Barriers to growth and scale are not unique but common to virtually every business, an academic has said, while outlining how one business trebled in size by addressing one common problem.
Dr Jana Matthews (pictured), head of the Australian Centre for Business Growth at the University of South Australia, told My Business that, for the most part, the challenges facing business owners to scale is the same regardless of their industry or geographic location.
“The problems of growth are endemic. It doesn’t matter [which industry you’re in]. The issues are understanding the stages that the company goes through as it grows — just like a child grows, it experiences stages of growth,” she explained.
“The CEO has to change the way he or she leads and manages, just like parents have to change their parenting styles when the child goes from being a baby to a toddler to school age to a teenager.”
According to Dr Matthews, this growth stage presents businesses with the same fundamental challenges to overcome.
“The issues are how do I find the right people? How do I manage and meet them? How do I figure out who the best customers are? How do I understand my finances?” she said.
“That’s the thread that pulls through all of business.”
Identifying the next phase of growth
It can be difficult to identify exactly where the business currently fits into the growth phase, particularly when working directly within it. But Dr Matthews said there tends to be one clear indication that the business is ready to go up a notch.
“It’s definitely, ‘I’m doing all the things I used to do and they don’t seem to be working anymore, and I don’t understand why it used to work but now it doesn’t’,” she said.
“‘So, should I do more of that or what is it that I need to do differently? I just don’t know’. That tends to be what we’re finding.”
Breaking down barriers to growth
Of course, identifying the growth cycle is only one part of the challenge — the rest comes down to actually delivering the next phase for the business.
And Dr Matthews said that in many instances, it can be the business owner themselves who is unwittingly inhibiting expansion and scale.
“The CEO [often] thinks that they need to be the front of all wisdom, that they need to tell everybody what to do because that is their responsibility as a leader: To instruct people and identify that best way and then have everybody follow that path... That’s the model called the genius with a thousand helpers,” she said.
“But that doesn’t enable you to grow.”
What the business really needs from its leaders is an understanding of the skills and requirements of the business and best meeting those needs, generally through delegating to someone else with that knowledge and skill set.
The next challenge, according to Dr Matthews, revolves around the vision and goals for the business, and having them shared by everyone working within it.
“[Owners and senior management] have to bring them along and together decide, this is why we do what we do. This is our why. This is our mission. This is our reason for being. This is why we exist,” she said.
“People that we are going to recruit, they have to understand they’re going to join a company that’s doing this for these reasons. These are the values in terms of our terms and conditions under which we do business together.”
‘We are three times bigger’
Dr Matthews cited the recent example of business in Darwin she had worked with, around aligning its vision.
“They said, ‘We can’t tell you the power of getting us all on the same page going after the same plan [and] already we are three times bigger in terms of our revenue than we ever expected to be — than we had planned to be — just because we were in total alignment and saw the opportunities, agreed on the opportunities, went after [them]. And the rest is history, hopefully.’”
Importance of self-awareness in business
As well as skills and knowledge — and ensuring the most qualified people are utilising them — self-awareness on the part of the business owner is another critical factor for businesses to be able to grow unencumbered.
That means looking at one’s own skills and knowledge from a rational, rather than emotional, point of view, to ensure the business is getting the best from its owner, not just its employees.
And a big part of this, Dr Matthews explained, comes down to “interpersonal dynamics”.
It can be the case that leaders feel they are communicating well with their staff, but others can have a very different take on this, such as seeing the business owner as a benevolent dictator and not a facilitator.
Generating such honest feedback requires a great deal of trust, she said, to “give people permission to talk about issues that are difficult”.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.