Overcoming Your Internal Barriers To Growth

Despite the increasingly competitive in most markets, for many organisations the barriers to growth are as much internal as they are external.

Like a new football manager who can transform a team's results half way through a season, some business leaders are able to create and drive profitable growth in a company that was previously treading water. The reason they can do this is that they area able to identify and overcome the organisation's internal barriers to growth.

In my experience there are seven common internal barriers. None of these are insurmountable, but you do need organisation, determination and focus to overcome them. It is a company's ability to surmount these factors that differentiates the market leaders from their competitors.

  1. Blind acceptance of your key business assumptions. Understanding what drives your strategy is critical to defining the scope of your business. For example, HMV's current turnaround can be traced back to the insight that it is not simply a CD retailer, but a music and entertainment brand. This change in perspective has led to a greater focus on films and games in its stores, and a drive into new channels such as live music venues. What alternative perspectives exist for your business and what impact would they have on your opportunities for growth?

  2. Not raising the bar high enough. This is not just about goal setting, it is also about creating a management approach that doesn't just set out to fix problems, but to create completely different - and better - customer solutions. Ryanair didn't succeed by having nicer meals and more motivated staff than BA or Aer Lingus, it succeeded by turning the whole concept of air travel on its head. Where are you focused on incremental tweaks to performance improvement, when you could be developing radically superior solutions?

  3. Conflicting priorities. A lack of consensus at the top level can dissipate investment in future growth. It is the job of the leader to create alignment and focus around the key priorities for growth. The first action of many new CEO's is to reduce the number of 'strategic' initiatives in stagnant organisations. Where could you make more progress by reducing the number of initiatives and focusing your efforts on the most promising ones?

  4. Insufficient capacity or capability. In many organisations there are bottlenecks in key teams, inhibiting future growth. Again, spending time to find new ways to break through these constraints and refocus these teams can have a dramatic impact on performance. Working with other organisations is one way to achieve this objective. Procter & Gamble, for example, are targeting to source 50% of their new products from their external networks and partners, and David Brennan, the CEO of Astra Zeneca has said that he is more interested in collaboration than acquisitions to drive growth. What are the major resource bottlenecks in your business, and what options do you have to remove them?

  5. Risk avoidance. A fear of failure impedes many managers' commitment to new growth. However, if your organisation is to thrive, you need to get over this fear. There are steps you can take to minimise and manage the risks you face, but there is now new growth without prudent risk. Failure with any new venture is almost inevitable. The secret to success is not to avoid failure, but to fail as quickly and as cheaply as you can, so that you learn what the better solution might be. In what ways are you promoting and rewarding prudent risk taking in your business?

  6. A lack of ideas. Large companies that are good at innovation are remarkable and few, but a structured approach to development can deliver big rewards. For the past 10 years Whirlpool, the US electrical appliance giant, has trained, engaged and rewarded thousands of its people in its innovation management systems, helping to create $2.5 billion sales from new, innovative products last year. How does your organisation systematically involve everyone in driving growth and innovation?

  7. Budgetary constraints on investment. There are always insufficient funds to invest for longer-term growth and, at the same time, hit current year targets. Equally, however, there is always money available if an idea is good enough. The key is to get enough evidence to support new growth at the lowest possible cost. For example, although RBS may not currently be perceived as an exemplar company, it has established an interesting approach to innovation. Instigated by Mike Harris, the founder of both First Direct and Egg, the RBS innovation board gives managers from across the business small sums (less than 5,000) to rapidly prototype interesting ideas and bring back results for further investment decisions. What can you do to quickly and cheaply gather evidence to support your new growth ideas?

  8. The bottom line

    It is one thing being beaten to growth by external forces, but it is simply an own goal if you allow internal barriers to growth to establish, take hold and limit your company's potential. You owe it to your customers, your people and your investors to minimise these negative forces for growth.

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Stuart Cross
Morgan Cross Consulting
Tel: +44(0)1636-526111

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Registered Office is 12 Bridgford Road, Nottingham, NG2 6AB

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