Successful Growth Companies Take Steps To Rise To Occasion And Weather Storm

There can be little doubt that all businesses have continued to work within a turbulent and volatile trading environment since last May's Fast Growth 75 report. 

Whilst we continue to see successful businesses exhibit similar behaviours to those described in last year's report, namely looking internally, understanding the numbers and their customers' needs, working hard at pricing, holding on to key talent and adapting in order to stimulate growth, this year's succession of macro economic shocks and general economic malaise will have surprised and affected even the best prepared companies. 

It is almost impossible for many businesses to predict and plan for macro events such as the continuing Eurozone crisis and the spread of contagion to the stronger Euro economies, the contraction in the US and their respective contributions to the shrinking export markets and reported collapse in output, demand and ultimately orders. 

However, whatever the wider economic backdrop, our experience is that in times of crisis, growth companies and managers don't hide, adopt a victim mentality or make knee-jerk decisions which potentially prolong the difficulties. Instead they continue to ride the challenges and interrogate their own businesses and operations to ensure they are robust and adaptable as well as adopting opportunistic thinking and proactive strategies. 

The Fast Growth 75 companies have shown again that it is possible to profit even during challenging times, drawing on their own expertise and that of their advisers to scrutinize operations, making decisions and responding to the shocks which have rippled through the global economy, but also adapting their existing businesses, responding to change and looking to identify and secure new opportunities and a chance to continue to grow even when the wider economy is in the doldrums. 

The UK government has been trying to assist by tackling some of the hurdles to growth such as red tape, tax and funding with the continued focus on banks. However confidence remains muted that governments have the tools and power to arrest or even slow the financial difficulties and with the UK Treasury forced to focus on reducing debt and having little money to spend, increasingly it is down to the private sector to try and get the UK out of the doldrums. 

There is no easy or comprehensive answer, but here we offer three common traits we often see taken by businesses who are prospering: 

Adopt positive and opportunistic thinking 

A business' future is not determined solely by external economic events, but by its response to those events.

Growth companies don't resign themselves to a downturn, they make their own luck by looking for the silver lining, being alert to changes in their marketplace and using them to their advantage, taking action in new and creative ways to get closer to key customers and targets, focusing on solutions and long term prospects and ultimately getting in shape to seize any growth opportunities.

Build resilience to thrive in tough times

An upturn is not round the corner and indications increasingly suggest that wider growth prospects are deteriorating and will not rebound soon. To keep moving in the right direction and withstand the external shocks that can often unsettle a business, growth companies are building their resilience and getting themselves ready to change course and move quickly when needed.

Many growth businesses have already adapted to operate in a low growth environment. They have not just
cost cut or reacted to individual crises or setbacks but are constantly revising business models and strategies and strengthening their internal culture to ensure operational flexibility, employee loyalty and team collaboration.

Invest in key areas – get ahead of the competition

During times of cost cutting, downsizing and commoditizing products and services it is easy to lose focus on identifying and pursuing new growth and profit opportunities.

Growth companies often already have their house in order so can allocate resource to identify what they do best and focus on what products, services or customers are key to profitability and give them increased attention.

They ensure they are investing as well as cutting in order to ensure they remain visible in their marketplace and are well placed to accelerate even more quickly when the tough times abate.

They have also examined whether the competition has become distracted in a way which provides opportunities to attract new profitable customers and talent, make strategic acquisitions at a good price, introduce new products or service lines and differentiate themselves. 

And, lastly, there is one trait which is common to all growth businesses; positivity and hard work. As we all know, there is no substitute for hard work and those businesses with a strong work ethic, leadership, positivity and clear strategy will rise to the top. 

Article written by Chris Worrell, partner for Fast Growth 75 Report 2011.