Management for growth is a complex process with many variables. It requires many changes – and much flexibility – along the way. I can speak from personal experience in building J.P, Industries, Inc. in just ten years to a Fortune 500 industrial corporation. I also want to share with you the results of a research study conducted by Dr. L.(Hendrickson) Uhlaner, formerly with Eastern Michigan University, under my guidance on the question of growth management and published in a book. Borrowing from the classical goal approach, firms depend on financial viability to survive and grow. A financially viable firm can pay its bills when they are due and operate at a profit, simple enough. But achieving financial viability is much more complicated than merely determining objectives for profit and production of goods and services and then setting out to achieve these goals. We must define the issues that we must manage in order to assure financial viability – these include market strategy, work flow, resource acquisition, human relations, resource allocation, public relations, and technical mastery.
Each issue raises key questions about how you run your company;
- Market Strategy: Establishing and maintaining a market niche.
- Work Flow: Assigning and dividing work, and in turn, coordinating these efforts in a manner that assures task accomplishment.
- Resource Allocation: Optimally assigning all sorts of resources, capital, supplies, personnel, etc.
- Human Relations: Maintaining adequate motivation and morale among employees, so that personal needs of employees are met coincidently to the goals of the company.
- Resource Acquisition: Obtaining key capital, personnel, information, and material inputs.
- Public Relations: Maintaining or enhancing adequate relationships with significant outside groups other than customers and suppliers.
- Technical Mastery: Assuming the firm knows how to make and improve what it sells.
- Financial Viability: Having adequate capital and cash left over to operate the business and make it grow.
If you can keep these eight issues in mind, you will be less likely to waste time in crisis management. Crisis management comes from a lack of ability to anticipate problems early enough for planned solutions.
If a firm is able to address and manage each of those eight issues adequately over time, it is more likely to remain profitable, with better cash flow and less tension and grow.
For example, ask yourself the following questions relating to the above eight issues:
- Are you selling your goods or services at the expected levels and prices?
- Are you able to get the supplies/capital/people you need to do the needed work?
- Are you on good terms with others in the larger community within which you operate? Are you facing any litigation as a result of an oversight of one or more outside constituencies (environmental group, government, citizens’ rights groups, etc.)?
- Are you able to allocate your resources to projects, departments, or activities.
- Is morale good, and are employees committed to the company and to high performance?
- Can you produce goods and services for customers as promised with respect to quantity, quality, price and timing?
Your dissatisfaction in answering any of these questions may signal a need to probe deeper into self-assessment of your company and may also provide an opportunity to develop a more effective strategy and growth management in your firm.
Keep in mind that the performance of the company is a function of the weighted products of effectiveness of each of the eight issues above. If anyone of the issues is neglected the performance of the company can be effected adversely and severely.
Finally, make sure that you do the following as well:
- Have a clear vision of your company that your employees also share and want to accomplish.
- Track each of the above eight issues frequently.
- Watch your finances closely – especially your cash flow. It is your firm’s pulse.
- Constantly reassess your strategy in each area and take action as needed to modify strategy to fit new conditions.
- In making changes, plan for the people side, not just the technical side. Anticipate resistance to change and take steps to prevent it.
- Create feedback loops so that you can evaluate progress from every issue.
In closing, treat your company as a dynamic organism that is in continuous, and not always smooth, motion.
“Dynamic Management of Growing Firms – A Strategic Approach” by Lorraine (Hendrickson) Uhlaner and John Psarouthakis; Univ. of Mich. Press, 1998.