CEO Leadership: 5 Hidden Obstacles that Derail Growth

CEO Leadership: 5 Hidden Obstacles that Derail Growth

Deciding to grow can initially be exciting, but it can also be really daunting.  As any top executive knows, focusing on growth creates challenges.  It puts pressure on cash flow, the skills of your team, your ability to innovate and deliver on time, all while still keeping customers happy.

Without sufficient long term planning, it can quickly turn into a nightmare.

In Australia, there have been many mid-market companies that have chosen to grow, but unfortunately met their fate instead. After announcing major franchise expansion plans, The Byron Bay Cookie Company, crumbled. It purportedly owed more than $2.7 million to unsecured creditors and was sold to Rinoldi Pasta.

While Terry’s Tortes and Treats, a family owed business, also fell into administration with the directors acknowledging that during their fast growth they had made a few strategic decisions that hadn’t worked out as hoped.

Before you set about growing, it’s important to ensure you have the right foundations to handle growth. There are five lethal growth killers that often work together to strangle the life out of mid-market organisations.  By ensuring that the CEO and the management team understand the five growth killers will help you avoid falling victim to an expensive and potentially life-threatening, growth strategy.

  1. Losing Track of Time

Benjamin Franklin famously said “Time is money.”  Time is a great leveller.  Every single one of us is constrained by time (and resources).

This has never been truer for mid-market companies who undertake numerous tasks concurrently with limited people.

Companies can be exceedingly good at being busy – yet can still fail.  As Jim Collins said in How the Mighty Fall, catastrophic decline can be brought about by driven, creative hard workers.  Even the best-intentioned managers get side-tracked focusing on the wrong tasks and wasting precious time and energy.

“The key is not how to do things right, but to do the right things.”  Peter Drucker

One of the biggest reasons that strategic initiatives fail, is they take enormous amounts of time to implement. Too often, mid-market organisations get side-tracked by the most demanding drama; losing their sense of urgency on important strategy matters, delaying important decisions and letting deadlines slide.

And it’s not just the CEO and executive team who don’t spend enough time on strategy.  According to a recent study by Harvard Business Review,  95% of employees do not understand how their day-to-day activities contribute to the strategy set by the executive team.  When you compound time issues with the executive team to designate enough time to create, test and tweak the strategy and the rest of the entire workforce to implement it, it’s little wonder that most strategies fail.  They are never given enough time to manifest.

  1. Foggy Focus

Poor use of time leads to the next growth killer – focusing on the wrong things. Unlike large companies that have the financial ability to put large teams to work on strategy, acquisitions, human resources and training, mid-market companies have to make do with fewer people.

Mid-market executives are often over-worked and don’t have the luxury to spend weeks mulling over a new strategy.  Strategies are often devised that are not based on facts, but rather hopes. It is foolhardly to pivot your organisation towards a new strategy that has not been deeply researched and tested.

At the same time, once a strategy has been decided on, it’s so important that organisations learn to prioritise the long-term, instead of the urgent.  The strategy must accomplish its own deadlines, rather than being pushed into the background, in order to resolve immediate business needs.  Otherwise, the organisation will miss out on opportunities to grow or grow with too much risk.

The key is the ability to have sharp, laser-like focus on the most critical priorities for the business.  Yet, the CEO, executive team and the workforce often have difficulty working out what to focus on.  

The challenge is to be extraordinary clear on what your organisation stands for.  What are you best at the world at?  It’s knowing your vision and core values and reminding people about this every day.

  1. Endure Dysfunctional Leaders

One of the features of a mid-market organisation is that a lot of its executive and management team started working with the company when it was small.  While these leaders were able to handle their job perfectly in the early stages, an organisation can easily outgrow their leaders who do not have the skills nor abilities to manage a larger department or projects.

