By Nathan Farrugia, Managing Director of Vistage
We often associate speed with risk – may it be driving a car or making an important decision. Whilst all entrepreneurs feel the ‘need for speed’ when growing their businesses, there is a cautionary tale worth heeding.
Perhaps we need to think of the speed of growth differently; what if time was not the issue, and growth was relative? Would we choose a more sustainable approach to growth that, in the long run, will be more resilient to economic forces, require less of our energy, and increase our wealth systematically?
What if we also looked at the impact our business has on the environment, our industry, and our communities? Would that be a measure of growth and expansion that is worth considering alongside financial determinants?
Start with the end in mind
What do you want from your business? Build and exit? Create passive income? Keep your family and your team in employment? Dominate your industry?
So far, we can probably agree that growth is a multi-dimensional descriptor of success. What defines success is our perception of value. So, whilst I may be quick to grow my turnover and revenues in the short term, would an investor looking at my company consider its sustainability, ESG factors, and human talent when determining its value?
Sustainability is key to longevity
I can already hear you asking, but what is the right balance between growth and sustainability? Dry a ceramic pot too quickly, and it cracks; too slowly and it loses shape. What is the right speed for growth then? As a VC I wouldn’t want to invest in a company that won’t survive a change in leadership, one with struggling cash flows, or one with too short a proof of concept, even if its turnover looked great on paper.
I have always approached life as a bit of a race. The need to get results, both as an athlete and a leader, was a thread that ran through most of my life. I’ve started or run over 15 businesses, and about half of them got killed off quite quickly.
Stay true to your purpose
Tech, telecoms, events, and social impact organizations that were a flash in the pan started out as great ideas, filling a niche and executable on a bootstrap or minimal investment, but they didn’t survive. The ones that did, some for over 15 years, grew more slowly and sustainably. They often grew in alternating cycles of innovation and consolidation, but never veered away from the purpose they were created for.
In his book Good to Great, Jim Collins explains how company longevity is directly connected to their ‘flywheel,’ or the thing they are truly good at. Think Amazon and e-commerce, Tesla and automotive technology, and Facebook and social engagement.
Value the thoughts of your like-minded peers
Having a peer group of advisors is a brilliant way to stay ahead of the curve. Whilst being confidential, the groups often become one's personal board of advisors that not only offer support and solutions when stuck but also help gain knowledge through peer-to-peer learning. At Vistage, we meet monthly to brainstorm ideas, challenge our thinking, and test scenarios that help individuals lead their industry and grow twice as fast (and sustainably) as their competition.
Slow and steady wins the race
The secret of growth is in moving steadily forward, with enough agility built into your methodologies to adapt to change. When we talk about success, it does not always need to be a rapid overnight growth but instead a slow accumulation of assets with a commitment to your business, your service quality, and your clients. Building slow and building steady is a smart way to guarantee a long-term growth underpinned by steady profits.
Adaptability: The new competitive advantage
If you want to lead in your industry by simply surviving, you are already outsmarting your competition. The secret to staying ahead of the curve is therefore adaptability.
As Darwin stated, it’s actually not the fittest that guarantees survival, but the ability to adapt to your ever-changing environment. Building agility and resilience in your team, your service, and your product is the key. This allows you to expand to new markets, operate in new cultures, lead in new industries, and innovate using new technologies.