be a leader. There is no endpoint for momentum-building, only milestones on a path that can have frequent changes in direction.

Leadership in every successful company is focused on a constantly improving standard for marketplace performance. Astute leaders are very much aware of the necessity to "run scared" and to work continuously toward upholding company strengths while building new ones. They take the best ideas, from whatever source, and adapt them for their needs. Their businesses are bodies in motion with momentum continually arising from the force of innovation and energy. They have articulated clearly the ambition, mission, values and "unity of cause" for their companies, and their employees both understand these guidelines and integrate them into their everyday actions.

Forecasting the future is not possible beyond the assumption that it will be different than what we see today. History can teach us but it should not be our guide. Growth is not necessarily measured in revenue or market share. Market-position strength and financial performance are the more vital considerations. It up to each of us to constantly reinvent our own company's future by taking advantage of the opportunities that will abound for small businesses in year 2000 and beyond.

James Hangstefer is author of: Creating and Sustaining Company Growth: An Entrepreneurial Perspective for Established Companies (Burton-Merrill Press, 1997). His career spans four decades as an entrepreneur, a CEO, investor, and a director of seven companies, one for 33 years, including development of a successful fine wine import business. He is currently president of Cordel Associates, Inc., Waltham, MA. More information is on the Web at the Business Growth Resources Center. His book is available at 1-800-255-2665 and at Amazon.com.