4 Strategic Growth Obstacles to Overcome as You Scale

Strategic Growth Obstacles
Unless they get lucky, most leaders need a distinct set of strategically timed growth initiatives to create high growth.  In fact, recent research by McKinsey found that organizations that mastered two or more diversified strategic growth initiatives grew faster than their peers.  Before you create strategic clarity and determine which strategic growth bets to make, we recommend that you pay attention to the most common strategic growth obstacles that may get in your way.

High Growth Strategies
There are a number of organic and inorganic growth levers that leaders can pull to profitably scale. A few common ways to ignite growth include additional funding, mergers and acquisitions, business model innovations, restructurings, reallocations and optimizations, digital transformations, diversification, market expansions, and new product development. Each has pros and cons.

The interesting part of the McKinsey research is that the highest growth companies employ multiple growth strategies simultaneously.  All the more reason to first take a close look at where your organization may falter as you ask it to create higher performance. Do not underestimate the importance of carefully examining how work gets done before you launch an all-out strategy for growth.

The Most Common Strategic Growth Obstacles
As you consider how you create high growth during strategy retreat facilitation, think through possible strains on how work currently gets done. Try to predict how and where your plan for growth needs extra support to withstand the strains of new demands.

• Strategic Ambiguity
  Distraction and bandwidth may be the most underestimated strategic growth obstacles for most leadership teams. One of the best ways to sabotage growth is to have so many competing strategic priorities and initiatives that it is almost impossible to devote enough time, energy, and focus to get them right.

  In fact, one recent client had 32 strategic priorities — far too many to create actual progress in the areas that mattered most.

  To overcome this strategic growth obstacle, commit to two-to-three strategic growth initiatives and focus the entire company on seeing them through.

• Misaligned and Underestimated Cultural Norms
  Growth strategies must go through your culture to be successfully implemented. Culture norms represent how work truly gets done on a day-to-day basis. Our organizational alignment research found that culture and strategy alignment accounts for 71% of the difference between high and low growth companies regardless of industry.

  There is no doubt — a misaligned workplace culture definitely creates strategic problems. Once your growth strategy is clear, agreed to, and prioritized, invest the time to shift any current cultural norms to align the way work gets done with those specific growth strategies.

  You will know you are on the right path when your cultural norms help, and do not hinder your strategic plans for growth.

  For example, a recent client was growing the top line over 20% per year without improving profitability because they kept having to add more people to support growth demands.  To create more profitability, they undertook a digital transformation to optimize and automate outdated ways of working.  Unfortunately, the transformation hit a cultural roadblock because teams were not accustomed to sharing information, resources, or power.

  Needless to say, the millions spent on a digital transformation did not reap benefits until their decision making culture shifted to align with the new ways of working.  Just one of ten cultural dimensions that must be aligned to support high growth; misaligned ways of working can derail the best of strategic intentions.

• Insufficient Structures, Systems, and Processes
  Are your structures, systems, and processes flexible and robust enough to accommodate the additional stresses and strains of high growth? Depending upon your strategies for growth, you will need to predict the effect of high growth on everything from supply chain requirements to the overall customer experience, from changing technology needs to financial systems, from employee onboarding to product development.

  The challenge is to predict where extra support will be needed as growth places greater stress on existing structures and then to be prepared to either prop them up or align them with your growth strategies.

  Will you need to shift, add, or remove hierarchical levels? What is required to “run” and “grow” the business at the same time? Will information get to the right people in a timely way?Pull together a cross-functional team to predict where the structures, systems, and processes will need shoring up and then build a plan to make it happen.

• Lack of Capabilities
  Growth strategies must also go through your people to be successfully implemented.  While it can be tempting to look at growth initiatives as “development opportunities” for high potentials, you need your best and most experienced leaders with the right capabilities to lead strategic growth. While it is smart to have a diverse and cross-functional team, make sure that you have the right capabilities to truly drive growth.

  Notice that we did not say the right people.  Why?

  Because people often focus on the “available people” or the “politically correct” versus the people with the right capabilities.

  The long list of required capabilities which should be tailored to your unique situation includes having high levels of strategic thinking, emotional intelligence, motivational skills, customer-centricity, business acumen, industry and product knowledge, accountability, change agility, communication, workload management, project management, and political savvy

The Bottom Line
High growth requires high levels of focus, alignment, and talent.  Do not underestimate the most common strategic growth obstacles that derail the best of strategies. Plan ahead for the strains that fast growth will put on your employees, your culture, your processes, and your organizational structures.

To learn more about how to get aligned for higher growth, download How Strategic Clarity Distinguishes High Performing Leaders – The Elite 6%