6 Principles of Business Growth.
Updated 02 January 2024.
It is a time of great uncertainty in the business world. The economy is in flux, new technologies are emerging, and the old ways of doing things are no longer working. Many leaders are struggling to adapt, and they are making mistakes that cost them dearly. In this ever-changing landscape, businesses must have a clear understanding of how to grow and thrive. That's where the 6 Principles of Business Growth come in.
These principles are universal, scalable, replicable, gradualism, optionality, and flexibility. They provide a roadmap for businesses to achieve sustainable growth in any context or situation.
What is business growth?
Business growth is the process of making an organisation more successful. It can be done through various means, such as expanding into new markets, launching new products, or acquiring new businesses.
There is no one-size-fits-all formula for business growth. However, there are certain principles that all successful business leaders follow. At insight & foresight, we believe that successful growth plans are underpinned by 6 core principles.
These principles are:
Growth processes should be universal.
The growth process should be scalable to achieve different levels of intensity and scope.
The growth process should be replicable to achieve consistent results in various markets, geographies, and customers.
The growth process should be gradual to avoid sudden changes.
The growth process should include optionality(1) to allow different ways of achieving growth.
The growth process should be flexible to adapt to different circumstances and needs.
If you can ensure that your growth process adheres to these six principles, then you will be well on your way to achieving successful business growth.
The 6 principles for business growth.
Let’s look at each principle in detail.
Principle 1: Universality.
The universal principle is not about growing everywhere at the same time, rather it is about having a growth process that can be applied to any part of your business to support growth as required. This is the growth framework that works for your business. It could be built around innovation, technology, efficiency, cost-reduction profit maximisation etc. The key is that whatever it is it can be applied universally across your business. Chances are it is tied closely to the "how" you generate results rather than the "what" you do. An example here could be "customer service excellence" as a growth driver. If it can be applied to all your business areas you can state that it is a universal growth principle that supports growth everywhere. Another example could be "technology as an enabler". If technology can drive growth across any business area then it is an element that business leaders should have at the core of their growth plan.
Focusing on universality also supports the breaking down of silos in a business. It also delivers a more integrated operations plan as business units view universality as a strength of the growth plan and emphasise the shared components of growth. The fact that it can work across the whole business also means that all areas of the company are working towards a common goal, leading to a more cohesive and united approach to growth.
Principle 2: Scalability.
The scalable principle is about being able to replicate the success of your growth process at different levels, in different business areas, or even with different types of customers. It is also about being able to turn the dial up or down as required to achieve the desired level of growth. The key here is not just to have a process that can be repeated but also one that can be applied with different levels of intensity.
When the business can scale up or down the growth process to suit the business needs it is scalable. An example of this could be a business that has a technology platform that supports growth through automation. The business could use this technology to automate more processes as it looks to grow. Conversely, if business conditions changed and the business needed to reduce costs then it could use the technology platform to automate processes and save costs. The important thing is that the business has a growth process that can be applied at different levels and intensities as required. This allows the business to remain flexible and adaptable in its growth approach.
Principle 3: Replicability.
The replicable principle is about being able to consistently generate the same results from your growth process time and time again. This could be seen as the holy grail of business growth, being able to achieve consistent results regardless of the business environment or circumstances. The key here is to have a robust process that can withstand the test of time.
When the business has a growth process that consistently delivers results it is replicable. An example of this could be a business that uses a lean manufacturing process to drive efficiency and cost reduction. If the business can consistently use this process to reduce costs then it is replicable. Another example could be a business that uses a customer focus group process to drive product innovation. If the business can consistently use this process to generate new product ideas then it is replicable. The key here is to have a well-defined process that can be followed each time.
Having a replicable growth process also allows for more efficient use of resources and time. Instead of constantly reinventing the wheel, the business can rely on its established process to achieve results. This also enables the business to focus on other important areas such as customer satisfaction and employee development.
In addition, a replicable growth process allows for easier scaling of the business. As the business expands and grows, it needs to have a reliable process in place that can be replicated in different locations or with different teams. This ensures that the business remains consistent in its approach and maintains quality standards.
Principle 4: Gradualism.
The gradual principle is about making small incremental changes over time rather than large sudden changes. This allows you to avoid the business risk associated with radical change and also allows you to test and learn as you go. The key here is to make small changes that you can learn from and build on over time.
Gradual growth is not necessarily slow growth. The business can still achieve significant growth by making small incremental changes over time. The important thing is that the business avoids the business risk associated with radical change.
When the business makes small changes over time to its growth process it is gradual. An example of this could be a business that is looking to improve its customer service. The business could make small changes to its processes and procedures over time to gradually improve its customer service. Another example could be a business that is looking to improve its product quality. The business could make small changes to its manufacturing process over time to gradually improve its product quality. Gradualism allows the business to make continuous improvements and adjustments rather than large, disruptive changes.
Principle 5: Optionality.
The principle of optionality is about having more than one way to achieve growth. This allows you to have a Plan B (or even a Plan C) if your initial growth plan doesn't work out as expected. The key here is to have multiple options that you can pursue if your primary option fails.
Optionality is about preparation and not prediction. Using foresight is a great way for businesses to build optionality. Looking forward 5 to 10 years ahead and thinking about what might change and preparing for it gives you options as futures appear. By creating and testing the growth plan across a range of futures scenarios more options can be created.
When the business has multiple options for achieving growth it has optionality. An example of this could be a business that is looking to enter a new market. The business could have multiple options for how to enter the market, such as through export, joint ventures, or licensing. Another example could be a business that is looking to develop a new product. The business could have multiple options for how to develop the product, such as through in-house development, joint development, or acquisition. The options selected will depend on what happens over time however all options can deliver the growth required.
Having optionality also allows for flexibility in decision-making. If one option is not working out as expected, the business can pivot and pursue another option without being too heavily invested in the initial choice. This reduces risk and increases adaptability, both important factors in achieving business growth.
Principle 6: Flexibility.
The flexibility principle is about being able to adapt the growth process to different circumstances and needs. This allows you to be responsive to change and also tailor the growth process to the specific needs of your business. The key here is to have a growth process that is adaptable and can be easily changed to meet the needs of your business.
When the business has a growth process that is adaptable and can be easily changed it is flexible. An example of this could be a business that has a marketing campaign that can be quickly adapted to target different customer segments. Another example could be a business that has an R&D process that can be easily adapted to different business environments.
A business that has good optionality and flexibility is usually resilient. If Plan A doesn't work out, the business can quickly switch to Plan B. If the business environment changes, the business can quickly adapt its growth process. This allows businesses to be responsive to change and maintain a high level of growth.
Successful Business Growth Process.
The six principles of successful business growth are universality, scalability, replicability, gradualism, optionality, and flexibility. These principles can be applied to any business context or situation. The business growth process can be adapted to different levels of intensity and scope. The process can be repeated multiple times with consistent results. Change occurs slowly and incrementally over time. There is more than one way to achieve business growth. The process can be adapted to different circumstances and needs. These principles can help businesses to grow and drive long-term success.
The key to a successful business growth process is to understand and tailor it to the specific needs of your business. While these principles may seem straightforward, it is important to put them into practice for maximum effectiveness.
In uncertain times, it’s more important than ever to have a growth plan in place. By following the six core principles of successful growth, you can deliver growth that is sustainable and consistent. Even if your business is facing headwinds in the current market conditions, with a little bit of effort you can put yourselves back on the path to success.
So what are you waiting for? Start putting these principles into action today!
References
(1) Taleb, N. N. (2013). Antifragile. Penguin Books.
