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The Journey to an Accelerated and Sustainable Growth

April 20, 2012 | Comments: 0 | Views: 88

Companies all over the world face challenges when it comes to growth. They get to a point in revenue and then plateau for months or years, not sure how to get to the next level. Other companies achieve growth, but then face challenges to manage it.

The performance of highly successful companies is higher than the performance of the average in the industry. Companies in the INC 500 index are growing almost 100 times faster than the overall economy? How is this possible? What do these companies have that others don't?

We can look at the path to success for a company as a journey, in which the company goes through different stages and has to overcome a set of challenges: 1. Being Relevant 2. Identify Core Competitive Advantage 3. Build Institutional Capabilities 4. Develop Governance Structure 5. Innovate

The first challenge is becoming relevant to the market and being able to deliver value to its clients. Your customers need to perceive that you are adding value to them, making their lives easier with your products or services. To achieve relevance, your company needs to focus on developing a clear value proposition and deliver it at its best. This is a very difficult stage in the life of a company where the financial focus is on breaking even and becoming cash-flow positive. Only 1 in 5 companies survive this stage. The good news is that companies that survive the being relevant phase generate substantial value to its owners, generating a sense of achievement, pride and economic independence. Good things are coming!

However, this sense of "bliss" is really an "Small and Medium Business (SMB) trap". It is very easy to feel good about what has been achieved so far and hence stop here and stay at the Small or Medium business level. The entrepreneur needs to have a strong vision for his or her success to avoid falling in the comfortable state of becoming a profitable Small or Medium sized Business. Other external factors can also help shake the entrepreneur from this newly found sense of "bliss". The economic environment, finding more demanding clients and increasing competition present challenges as well as an opportunity to move the company forward and become a better organization than before.

The second challenge is to differentiate from others by building a competitive advantage. During the first phases of the business the entrepreneur usually feels pressured to accept different types of business just to generate revenue and move the company forward. These activities may lead to a loss of focus and to providing products or services that are not actually core to the company's business, or not what the company does best. This is the time to rethink the strategy and make sure that the company is focusing on doing what it does best, generating true innovation by moving away from a commodity towards a differentiated value proposition. This is the time for the company to focus on its core competencies and outsource the rest.

Companies frequently need investment to finance its innovation and growth, and at this stage there is a tension between these two: Should we focus our financial resources in financing growth or investing in innovation?

The third challenge is to build the institutional capabilities that will enable the company to move from a "one man show" to an organization where different people can work together under clear roles and responsibilities without stepping on each other's toes. The entrepreneur will need to hire and manage the right management team to succeed, as well as be able to align everyone under the same vision.

The journey will bring "tornadoes" that will shake and challenge the business. There will always tension between managing growth and profitability as well as maintaining focus. In addition to that, the leadership of the organization will need to make sure that the talent and team in the organization are kept engaged and motivated throughout the journey, always giving their best.

The fourth challenge is governance under high growth environments. The leadership of the organization is in the day-to-day trenches, which sometimes makes it difficult to see things strategically and from a distance into the future. The right governance structure can set up the right sounding board to provide mentorship and guidance when needed, as well as contacts in different markets to keep growing the business. However, the governance structure can only be useful if the people in the structure have the right visibility into what is going on in the organization. Setting up the right coordination and control mechanism at every level of the organization will enable the created of strategic control panels that will provide visibility into the organization to that leadership can make decisions with the right information at hand.

At this point in the maturity of the business, the entrepreneur enters a new bliss point: The organization dominates its niche, operating in a high growth and high margin environment and has excess cash-flow to invest. But how can the organization maintain its dominant position?

The fifth challenge involves maintaining your flexibility and innovation capabilities. This can be done by taking your current offering to other geographies, as well as diversifying in product offerings and / or moving into richer parts of the value chain to offer products or services that customers have a higher willingness to pay for.

In this part of the journey, companies face a dilemma of growth. Should they continue to grow organically? Should they look at potential strategic partners that offer complementary lines of products or services? Should they get into a joint-venture with another company? Should they acquire another company? Decisions have to be made with regards to investing in or acquiring additional capabilities, for which sophisticated sources of financing will be needed.

The journey to become the next market leader is not a straight one. Your company may be held in one or several parts of this journey. You need the drive to continue and thrive and the right tools and methodologies to move forward. You need a driving force that helps you gets started and stay on track.

If you decide to embark in this Journey you will: Capture the full financial benefit of being an entrepreneur Create new jobs and re-ignite the economy

At the end of the journey, you will be proud of your legacy to the world and become an inspiration for other to follow their dreams.

Impulsa Business Accelerator has experience accelerating over 400 companies and helping them achieve a leadership role in their markets. If you are interested in learning more about Impulsa Business Accelerator and how we help companies throughout this journey, do not hesitate to contact us at 1.855.IMPULSA or online at

Leandro Margulis, MBA '10 from the Yale School of Management, was born and raised in Buenos Aires, Argentina. He completed a degree in Industrial and Systems Engineering at Florida International University (FIU) where he graduated Summa Cum Laude in 2006.

As president of the FIU chapter of the Institute for Operations Research and Management Sciences (INFORMS), Leandro increased membership base and visibility through rebranding and marketing strategy, efforts which earned him the INFORMS Outstanding Student award in 2005. His active involvement in the Society of Hispanic Professional Engineers (SHPE) and the Institute of Industrial Engineers (IIE) furthered the goals of these organizations through events coordination and participation. In addition, Leandro utilized his membership in the Operations Research Honor Society (Omega Rho) and the Industrial Engineers Honor Society (Alpha Pi Mu) to promote the values of educational integrity and quality.

Recognizing a passion for innovation and leadership, Leandro chose a summer internship in Operations Management with GE Transportation, followed by an internship in Sales Consulting with Oracle Corporation in Miami, FL. These two experiences strengthened Leandro's business experience, and began the process of applying his systematic thinking to organizational excellence.

Upon graduating from FIU, Leandro worked as a consultant with Deloitte Consulting in Business Process Improvement and Enterprise Systems implementations, where he completed system modules implementation and coordinated international project management efforts between the United States and Eastern Europe.

Once he completed his MBA, Leandro returned to Deloitte as a Senior Consultant in the Strategy & Operations practice. These experiences positions Leandro to pursue a career aimed at building companies and capacity through strategic development while leveraging financial capabilities and innovating around emerging market opportunities.

Specialties Strategy, Management, Business Case Development, Project Management, Sales, Consulting, Business Process Redesign

Source: EzineArticles
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