I’ve developed the best business growth model and it is not what you think
Prior to launching a new coaching system for business owners, I have been reviewing the different business growth models that exist.
The desired outcome I am looking for is a model that is clear and easy to relate to; I want something that business owners look at and say:
“I am here, but, I want to be here!”
Before I explore them, lets establish their purpose.
What is the purpose of a business growth/journey model?
In my mind there are any number of reasons why we use these models depending on the context we apply them. I am a firm believer in creating visual representation of business challenges to simply demonstrate and make sense of what we are discussing. Visual imagery is easier to connect with and anchor a concept around, it makes the client’s journey more engaging.
In the case of business journeys this gets incredibly complicated because traditional growth models try and articulate so much. When you consider what goes on in companies there are so many variables we can consider, including:
– Number staff
– Age of business
– Management style
– Number customers
– Debt ratios
– Etc etc
Given the metrics that traditional models use and my experience I can draw a basic assumption; people like to be able to understand their relative position on any given model. Some people will want to go and step further and understand how they can move their position along.
I am conscious this is a very narrow minded view; the power of these models is really in their application.
But, these models are often overly complicated.
Business growth models are generally the result of empirical research by scholars who determine trends from researching and analysing any number of businesses. There is a great article in the Harvard Business review that explores the 5 stages of SME growth that goes into a lot of detail about the different factors that should be considered (https://hbr.org/1983/05/the-five-stages-of-small-business-growth). The complexity of the resulting model means that very few people will take the time to understand it and even fewer will apply it.
When consultants present such models to clients they lose their attention immediately (and this doesn’t help the reputation of self-superiority that many have gained). You cannot look at this model and quickly understand what is what.
In my mind, what we need is a business model that can be clearly understood and is relatable.
Greiner’s Growth Model
Published in 1998 in the Harvard Business Review (https://hbr.org/1998/05/evolution-and-revolution-as-organizations-grow) this is a bit more straightforward:
Greiner’s model focuses on management and control system as the business grows; the management style we see of the early-stage entrepreneur does work not as the business grows and becomes increasingly complex.
This model is a bedrock of many global consulting firms and used in context is incredibly powerful, the issue I have is that you cannot immediately relate to it.
Whilst Greiner’s model correctly articulates and tracks what we see in growing businesses, it is not particularly emotive or engaging – we don’t strive to grow a business so that we can implement more complicated structures and control systems.
Stages from Shirlaws
Darren Shirlaw developed a growth model he called stages, this was designed to remove the metrics and focus instead on the feelings within the business.
I have had to remove the link to the model because Shirlaws do not want it on 3rd party websites, it is however in the public domain if you search for “shirlaws AND stages”.
As businesses grow and face new challenges, different emotions are experienced by the business owners and staff alike. This model is excellent for relating to through the emotional journey:
“I was excited at first, then became frustrated and disillusioned.”
It resonates with business owners because they can recognise the feelings and challenges at each phase of growth.
There are also 5 growth stages: start-up, growth, plateau, advanced growth, decline.
The running theme is that if you don’t keep evolving and adapting you will become irrelevant in the market and decline. It should be noted this model was developed by a professional services business trying to win clients so there may be some bias to the journey. This variant on Greiner’s model uses the same 5 stages:
However, this is getting closer to the type of model I am looking for because business owners can relate to it. Yet it still requires an explanation before you can understand it and picture your journey. I should note that when told properly this is one of the most powerful business stories I know and it will engage and captivate a room.
Yet, I want to create something that you can look at and immediately recognise, then as you explore it further you can peel back the layers that are applicable to you. To do that I’ll dig deeper into the use of models.
How are these models used in practice?
Business models are traditionally used by consultants to hep them identify what is happening within a company and to give credibility to their process. For example, if you can walk into a company and articulate the to the board what you would expect to see without talking to anyone, it suggests some magical insight. A form of witchcraft.
The reality is that businesses at different stages exhibit the same traits; by simply looking at a couple of metrics you can make an educated guess around what you will see going on.
This is where the power of the model begins to come into play; they are relatable and suggest that other people are going through a similar process. Don’t be embarrassed, it is totally normal to see these changes going through a company.
Better than that, so many others have been here before that we can learn from their mistakes and experiences. Take Greiner’s Model for example, we know that if we are in phase 2 of growth the company is moving beyond the control of the original founder. Leadership style will need to change if we are to ensure survival.
