Developing High-Growth Business: Maturity Stage (Your first-ever Business e-Coach)

The Stage-by-Stage Guide

MATURITY

Maturity

- the company is established on the market; needs to innovate continuously to stay competitive

Organization: Decentralized

Management: Professional

Technology: Integrated Systems

Funding stage: Asset-based

pp.

Problem

Solution

Action

7.1

Growth Risk

Stagnation of operations and the complacency that naturally occurs as firms age
Resistance to change at both individual and organizational level
Detailed long term planning is difficult due to volatility of the market situation
Management left with little space for innovation due to the need to achieve short-term, yearly and quarterly results
Unbalanced approach to corporate strategy favoring efficiency and productivity at the expense of venture strategies

Believing in and acting on the idea that there's no such thing as a mature business
Focusing on building value, not profits
Establishing institutional excellence
Reinventing your business model, experimenting extensively to find a successful new model and get to the next stage of growth
Exploring continuously your organizational options for change
Continuous innovation process as the lifeblood of your corporation, a part of its culture and the business-building strategy
Development of a flexible, responsive and innovation-friendly company structure adaptable to changing internal and external conditions
Development of effective and flexible production systems responsive to change (see slide show)
Building strategic partnerships: tapping into complementary resources of others

Build an inclusive company
Spend at least one full day each month out of the office working not for your business, but on your business - anticipate changes, analyze what else is happening, or may happen, or what you might be able to make happen
Explore all the three main growth routes: 1. organic growth; 2. acquisitions, and 3. venture creation
Master the balanced business systems approach
Focus on strategy - not operations; reinvent your sustainable growth, competitive and differentiation strategy
Master opportunity-driven business development and dynamic strategy approach to respond quickly to external and internal change
Organize periodic readministration (every one or two years) of the Organizational Fitness Profile (OFP) for the business as a whole
Master your corporate capabilities to move with speed
Establish the relentless growth attitude in your company to keep new ideas flowing; devise catalytic mechanisms
Develop an industry roadmap that reflects your and competitors' migration patterns and helps you develop your project portfolio
Develop venture strategies to expand your capacity for speed.
Concentrate on your key competence area and develop strategic alliances with companies providing complementary services (see slide show)
Maintain a purposeful and organized search for new opportunities
Do bottom up planning; define strategic focus of your company and develop a strategic business plan enabling continuous innovation processes. Treat your business plan as a work in progress.

7.2

Innovation Risk

Shortening life cycle of technologies and products
Incremental features of product improvements add less and less value
Difficult, if not impossible, to predict the next major trend in any industry
Rejecting an emerging technology as it may be viewed as inferior to the corporate dominant technology
Elaborate approval processes favoring slowed product development cycles

Continuous innovation system
Intellectual property management system (see slide show)
Management of project portfolio and prioritization between projects
Top management participation
Ability to adapt quickly to changes in the marketplace
Culture incorporating respect for company researchers, who should be linked to the company's business objectives.

Develop a systems roadmap that shows technology breakthroughs needed in short- and long-term products/services to meet customer needs.
Establish corporate guiding principles to make the decision-making process much faster.
Establish a technology intelligence and a technology forecasting system; conduct regular technology audits
Maintain a purposeful and organized search for new opportunities and ventures
Divest from the low priority segments of your business to concentrate on the areas of your core competence
Develop a continuous and systemic innovation culture; involve cross-functional teams at every stage of the innovation process and provide them with access to every technology and resource that is needed for a new project success.
Reinvent your intellectual property management system, your IP strategy and licensing strategy
Conduct both short-focused and strategic R&D; explore benefits of new technology commercialization through in-company ventures or external spinouts
Set strategic priorities and actions and develop a corporate strategy supporting continuous innovation
Identify competitive factors and critical technologies and and formulate a technology strategy
Introduce modern techniques to motivate your staff be innovative on a continuous basis
Adopt business systems approach to managing projects aimed at development of new projects/services, or manage innovation separately through spinouts
Establish strategic alliances and joint ventures to conduct together and share the cost of strategic research
Acquire new technologies and enhance strategic technology development partnerships
Study opportunities for mergers and acquisitions with strategic partners that have the required infrastructure, global sales, marketing and distribution opportunities
Develop flexible lean production and continuous improvement systems responsive to change
Develop innovative value chain management system

