Artificial Barriers

In my conversations with successful entrepreneurs and executives charged with profitably growing their businesses to the next level, I am struck by the frequency “artificial barriers” to growth crop up. By artificial barriers, I am referring to those “beliefs” that are expressed as gospel about obstacles on the firm’s “journey”, which partially or fully prevents the business accomplishing its’ desired goals. For example, access to capital, access to human or physical resources, customers’ perception of the firm’s brand in the market today and so on. Dependent upon the internal politics, those beliefs then take hold of executive decision-making and gain an absolute or immovable  status (“no-no”) when determining strategic alternatives. Small and family businesses are the worst offenders.  For example,

Acquisition-Driven Growth: “We are doing well with mid-market customers but when we compete for the next tier, we lose out to our competitors because we lack the physical global presence or resources to serve those clients. Those clients are very attracted to the largest advisory firms. If we want to acquire those types of clients, we need to look at selling ourselves into a larger firm.”  

Organic-Driven Growth: “For us to attract top producers, we need to pay way above our competitors. Top producers aren’t going to take a risk with us, in a way that they might with top firms. I struggle with that kind of investment as opposed to hiring more of the same type of producers we have in the firm today, who do a fine job making us and them money with our mid-market clients.”

Collaboration-Driven Growth: “Those types of buyers (large national and international companies) wouldn’t consider our firm. We are way too small for them and if we were to try and create some form of alliance, the complexity of doing so wouldn’t be worth it. I have been down that road beforehand.” 

When  you hear views expressed around the Boardroom, which category can you be sure they fall into? (accurate, largely untested or invalid). Those are the only three possible answers.

Confronting those beliefs requires a rational determination that is best accomplished by considering the following questions:

1. Is the belief relevant to us? Ask your colleagues where is the hard evidence or strong anecdotal facts. (Forces an objective assessment of the facts, the changes required and the environmental conditions which must exist for the business to grow and expand successfully.)

2. Is the belief relevant now? Ask, is there a reason for the speaker to introduce this belief now? For example, they want to preserve precious time and cut off exploring an avenue they believe will result in a lost opportunity or an event has occurred dramatically increasing the urgency (a key shareholder has told top management, to “get on with it!”)

3. Is the belief relevant in these special circumstances? Have they tried this course of action in the past and failed? Is the speaker trying to retain control of the discussion or a favoured alternative?

The point here is that executives in a strong and dynamic business should challenge each other, where it is reasonable and appropriate to do so. Decision-making needs to be based on facts, not fiction. It is each executive or manager’s duty to make sure that the beliefs system that governs the future direction of the business is accurate, to the best of their ability.

© James Berkeley 2014. All Rights Reserved.


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