Business Growth Strategies

All posts tagged Business Growth Strategies

Poor Planning Can Lead to a Failed Business

Published May 23, 2014 by Mayrbear's Lair

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Another significant reason why businesses fail is because of poor planning. However, upon closer examination, we will discover that businesses do not fail because of poor planning alone, failure also tends to occur because the plans were not executed to their fullest potential. Carroll and Mui (2008) revealed, for instance, that corporate America has spent hundreds of billions of dollars producing epic business failures. In fact, many executives in top management positions cringe at the word failure. As a result they rarely learn from failed outcomes and in most cases, focus the blame elsewhere (Carroll & Mui, 2008).

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Take for example the mortgage and loan crisis of 2008 that repeated earlier financial crises. This is a strong indicator that business institutions continue to repeat the same or similar errors. The statistics are quite sobering in fact because they reveal that since 1981, 423 US companies with assets of more than $500 million filed for bankruptcy. In addition, their combined assets at the time totaled more than – are you ready for this – $1.5 trillion! Their combined annual revenue was almost $830 billion; and in fact, some of these corporations filed bankruptcy multiple times! This tells us that companies are not even learning from other companies’ mistakes.

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So what is the reason for all these burnouts? Carroll and Mui’s research suggests that it is not poor planning, but rather the poor execution of those strategic plans. For instance, in a battlefield, most leaders reveal that a battle plan rarely survives first contact. This is because they can only engage in so much planning before just moving forward. Executives could stand to learn from this fact. Planning and execution are significant, but what is equally if not more important, is creating a plan with good strategic actions that will produce effective results.

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Take for example the famous incident that occurred at the Charge of the Light Brigade, the British Cavalry so named because they were optimized for fast mobility. The English troops were led by Lord Cardigan against Russian soldiers in October of 1854 during the Battle of Balaclava. According to reports, faulty intelligence affected the orders given to the cavalry that contributed to the disastrous decision to charge the Russians who were equipped with a considerable amount of artillery in the Crimean War. The British executed their strategy as planned, however, because the strategic move was based on false data, their campaign was ineffective. Once the charge was set in motion, there was no way to avoid the disaster they encountered and as Alfred Lord Tennyson wrote in his famous poem, the soldiers walked into the valley of death.

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In other words, their failure did not result from poor planning, it resulted because of incorrect information that was used to devise the plans. This is how inaccurate information can result in disastrous outcomes. In fact, in a business context, Carroll and Mui further postulate that 46% of company failures can be avoided if leaders are more aware of the pitfalls they may face. Other failures can also be avoided if companies are able to detect the warning signs. In short, the best strategy to avoid failures that result from poor planning is to understand that poor planning can result from a lack of accurate data in the construction and execution of the strategic planning process. In truth, there are many factors that can contribute to a business failing to achieve their desired outcomes. The key lies in a firm’s abilities to not only acknowledge their mistakes, but take responsibility and accountability for them as well as use the failure as an opportunity to learn so they can avoid repeating the same patterns thereafter.

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Well that wraps up our analysis on the various components that contribute to business failures. In the meantime, for anyone interested, this Memorial holiday weekend only, we are kicking off an exciting promotional campaign with amazon.com where you can pick up several of my published eBooklets on organizational management for free! If you or anyone you know can use some help taking their business to the next level, click on the title links for the booklet of your choosing. Today’s specials are: (a) Breaching the Communication Gap which provides insights and information on the value of effective communication and the tools needed to develop more successful communication skills; and (b) The Mission of Corporate Strategic Behavior which will disclose to you valuable information on the significance and purpose of developing effective organizational management plans! Get your copy today!

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Have a fun Memorial Day weekend everyone  and keep organized!

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“Get into the habit of asking yourself if what you are doing can be handled by someone else.” — Anonymous

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References:

Carroll, P., & Mui, C. (2008). Billion dollar lessons. New York, NY: Penguin Group.

Six Reasons Why Businesses Fail

Published May 19, 2014 by Mayrbear's Lair

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One thing we are not prepared for in life, nor is this topic generally taught in most academic institutions, is how to deal with failure. Maxwell (2000) points out that people in school are trained for success and as a result, most of us have an unrealistic perception of what failure looks like, let alone how to deal with it. The truth is, we should also receive training for failure as this a far more common occurrence (Maxwell, 2000). In fact, taking into consideration that 1% of the population holds all the wealth, we can say that poverty is more prevalent than wealth and disappointment transpires far more often than not. Just ask all the teams that did not make it to the Super Bowl this year or any of the athletes that have ever competed at the Olympic Games who did not walk away with a medal.