7.3

Marketing & Competing Risk

Growth rates and margins decline as markets mature
Competitor's fierce reaction to your global marketing campaign
Focusing attention to market standing relative to the competition's only narrows the definition of the market, leading the organization to ignore valuable market segments
Poor assessment of effectiveness and profitability of various marketing channels

Continuous market watch; anticipating the market needs
Maintaining and defending market position
Developing new market niches: seeking, expanding, global penetration
Reinventing market development strategy
Marketing partnerships (see slide show)

Develop your competitive strategy - defend your markets from competitors, explore new markets to penetrate
Revisit continuously the laws of marketing and reinvent your marketing strategy
Establish in-house market watch and information system; develop business intelligence about actual and potential competitors worldwide
Revise critically your marketing approach
Develop realistic marketing concept
Reinvent your marketing, advertising and selling strategy
Develop strategic marketing plan
Unleash the power of your service-profit chain to gain more loyal customers
Develop innovative product selling customer relationship chain
Partner with your customers to create a future for both parties that is better than either could have developed alone
Access new markets through exporting your technology, joint ventures, or franchising.
Reinvent your global sales network
Use the competitive war games approach to simulate the competitive environment, identify weaknesses, and make critical changes that produce a more complete and effective competitive strategy

7.4

Financial Risk

Sustained periods of negative cash flow
No formal investment strategy
High risk of investment in strategic research and venturing into new areas
High cost of building competitive barriers

Operating costs reduction through optimization of production systems
Shift from venture capital towards asset based financing
Strategic research cost sharing with alliances
Divesture of segments

Look at several measures of capital employment - not just one
Balance your risk capital investments based on technology area, industry concentration, geography, and other criteria
Work back to costs from what customers are prepared to pay
Reduce inventory costs by developing lean production systems
Explore opportunities for attracting international financing and raising funds from public stock markets
Explore opportunities for managing projects as spinouts
Raise additional cash from divesting from the low priority segments of your business
Enhance shareholder value by adopting a leading-edge reporting model
Upgrade you expense control system

7.5

Team & Management Risk:

Reduced communication & cooperation among functional units; poor teamwork and coordination across various functions of the company
Absence of integration for business and systems plans
Turbulence due to expansion of the managerial team
Changing focus; unclear strategy or many conflicting priorities concerning what's going on in various departments of the organization
A top-down or laissez-fair style of leadership on the part of management that is either too autocratic or too hands-off
Unhealthy competition for power; a relative lack of leadership or managerial skills in the organization
Control systems poorly documented
Management fails to engage the organization effectively
Measurements not related to success factors
Reporting not tied to management incentives
Poor vertical and horizontal communication: employees don't know what top managers are thinking; middle-level managers don't know what's going on in other departments
Highly structured reward schemes do not motivate employees to be more innovative

Establishment of management systems enabling better control, transparency, and customer relationships
Development of employee empowerment mechanisms
Development of decentralized management structures, with managers operating within a shared context that encompasses anticipation of future events that might have an impact on the industry.

Create the mindset of growth and establish the relentless growth attitude in your organization
Develop a holistic performance management system
Manage by objectives
Start with yourself, know your own values, strengths, weaknesses and use them effectively; practice effective self-management
Empower employees, vendors, customers, and peers to measure your management performance
Delegate authority; define duties and responsibilities according to current and future organizational needs
To be a successful manager, learn how to innovate; you have only two options - to manage change or to change management
Build an innovation-friendly organization; devise catalytic mechanisms and lead cycles of reinvention
Model core values; base your decisions on the values; and hold everyone accountable to values
Find, develop and manage people partnerships
Reinvent or reengineer your organizational structure and your methods of motivating people
Do the feedback analysis as a matter of course to build on your strengths
Gain really effective control by measuring performance and conducting a comprehensive business audit
Redeploy management talents; share strategic leadership with the team and hold your management team accountable for strategic leadership
Look for trends and opportunities
Never stop learning; build a learning, teaching, and coaching organization
Be creative; nurture/champion new ideas
Lead others to discover, vision, re-plan, act and measure results; be proactive; seek timely feedback
Help every individual to find the right fit within the business
Make sure you communicate clearly and often with colleagues, superiors, and subordinates
Play the role of the team builder, coach, strategic planner and communicator; take relationship responsibility
Be explicit about what you expect and what you won't tolerate
Design reward system to reflect values