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Updated on May 2, 2023
In some industries, the pandemic resulted in increased rather than decreased demand. How do we manage the challenges of a sudden growth?
Rapid growth may or may not be planned. It could be the result of acquisitions, market opportunities (partnerships, new products, etc.) or even caused by a situation out of your control, such as COVID-19, which triggered the demand to explode in certain sectors.
When an organization’s growth is sudden and unplanned, it can have many impacts, particularly on production, distribution, the supply chain, and human and material resources.
As an entrepreneur, you must be equipped to stay the course and anticipate changes.
Expand your vision
When your business grows rapidly, this can be an opportunity to branch out in a new direction and grow your business model. You could choose to develop new products or, conversely, refocus your production on the most profitable or future-oriented products. However, before revising your strategy, it’s important to know the value of your products and services.
You also need to ask yourself what happens next. Growth can continue exponentially or be a temporary trend. As no one can predict the future, assess the different aspects that could influence the growth curve in order to minimize your risks and help you make the right decisions.
- How will your market evolve?
- What are your clients’ medium- and long-term needs?
- What position would you like to occupy in your market?
The answers to these questions will help determine what sets you apart from the competition and what meets the needs of your niche market clients.
To anticipate the future, leaders must be aware of movements in their market and society, and try to expand their vision to get an overall view.
Often, the main concern of entrepreneurs who are experiencing significant growth is to prepare the next orders and get supplies. However, they must also be aware of the long term. Otherwise, they run the risk of not anticipating future elements that could hinder their growth.
They must also gauge their own ability to pursue growth, even if it means slowing down for a bit if this is more reasonable for the longevity of their organization.
Adopt a dynamic strategy
Your strategy must be thoughtful and consistent with your business goals, but it cannot remain static. Your strategic planning must include a regular review and performance indicators that will allow you to judge results and adjust along the way.
Regular strategic meetings will help you continue to make the right choices for achieving your goals. Take breaks to reflect on your issues and any feedback you receive from clients, employees and partners.
Regularly take the pulse of the market to ensure that you are still in line with its evolution and with the needs of your employees and clients. Their feedback will help you make the right partnership choices and take the most promising paths for your business.
Keep your long-term vision in mind while readjusting short-term goals, even if it means reviewing your action priorities.
Plan for valuation methods
You need to have an overview of your production and assess the mechanisms and tools in place to achieve your goals, including human, material and budgetary resources.
Establish an operating framework and specific procedures and control methods. Clearly define the roles and responsibilities of each person. Otherwise, you run the risk of exceeding costs, ending up with a lower quality product/service, or surplus, or deviating from your objectives along the way.
Integrate technology into your strategic plan
Nowadays, performance and technology go hand in hand. To achieve its strategic objectives and sustain its growth, an organization must include a digital transformation component in its plan.
This is what will allow you to optimize processes and bolster quick and accurate decision-making, with more precise anticipated results.
Analytics and business intelligence tools can help you plan for operational needs and meet customer demand efficiently.
Furthermore, growth is often hindered by a shortage of labour. Technology is one way to overcome this barrier, as automating certain tasks frees up staff to take on value-added roles.
However, the tools you have in place and those you plan to acquire must align with the long-term strategic vision and reflect the evolution that is underway.
If your business is facing sudden growth, it is even more important to take a step back to see the big picture. A digital transformation audit will allow you to take stock and implement a plan that fits your situation.
To meet your immediate needs, the first step of the plan will prioritize the most profitable solutions for you in the short term. However, these solutions will be integrated into a set of changes spread out over a period of three to five years, since this is a progressive investment that aims to ensure the longevity of your business and achievement of your objectives.
All teams, in every department of the company (including the IT team), play a role in the changes underway. It is important that everyone understand the company’s strategic vision and contribute to the implementation of the action plan and its success.
Know your break-even point
The right tools can help you be more efficient. An effective enterprise resource planning (ERP) system will give you an accurate picture of inventory, cash flows and open orders, and provide you with useful data on your clients and suppliers.
You need to have a clear picture of your costs and understand where your profitability lies in order to calculate your break-even point.
There are many questions to consider, such as:
- Do you have the right system for managing an increased number of requests per day?
- Should you re-evaluate your agreement with certain providers taking into account the volume of products to be offered (e.g., get a volume discount)?
- Should your price be set according to the market share you want to capture?
- Should you reinvest profits into automation?
- Do you benefit from focusing on a single product to increase production capacity or would it be better to expand your product line?
Having a competent CFO is crucial, as he or she will be responsible for ensuring that all clients are charged the right price, all suppliers are paid and that cash flows are well managed.
Your decisions should not only be based on your financial statements. You need to know the profitability of your products and your market and stay focused on the business’s growth objectives.
Assess the new skills needed
As a business grows, it may require more manpower, but you may also want to review the skill profiles you need. New needs may require a different type of leadership, for example.
In the context of change, the most sought-after qualities in employees are agility and versatility. It is essential that newcomers buy into your business culture to help it grow.
When growth is rapid, managers may need to outsource work to meet short-term demand. You will have to prepare and structure your organization’s foundation in order to get the talent you need for the long term.
Include a health component in your analysis
Nowadays, we can no longer afford to neglect the health of employees and managers. This factor carries a lot of weight when it comes to making choices. Not only do we need to consider the resources we have in place, but we also need to prevent burnout, which could otherwise lead to absenteeism and ultimately productivity issues.
Involve your employees in the steps leading to your evolution. Open the dialogue with your staff, be transparent. Communicate with them so that they feel part of the changes, remain engaged and work together in the same direction.
Sudden growth is a source of uncertainty. You need to be prepared for everything, have a long-term vision and be flexible in order to adapt quickly. To do this, effective tools and competent leaders will contribute to your success.