Growing a Business: Increase, Improve, and then Change

When it comes to growing a business, there are three primary mechanisms that can be applied to achieve sustainable growth: increase, improve, and change. These mechanisms form a sequential framework that can be applied to any business, whether you’re preparing for a sale or identifying growth opportunities. By following this framework, you can ensure that your business grows in a structured and strategic manner.

If Some is Good – More is Better

Increase: Doing More of What Works

The first mechanism for growth is to increase. This means doing more of what your business already does well. The focus here is on scaling operations efficiently by identifying and overcoming constraint points. Before looking in different directions for growth, it’s essential to maximize the successful practices already in place.

For instance, if a company excels in a particular product or service, the first step should be to explore how much more of it can be done. This involves examining the scalability of these operations and determining the points at which constraints might set in. By addressing these constraints, you can push the boundaries of what your business is capable of achieving. Often, businesses overlook this step and prematurely shift focus to new initiatives without fully leveraging their existing strengths.

Improve: Enhancing Quality and Efficiency

Once you’ve maximized your current operations, the next step is to improve. This involves enhancing the quality and efficiency of what you are already doing. The goal here is to make your operations more profitable, effective, and satisfactory for your clients. Improvement leads to better client satisfaction, generating more goodwill and positive word-of-mouth for your business.

There is always room for improvement, whether it’s streamlining processes, upgrading technology, or enhancing customer service. For example, if a business is already performing well, look for ways to increase profitability by reducing costs, improving product quality, or speeding up delivery times. The key is to consistently refine and optimize existing operations to achieve better results. This step ensures that your business is not only doing more but also doing better.

More, Better, and Only Then Consider Different

Change: Introducing New Initiatives

After maximizing and optimizing your current operations, the final step is to change. This involves introducing new or different activities once the first two mechanisms are fully leveraged. Change should be approached cautiously and strategically, ensuring that any new initiatives complement the core business.

Consider adjacent or supplementary offerings that align with your existing operations. For instance, if a business primarily sells a particular product, it might explore offering complementary products or services. However, it’s crucial to avoid veering too far from the main business focus unless it’s a strategic pivot. Radical changes should only be considered when current operations are fully optimized, ensuring that any new direction is meaningful and not just reactive.

Prioritization and Implementation

Sequencing and Strategic Impact

The sequence of increase, improve, and change is designed to ensure a balanced and sustainable approach to growth:

1. Increase: Focus on scaling up existing successful practices. This establishes a solid foundation for growth.
2. Improve: Optimize these practices to enhance quality and efficiency. This step ensures that your business is not only growing but also improving its operations.
3. Change: Introduce new initiatives only after the first two steps are maximized. This ensures that changes are strategic and aligned with core business objectives.

By following this sequence, businesses can avoid the pitfalls of overextension or misaligned initiatives. This structured approach promotes disciplined growth, reducing the risk of pursuing changes prematurely.

Practical Implementation

Implementing these mechanisms requires a clear understanding of your business operations and a strategic approach to growth. Here are some practical steps to apply these principles:

1. Identify Constraints: Begin by analyzing your current operations to identify constraint points. Determine what limits your ability to do more and find ways to overcome these barriers.
2. Enhance Operations: Focus on continuous improvement by regularly reviewing and refining your processes. Look for opportunities to enhance quality, reduce costs, and improve customer satisfaction.
3. Strategic Innovation: When considering new initiatives, ensure they align with your core business and complement existing operations. Evaluate the potential impact of these changes and implement them gradually to minimize risks.

Real-World Application

In my experience, applying this framework has proven effective across various industries. For example, a local retail business might start by increasing inventory and expanding store hours to serve more customers (increase). Next, they could improve customer service training and streamline checkout processes to enhance the shopping experience (improve). Finally, they might introduce an online store to reach a broader audience while still maintaining their core retail operations (change).

Conclusion

Growing a business involves a sequential focus on increasing current successful practices, improving these practices, and then considering strategic changes. By following this structured approach, businesses can achieve balanced and sustainable growth. This framework provides a comprehensive guide to maximizing and optimizing existing operations before venturing into new initiatives. The disciplined application of these principles ensures that growth is strategic, reducing the risk of overextension and misalignment. Ultimately, the path to successful business growth lies in doing more of what works, making it better, and then strategically expanding into new areas.