Seven uncommon characteristics of business growth
If you had to define the primary measures of business growth what would they be? Higher net profits and greater market share? Or perhaps increased customer satisfaction and higher brand value? Certainly if you were looking to determine the commercial viability of a business, then any one of the above metrics would be very good indicators of growth.
Notwithstanding, we know that a business is a much more dynamic and multi-faceted construct than its balance sheet and quarterly results would suggest. As such, there are other equally meaningful measures of ‘business growth’, ones that offer a slightly more nuanced and less obvious perspective of the direction in which a business is travelling. So, what are these metrics and what sorts of insights do they offer? Well, set out below are seven uncommon characteristics of business growth.
1. Effective utilisation of organisational memory
One of the most valuable and transactable assets that any business possesses is its knowledge. These days it is even suggested that knowledge (specifically data) has a greater value than gold. However, by itself, organisational knowledge is of limited value without the organisational memory (ie: habits, behaviours and ways of working) to process it. The particular importance of memory is two-fold; in the first instance it enables an organisation to retain the valued knowledge that it has acquired over time. Secondly, it serves as the most effective way in which knowledge acquired and retained can be recycled or re-purposed for future use. Retention of valued knowledge empowers repetition and repetition of what works produces sustained results. As such, the role of organisational memory as one of the most important characteristics of business growth, cannot be understated.
2. Willingness to circle back to the beginning
In almost every circumstance, the decision to go back to the beginning or ‘back to square one’ would be a sign of complete and total failure. However, it is in reality one of the best signs and measures of organisational growth. The reason for this is that the courage to start from the beginning in order to determine what has not worked, demonstrates the maturity and bearing of an organisation. Those organisations that are confident enough to retrace their steps, are not only well placed to reflect on what is right and correct what is wrong, they will also be able to avoid repeating the same mistake in future.
3. Consolidation and concentration over expansion and extension
It is often the case that business growth is measured by expansion and extension. Particularly where this facilitates the provision of products and services into new territories and markets or where the scope of the product or service offer, is diversified. However, dependent on the circumstances, consolidation and concentration can be better or more appropriate measures of ‘growth’ than expansion and extension. Fundamentally, consolidation is the practice of strengthening what you already have. By combining this with concentration, (eg: intensified focus or effort in a particular area of operation) products and services can be made more durable and resilient. A business that consolidates and concentrates, can therefore develop a more in-depth and meaningful understanding of the functionality and capability of its product.
4. Knowing who is imitating, not just who is watching
There are few measures that reflect the progress that you have made more than the influence that you have in your market-place and wider-operational environment (particularly the impact that you have on others). The more that your competitors imitate you, the more they acknowledge your creative insights, the strength of your brand and your market edge. If no-one is imitating you, that may itself be an indicator of how they perceive your presence in the market and the extent to which they view you as a viable competitor. Imitation is not just the most sincere form of flattery, it is also one of the most visible signs of business growth.
5. Awareness of your market presence
Ok, so think about how you behave when you are aware of something. What do you do when you are about to leave your home and discover that it is raining outside? Or if you are at the wheel of your vehicle as the traffic lights change from ‘amber’ to ‘green’? Awareness is critical because it empowers you to know and if your knowledge leads to understanding, then it empowers you to act. In the context of business growth, if year on year, more people are aware of your brand and products then that increase in awareness, presents you with potential for growth.
6. The size and durability of your footprint
A footprint is a clear and visible indicator of your presence. A footprint that lasts long after you have departed is evidence of your impact. As a measure of customer engagement, business footprint should not just let you know who is aware your presence, but perhaps more importantly who remembers you were ever there. The insight gained from measuring business footprint enables you to test the effectiveness of messaging to current and future customers. Specifically, it will enable you to determine where and with whom your messaging resonates. Using these insights, a business will be better able to determine where the greatest scope for further ‘growth’ might be.
7. The strength of your weakest link
Speed or pace of improvement is a fairly common measure of ‘business growth’. Whilst this metric can be applied across the scale, including those areas where a business performs best, it is most effectively applied to those areas where a business performs worst. The rationale and logic here is predicated on the assumption that: a business or any other entity, is only ever as strong as its weakest point. As such, a ‘truer’ measure of business growth is the one that will help an organisation to gain a more realistic and rounded picture of its overall performance, rather than the one that could inadvertently mask the areas of greatest risk.
In conclusion, growth is a measure of whatever you value and whatever you deem to be significant, in the context of your business. By definition, that could be a commercial return on investment, a public welfare outcome or something more nebulous. The most important thing is that, as a business, you are measuring the right thing, for the right reasons, in the right way and at the right time. If you are, then that is growth.
