Business is a fickle thing, and if you aren’t growing, you’re going backwards. Harsh words, we know. But true all the same.
Often when company growth stalls, the blames falls on C-level executives or external forces – Economic downturn, government ruling or any other excuse.
After deeper analysis, we can see that the most common causes for growth stalls are usually preventable (for the most part).
In this article we will offer advice for avoiding some common pitfalls that halt business and revenue growth.
1 – Firm Unable/unwilling to respond to new, low cost products entering the market.
By far one of the biggest reasons company’s experience growth stalls is because of their inability to remain competitive with new lower cost products entering the market. Technology has been a huge force in driving the cost of goods and services down, and for companies that do not respond in a timely manner and/or fail to understand the emerging behaviour of their customers can have detrimental effects on the business.
Often companies whom are slow to adapt are slow because they have experienced solid market share for an extended amount of time, so they are insulated longer than other companies as they have less reason to believe that their strong position in the market in under threat as historically their business model has been reliable and proven competitive.
2 – No Innovation
The second most common cause of growth stalls is a lack of innovation. This is often the cause of a managerial breakdown of business processes in charge of updating products and services and creating new product lines.
Innovation can be; a lack of Research and development to poor product commercialisation.
A break down in innovation management may look like - an over allocation in smaller incremental product opportunities at the expense of sustained Research and Development investments in larger future product platforms.
A sustained and continued lack of innovation for business (big and small) can eventually produce major revenue stalls. There are some series clues when a company is at risk, the most evident is to see where R&D money is being spent, for example: Is some portion of innovation funding allocated to creating lower cost versions of existing products and services?
Granted that Innovation is a slow and often lengthy process, fatal flaws can often be slow to surface and extremely hard to remedy.
Business leaders should actively explore the potential of new product models to rejuvenate even the most “mature” product lines.
3 – Straying from Core business function.
The third major revenue staller for business is when business abandon their core business activities, without exploiting all growth opportunities in this area. This could be in the form of a merger or acquisition of another business that is not directly related to your business core function, customer base, product line or channel.
It is important for business to look at growth opportunities as markets change, but more importantly before devising your new next-level growth strategy, make sure that your current growth strategy is being adequately executed.
Often technologies can offer solace when seeking growth opportunities, diversification of business core functions can often lead to customer confusion and abandonment.
4- Out-dated technology
The fourth major staller of company revenue growths is often out-dated technology that is an inefficient use of your time. You may think that your technology works just fine, but you could be missing out on capabilities that fuel business success. A study by the Boston consulting group (BCG) found that companies that were technologically savvy grew 15 percent faster than technology laggards (they also created more jobs)
The right technology can boost business productivity and employee satisfaction (for more information on the importance of technology and attracting top talent)
Technology today allows companies to expand their business beyond geographical boundaries, it can keep company data safe and allow faster easier and more effective communication between customers and employees.
These are just four of the most common causes of growth stalls. Whatever concerns may arise during strategy discussions with higher management, growth stalls should be right at the top.
Lanrex offer tools to enable executive teams to continually monitor and test their accuracy and flag any flawed systems they jay have in place, which may trigger a stall in the future.
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