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Given these statistics, it makes sense that the odds are in favor of our failing more often than not. When you think about it, that’s a pretty grim perspective. However, acknowledging this element can be helpful to leaders in a business arena.  For example, when professionals who helped troubled companies were surveyed, the  top six reasons cited for why most businesses fail were:

  1. Too much debt
  2. Inadequate leadership
  3. Poor planning
  4. Failure to change
  5. Inexperienced management
  6. Not enough revenue

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This valuable information provided from professionals, can help companies develop strategies when they are in trouble. By taking a closer look at components like inadequate leadership and poor planning,  key decision makers are in a better position to implement more effective strategies. On Wednesday’s post we will examine the role inadequate leadership plays in the failure of business ventures. Until then … let’s keep organized!

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Will you succeed? Yes you will indeed! (98 and 34 percent guaranteed.) – Dr. Seuss

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References:

Maxwell, J. (2000). Failing forward. Nashville, TN: Thomas Nelson, Inc.

Business Growth Strategies Conclusion

Published May 16, 2014 by Mayrbear's Lair

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When it comes to organizational strategic management, not all experts agree that growth will always yield positive outcomes. Hess (2012) points out, for instance, that growth can cause staff members anxiety and stress. In the eyes of the employees, for example, growth can be perceived as having to learn new processes, changing controls, and incorporating a new culture. In addition, it can create risks, effect quality outputs and result in financial structural changes. Furthermore, it can affect customers negatively and even destroy a company’s reputation. 

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When Coca-Cola engaged in a growth strategy that included changing their formula, for example, the general consensus was why change something that already worked? As a result of this tactic, rather than achieving the desired outcome they hoped for, consumers were not supportive of the new strategy and Coke went back to their original formula. In other words, if growth strategies are not implemented and managed competently, growth can contaminate a company’s value and in extreme cases, even bankrupt them (Hess, 2012).

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In short, bigger is not always better because of the complexities involved. The bottom line is that growth is change, plain and simple. If managed properly with efficient systems devised to operate at maximum outputs, it will decrease the likelihood of errors that occur which can in turn, result in the production of evolutionary outputs. This can transpire, as long as the firm and its staff members acknowledge that running a successful business is a continual learning process; one which requires discipline, efficient methodologies, and effective systems that are in place to support the firm’s intentions and vision. In conclusion, the best growth strategies are well-planned because they provide the clearest road maps that will lead a company to higher performance outcomes more quickly because of the processes and systems that are set in action to support them.

 That’s it for this week! Have a great weekend and keep searching for innovative ways to keep organized!

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 Readers are plentiful; thinkers are rare. – Harriet Martineau

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References:

Hess, E. (2012). Grow to greatness. Stanford, CA: Standford University Press.

More Reasons Why Growth Strategies Work

Published May 14, 2014 by Mayrbear's Lair

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Growth strategies also consist of the development of systems that will help perpetuate a business as well as help them to establish what their destination is. This is achieved by devising effective methods, systems, and processes designed to help them reach their objectives.

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For example, when an individual plans for a road trip, without the use of a map or a GPS system to guide the traveler to their journey’s end, the navigation process can become more difficult. This is a good way to approach organizational growth strategies – they are the road maps that help steer the company’s expansion to reach their desired goals.

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Furthermore, Coulter (2010) suggests that growth strategies can help in the development of a company’s sustainable competitive advantage because they can assist in locating and allocating resources that transform the firm’s capabilities into distinctive functional competencies that industry rivals are unable to easily duplicate (Coulter, 2010). In short, effective growth strategies can help companies achieve their goals quicker because they consist of focused detailed plans that help them achieve their goals.

On Friday we’ll wrap up our look at business growth strategies by examining some of the negative repercussions they can have. Until then … keep organized!

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“That’s what I consider true generosity: You give your all, and yet you always feel as if it costs you nothing.” ―Simone de Beauvoir

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References:

Coulter, M. (2010). Strategic management in action (5th ed.). Upper Saddle River, NJ: Pearson Education, Inc.