This makes perfect sense, as a business gets bigger one person cannot control and influence everything. Greiner’s model then, can be used to demonstrate this to business owners and explain the process they are going through. There will always be resistance and without a visual cue it would be harder to achieve acceptance and buy-in.
There are a plethora of business books available (Google “business growth books” and you get over 1.1m results). Whilst the quality varies hugely, the reason they exist is that more business leaders recognise that they need support; they cannot do everything on their own.
However, these same people are also reluctant to engage an expert. Instead, they buy every book they can find on a topic in the hope it will give them the answers they are looking for. These are generally:
“what is going on?”
“what can I do about it?”
I recently took up the piano again and started with an online course from Udemy; it was very good and helped me progress. However, I hit a wall of learning and stopped making progress. I needed to do more than just watch and read, I needed engagement and feedback.
There is no denying that some people teach themselves instruments and end up playing at a professional level, however, they are few and far between. The majority have lessons and support along the way.
The same is true in business, we can read everything on a topic but struggle to actually apply it to our business. Not trough lack of ability but simply because doing such things on your own is genuinely really difficult! There are not many truly self-made business leaders who can hold their hands up and say “I did it all on my own.”
Back to the purpose of the business growth models
Having studied for a degree in business and worked with SMEs for 15+ years I have seen first hand why people want models and systems. They are looking for answers and it comes back to understanding the current situation and what action is required to move forwards.
There is a simplification of the Churchill and Lewis model above which looks like this:
This states you are in 1 of 5 phases – not dissimilar to the Shirlaws model – start-up, growth, maturity, decline or renewal. Anyone can look at this and understand what is going on:
1. a business starts,
2. it grows a bit,
3. performance seems to stall,
4. it needs to decide what to do,
5. it either…
– a. takes action and goes through a renewal
– b. does nothing and goes into decline
This is getting closer to the simplicity of model I am looking for; the challenge is that as a business owner if I look at that it is not very relatable. I might appreciate I’ve gone through a start-up phase but what does growth actually mean? It is so generic that it doesn’t help me understand what I am seeing and what to do about my situation. It lacks context because it is more conceptual, which can be advantageous for quickly understanding where a business sits. What it doesn’t do is give us any understanding of why a business is going through the challenges it is, what to expect next or what to do about it.
Where does this leave me?
Having assessed three of the most widely used growth models I can draw a few conclusions:
– the more powerful a model in providing answers the more it needs to be explained and understood,
– conceptual models are more easily relatable,
– more business leaders are recognising they face challenges and cannot do it alone,
– the business book market is saturated with self-help titles,
– it is easy to read content but harder to apply it in context.
We live in a world where people don’t like to be sold to anymore (https://www.gitomer.com/people-dont-like-to-be-sold-but-they-love-to-buy/).
Our buying habits have changed; we research everything online before making a purchasing decision; generally to check price and reviews (https://bmmagazine.co.uk/marketing/5-things-a-customer-will-do-before-they-buy-from-you/).
As such business service providers need to change their message and engage potential customers on a journey of self-discovery.
Through providing a taste of what you do the business owner can try before they buy; publishing content to which your audience can relate you will build a following.
Explaining some of your processes enables business leaders to size them up against their own company and understand the relevance.
Building a credible reputation ensures that buying decision go in your favour.
Is this what am I trying to achieve with this model?
Going back to the essence of the challenge I have set myself will enable me to re-connect with the point of this exercise.
Create something that makes people go:
“Oh yes we are there,
I want us to be there”
In my experience this reaction is not achieved by models that talk about management systems, scale and other metrics. We don’t want to be inundated with complexities; we want something we can quickly understand.
Once you engage with an idea you want to know more about it.
The simplest growth model will set you alight and spur you into action, whatever that action may be. On a basic level it might be to try harder, you might read a couple of books on the subject, you might talk to a professional.
For me, the best business growth model should make you stand up and say, “I want to do something.” As a business coach I work with frustrated business leaders and unless they have an appetite to do something positive there is not value in working with them.
Therefore, this is ‘the business model’ I have created:
“We are currently at A and we want to be at B, however, we don’t know what to do.”
The journey could be about product, sales systems, people issues, financial controls or capacity management. What matters is identifying the blocks; what is stopping you getting from A to B. Enter then the consultant with the experience to help the business understand what is really happening and draw on their expertise to coach you through the required change.
As a business coach this is where I live; clients want to move from A to B but are not sure how to. When I understand what a client is trying to achieve, I can introduce the models, concepts and systems that are relevant to their situation.
It all starts with a conversation to understand what is going on and why.