Growth can occur naturally . . . or it can be forced by using bad methods. This article suggests abandoning the forced methods that have led to the current global recession in favor of using natural growth opportunities to succeed.
For years, companies have relied on unsustainable gimmicks to grow their businesses (such as zero percent interest car loans, 125 percent of assessed value home loans with teaser rates, and tripling interest rates on credit cards for those who are a day late with a payment). With the great recession of 2008-?, those practices have been shown to only lead to bankruptcy or being bought out by the government.
What should be done instead? Work on the right things, in the right way, and create a sustainable underpinning for success.
Businesses usually have time to only get around to doing the top few things on their priority lists. The smaller the company, the more likely this limitation is to be true.
Yet, almost no one has making business model innovations as a top priority. Even for those who do set an activity as a top priority, the right task must be pursued first in order to gain the best results.
You need a company mission and focus that will emphasize the greatest potential from continuing business model innovation. If a company's mission sets a lower performance standard than that of a long-lasting core insight superior to the competitors, chances are that the potential for business model innovation will be mostly undeveloped.
Many people have seen situations where companies try to grow too rapidly, and the results are catastrophic. Successful business models by contrast have usually focused on making business simpler, testing opportunities inexpensively before making large commitments, building on competitive advantages, and creating pathways for progress that cannot be blocked by customers, competitors, or others who oppose them.
By this approach, companies, in essence, are selecting business models that make it easier for the company to grow by reducing the difficulty of what the company had to do. They do that by focusing on larger opportunities, providing plenty of resources, and reducing the chances that something could go wrong.
By contrast, the usual path to gaining rapid growth is much like a forced march over heavy terrain carrying a heavy pack. At first, you move rapidly. But gradually fatigue slows you down. Without rest, you eventually drop in your tracks. That's unnatural growth.
By comparison, if you put water lilies into the ideal spot in a large pond with the right growing conditions, geometric growth will continue unabated until the pond is covered with its maximum supply of lily pads. Expand that pond around the shore line with the same conditions at any point along the way, and the water lily growth will continue longer at the same rate. A business model can do that for you so that growth can continue rapidly to a much larger size.
Are you ready to develop such a beautifully bountiful business model?
What are you waiting for?
Copyright 2008 Donald W. Mitchell, All Rights Reserved
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