Growing a Business vs Business Administration

I recent­ly had a con­ver­sa­tion with an entre­pre­neur who was enjoy­ing great suc­cess in his first two years of busi­ness, and very excit­ed about future growth opportunities.

When asked for my per­spec­tive and advice, I shared some of the expe­ri­ences I’ve had through amaz­ing clients, over the years – some do’s and don’ts, and big mis­takes – includ­ing run­ning a busi­ness instead of grow­ing a busi­ness. This usu­al­ly hap­pens for two reasons:

• Always being on the front lines, deal­ing with cus­tomer needs, con­cerns and frus­tra­tions can be exhaust­ing. If a CEO has been focused there for 5, 10 or 15 years, step­ping back can be a break
• Cre­at­ing order from chaos can con­sume you because there’s so much oth­er stuff to do. You can eas­i­ly stay busy for­ev­er with projects, clean­ing up sys­tems and plan­ning for the future.

The chal­lenge is to be OK with a small amount of messi­ness so that you can con­tin­ue to ded­i­cate the ener­gy need­ed to grow the busi­ness. If you put too much ener­gy into opti­miz­ing or admin­is­ter­ing, growth nor­mal­ly slows down. As in the 4 Forces of Growth mod­el I recent­ly shared, you can either be in the Improve­ment quad­rant or the Growth quad­rant – and you have to fight to stay in the Growth quadrant.

So, what does that look like? It looks like the leader of the busi­ness spend­ing time talk­ing to and get­ting feed­back from cus­tomers and peo­ple in the mar­ket (ven­dors, part­ners or poten­tial part­ners) to get sense of where mar­ket is going — and the insight to deliv­er addi­tion­al prod­ucts or ser­vices, or to mod­i­fy exist­ing ones, to make sure you’re doing a good job of meet­ing your cus­tomer needs in a way that’s more competitive.

Some prime examples:

• A CEO we work with recent­ly was thrilled to say they had been doing well over the past few months and want­ed to know what was dri­ving this new busi­ness. As they dug deep­er to real­ly under­stand, they found that the trans­ac­tions were with cus­tomers who were dif­fer­ent from usu­al – and real­ized that, if a new cus­tomer was buy­ing today, they could ask a bunch of new, proac­tive ques­tions to find out more, and poten­tial­ly change their approach to business.
• Anoth­er CEO called me a few years back when growth had stopped. As I dug in to under­stand why, in a boom­ing econ­o­my, I noticed that, although they had a great sys­tem for cus­tomer feed­back, no one was read­ing or respond­ing to it. On the way out of the door, I asked for a copy of the feed­back to read on the way home and was shocked to hear how angry the cus­tomers were on three con­sis­tent issues. No one was pay­ing atten­tion, the issues weren’t get­ting addressed and the com­pa­ny was frus­trat­ing and los­ing cus­tomers. Peo­ple were vot­ing with their dollars.

Man­age­ment on the Front Lines

This reminds me of the well-known term ​“Man­age­ment by Walk­ing Around” (from in Search of Excel­lence by Tom Peters and Robert H. Water­man Jr.) — to which I’ll add ​“Man­age­ment by being on the front lines so that you can real­ly under­stand what’s going on from the per­spec­tive of cus­tomers, com­peti­tors and the market.”

Yes, there’s a whole bunch of things to approve and admin­is­ter in a busi­ness but you want to make sure you don’t get lost in it — and keep enough ener­gy on things that mat­ter and keep your busi­ness growing.

The Chal­lenge

• How appro­pri­ate is your ratio of how you spend your time between grow­ing and improv­ing or run­ning your business?
• Based on your aspi­ra­tions, how might it change?