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Growth and Change
By Catherine Kitcho
Small companies and startups want to grow and be big. Large companies
want to be small and entrepreneurial. The process involves change
- serious, sometimes painful, change.
In the mid-1990s, we are witnessing an unprecedented rate of small
business formation as well as a boom in venture capital for high
technology startups. Small businesses are growing faster than ever
before, fueled by the economy. Established high-tech businesses
are also in growth mode, out of necessity to remain competitive,
given the current pace of technology evolution. At the same time,
large companies are now having to compete with small companies.
A recent Wall Street Journal report on Small Business (May 23,1996)
suggests that large companies can no longer ignore small businesses
- they "form alliances with them. They try to sell to them. And
most often, they try to act like them."
If your company is in this mode, here are some practical steps you
can take to begin the process of developing a new business model
for growth or change. Throughout this exercise, it will be important
to be as objective as possible.
The first step in formulating an effective strategy is developing
an awareness of the NEED for growth or change. You must be absolutely
clear about the business goal or reason. The most common reasons
for change include: being more competitive and increasing market
share, entering new and unfamiliar markets, improving the bottom
line, revamping corporate image, and developing new products.
The next step is determining the level of investment of RESOURCES
you can afford in order to accomplish the change. Resources include
the human type as well as money. Define a maximum budget of both
human and financial resources before beginning the process. If you
need additional capital to accomplish growth, then initiate that
process as well.
Once resources are defined, do an INTERNAL LOOK at the business
processes and systems, product lines, and organization that are
already in place. This stage is also known as pain determination
time. Which ones can be salvaged or used in the new business model?
Which ones should be left to run as they are, in parallel, while
developing the new business? What are the new resources you will
need? Also, talk to those inside your company who have managed a
growth or change process to assess their lessons learned.
Then do an EXTERNAL LOOK at other organizations and what they have
done. Analyze your competitors and other companies that have accomplished
what you want to do. Talk to people who have implemented growth
phases in other companies. In the process, you may find some interesting
STRATEGIC PARTNER candidates to help you accomplish your new business
goal.
At this point, you will have the beginnings of a new model based
on lessons learned from others, as well as an inventory of internal
business resources. Go back to your budget, and evaluate the model's
affordability. You may need further iterations as you continue to
gather more information and refine the model. This will give you
the basis for a growth plan that you can then implement.
May all your businesses grow and prosper!
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