CEOs also tend to be an optimistic bunch, while this optimism is helpful in dealing with setbacks, it can be detrimental to assessing situations realistically. Unfortunately, most CEOs underestimate the skills of their team to execute strategy.  According to a Bain study, CEOs consistently rate all strategy implementation success factors at their company–from alignment to mindset to capability–in a more positive light than the leaders below them, including other C-suite executives.

Holding on to poor performers through loyalty, friendship or even family ties, has brought many great CEOs down.  It is also devastating to the company culture affecting sales, innovation and productivity.

  1. Lose Connection to Customers and Employees

Many Chief Executives have learnt the hard way that focusing primarily on new deals, frequent travel and opening offices in new locations means that they are spending less and less time with their employees.  Employees who have often worked closely with them, when the business was smaller.  The truth is your workforce want to feel connected to you.  They want to know that you appreciate them and their work.  Just like a marriage won’t last if you ignore your spouse, nor will you company if you become unavailable to your employees.

But it’s not just your employees who want to connect with you.  It’s also your customers.  Both the CEO and executives must gather real-time intelligence about the market place.

Having real time customer feedback provides you with an “outside in” perspective that ensures you know what your customers and vendors are thinking.  This makes it easier to correctly forecast, innovate, meet goals and execute.  It also ensures that your people keep you informed of any potential big issue, so you can avoid a crisis.  Without it, you’ll lose your feel for the business and create unrealistic business strategies that are based on hunches, rather than facts.  Chief Executives who manage to remain personally connected with employees help to lead them out of their comfort zones to tackle big challenges and drive performance. Ultimately, it means higher employee engagement levels which can lead to increased productivity and profits, while decreasing staff turnover and safety incidents.

  1. Preparing Systems for Growth

To handle the new growth, it’s important that you have an employee on boarding system that recruits the right people, quickly gets new starters to speed, including new employees from a recent acquisition.  It’s crucial that new starters are inculcated into your culture and understand your vision and values, as well as what’s required for them to be successful.

This ensures they understand what actions, behaviours and decisions are relevant to achieve your goal.  In particular, the need to get things done on time, disdain waste, be accountable for results and deliver products and services on time to a high standard.   Great on boarding make your team smarter.

As mentioned in the book, Mighty Midsized Companies: How Leaders Overcome the 7 Silent Growth Killers, organisations that have failed during a new growth initiative have often suffered from horrendous operational meltdowns.  It is mistaken to believe that more sales can’t damage business.  They do if you’re not ready.  If you’re team is handicapped by an out-dated IT or physical infrastructure, it can take resources away from customer service and new product development.   Pretty soon mistakes can happen including late or wrong deliveries that can be costly to rectify.

Getting Growth Right

Every organisation needs to grow, but any growth strategy must be properly resourced with the right people to get results. Ultimately, your culture must be designed to execute growth. It’s critical that mid-market organisations learn to prioritise and plan with timely information that is properly tested and based on reality.  Both the Byron Bay Cookie Company and Terry’s Tortes and Treats incorrectly forecasted market demand and competitive pressures from international biscuit brands.

The work of a leader is to chose the right pilot-tested strategy, provide people with a clear sense of direction, give feedback on progress and keep everyone on track.  And avoid the confusion and fog of being trapped in a strategy that isn’t working.  Through strictly adhering to milestones and testing strategies, organisations can generate the right type of pressure to create timely results that keep the organisation moving forward.



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Marie-Claire Ross is the Founder and Chief Corporate Catalyst at Trustologie. She is a workplace sociologist, author, speaker and consultant focused on helping leaders create high trust organisations, in order to get everyone the same page and easily navigate during times of change. She does this through strategic diagnostics, roundtables, workshops, coaching and consulting. Marie-Claire is also the author of the number three ranked book on Amazon, Transform your Safety Communication. She has been interviewed on “Technology Behind Business” for Sky Business News and regularly contributes articles to FM Magazine on company culture. She is also a Graduate of the Company Director’s Course and is on the SME Committee for the Australian Institute of Company Directors.

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