In September of this year, Lego surprised just about everyone when it announced the company would slash 1,400 jobs amid a drop in sales and profits. The surprise came because Lego has been on a growth tear for 13 years straight. In 2016, the private company reported revenue of $6 billion.
Riding a growth wave that began in 2000, the company expanded factories in several countries and grew its headcount nearly five-fold. The challenge for Lego now is to simplify its operations. "We have added complexity to the organization which now, in turn, makes it harder for us to grow further," said the Lego chairman in a statement. "As a result, we have now pressed the reset button."
Unfortunately, what’s happening at Lego today is played out across multiple industries and companies of all sizes, notes Rhett Power of Power Coaching and Consulting. Moreover, setbacks as significant as the one Lego is navigating are happening with higher frequency everywhere.
But the good news is growing a business that’s far smaller than Lego’s billion-dollar enterprise is much less challenging. If you’re looking for a short list of steps to build your small to midsize business, we’ve curated this list of five steps to grow your business from an array of reputable business sources including "Business Insider" and "Inc." Let’s get to it!
5 Steps to Grow Your Business
1. Increase Revenue From Existing Customers
There’s a long-held business fundamental that one of the quickest ways to grow your firm is to make your existing customers aware of all your capabilities and product offerings or increase your market share with existing customers. In other words, it’s more cost-effective to grow revenue per customer than it is to acquire a new customer. “Adopt an outside-in point of view by seeing your business through your customer's eyes, and, you will begin to identify new ways to delight your customers and grow your business.” Amazon is perhaps the best example of a company that methodically grew its business by offering more and more products to its existing customers. Remember when Amazon only sold books?
2. Anticipate and Quickly React to Prospect Needs
When you genuinely understand and empathize with prospects, you’ll have an easier time creating products and services that they truly want and desire. Says Inc. “This insight will help you to identify ways to deliver the products and services that exceed their needs and wants. Do this, and you will attract new customers to your business.”
Even though Steve Jobs never believed in market research, famously declaring, “It's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them,” Apple unabashedly succeeds by creating products that are among the most desired in the tech industry.
3. Find Partners that Expand Your Capabilities
Sometimes it makes more sense to rent a capability than to buy it. For instance, forming the right partnerships can accelerate your growth into new markets instead of growing that capability organically. A manufacturing company could hire an agent, for example, to introduce a favorite product into an adjacent market segment where it doesn’t have the same recognition. This tactic is also used extensively in the software industry.
4. Make Your Products and Services Indispensable for Your Customers
Integrate your products or services deeply enough within your customer’s life or business processes, and you can become indispensable, writes Inc., mainly if your offerings are innovative and highly differentiated. Slack, the office software company, proliferated because enterprises and employees loved how the software aided intra-company communication (one-to-one, and group) and helped improve productivity. For many customers, Slack became indispensable.
5. Always Be Pursuing (ABP) New Products and Market Opportunities
Business Insider, says leaders must always be “Seeking out growing and profitable markets, solving customer’s problems, and finding new market niches where your company can have a sustainable competitive advantage.” With apologies to the line “Always be closing (ABC),” from the movie “Glengarry Glen Ross,” I call this step, “Always be pursuing.”
The common denominator across all five of these steps is you have to be relentlessly obsessed with your customers. Learn and understand their pain points, what frustrates them, and know their needs.
Ben Chestnut, co-founder, and CEO of MailChimp underscores the power of your customers: “People want what’s best for them, and they can switch on a dime, because there’s always a new disruptor disrupting the last disruptor. So companies should just strive to keep changing and adapting to their customers’ needs.”
Want to get better at creating and executing your own growth strategies? Check out a Vistage executive peer group.