Posted on February 27, 2013 @ 02:31:00 PM by Paul Meagher
I'm slowly making my way through the free online course, Grow to Greatness: Smart Growth for Private Business, Part 1, taught by Edward D. Hess (who authored a book by the same name).
He makes the interesting point that growth is not always good if you are not ready for it; in fact, it can do major damage to a company that is not ready for it. With that in mind he came up with a Growth Risks Assessment Tool that consists of a series of questions companies should answer before deciding to pursue a path of further growth:
- Why should I grow?
- How will we grow?
- How much should we grow?
- How much growth can we afford?
- Do we have enough people?
- Do we have the right people?
- Do we have hiring and training processes?
- Do we have adequate financial controls?
- Do we have adequate quality controls?
- How will growth create risks for ...
- Customer service?
- Customer experience?
- Cash flow?
- Supply chain, raw materials and suppliers?
- Distribution and delivery?
- Financial safety net?
- How will we mitigate those risks?
- Do we have adequate daily information to monitor these risks?
- Who will help us monitor, manage, and correct such risks or results?
- Do we need to pace growth?
As an example of growth that was not so good for a company, we can learn from Toyota who became the number 1 automotive company but ended up having severe quality issues that has set them back significantly. Perhaps if they had used the Growth Risks Assessment Tool before rushing headfirst into being number 1, they would have recognized some of the risks that lay in their path and taken appropriate steps to mitigate those risks.