Monday, July 13, 2015

Push for Growth


Is Growth for the Sake of Growth What You Really Want?

Leaders everywhere are struggling to find the best way to satisfy customer needs while maintaining a reliable, skilled, and engaged workforce.

I recently met with Bill, a client of mine, and asked him this clarifying question, “Can you tell me why you bought out three other companies in the past year and a half?”
Bill is the owner, and president, of a service company he started 25 years ago.

 “That’s simple. To grow,” he replied.

“Why do you want to grow?”

“Why not? Growth is good.” He smiled at me in a patronizing way that indicated he wasn't sure why he'd hired someone who didn’t understand such a simple concept to help his company.

 “Well,” I replied, “here’s the reality. Since you started this growth campaign, two long-time key leaders who were instrumental in the success you enjoyed in the decade and a half before you decided to acquire these companies, have left. Two of your three remaining top-level managers don't trust each other and are in constant conflict. Most employees fear one and feel sorry for the other. They're burned out; many are thinking of leaving and have resigned themselves to do what they need to survive and nothing more. Finally, a large number of customers have closed their accounts in the past six months. Let me ask you this, have the results of the changes you’ve made met your expectations? Is this really what you planned to do?”

Bill didn't respond because he didn't like being asked those questions. I wouldn't either. But, we both knew the answer was, “No.” He was learning the hard lesson that growth for the sake of growth is no more effective at helping you get what you want than punching yourself in the face because you want to know what it feels like to punch someone in the face.

Change is NOT Evil!

Neither is Bill. He really did want to make positive changes. He certainly got changes just not the ones he really wanted.  Successful change happens for organizations because of one, or more, of the following reasons:
  1.  Relationship Dynamics- People connect with each other when they see a net-positive value-proposition in doing so (intrinsic, extrinsic, or a combination of both) and they adjust their level of investment according to the value they get out of it in relation to their expectations.
  2. Innovation- Someone does something new and different that creates the potential for a redistribution of one or more resources in a given culture, community, or market.
  3. Growth- Someone seeks the prospect of meeting the needs of more people than they have in the past.

The order of the three points listed above is important… critical actually. There is a very strong human tendency to want to cut around the process and get straight to the good stuff. It’s easy to see that growth can lead to more mutually beneficial relationships, more business. More business can mean more profits so that’s where we think we want to focus.

The Change-Pull Effect

There are two fundamental problems with trying to create growth for the sake of growth:
  1. It undermines the ability to deliver a net-positive value for all key stakeholders involved because it assumes no considerations are necessary to continue to meet their needs before growth-focused action occurs.
  2. It assumes innovative solutions that will redistribute resources in a mutually beneficial manner for all stakeholders involved will just happen.

So, in the case of Bill’s company the desire for growth created different and new behaviors (purchasing new companies with the prospect of serving more customers) that resulted in a net-negative value delivered and over time the various stakeholders engaged less at variable rates. Some key leaders and customers divested completely while others adjusted how they related to each other and the company.

Bill and his company were experiencing problems caused by the “change-pull effect”. It happened when Bill created a vacuum through self-serving changes in how his company operated expecting everyone to adjust and fill in the gaps. It’s a technique…not the recommended technique…but a technique, just the same. What typically happens is: Growth pulls away from the innovation because the affected stakeholders perceive they’re being excluded so they resist. They pull back.

The whole point is, real mutually beneficial relationships are magical- When one occurs, every stakeholder involved walks away from interactions, transactions, and situations feeling like they've gotten more out of it than they put in. See? Magic.  It’s the reason why you can’t skip past the relationship dynamics; the magic will be lost.

The change-pull effect doesn't only happen during acquisitions; it can also happen when an organization attempts to launch new products, new, services, new customers, new locations…any time changes are made to grow for the self-serving sake of growth.

When You're at Risk

  • The best time to stop, listen and adjust is before you create negative pull-change effects. In other words when this kind of conversation happens:
Any employee- “How-are-we-going-to…”

You- “We’ll figure it out.”

Any employee-“I just wish we'd think this through first.”
  • The second-best-time to adjust is as soon as possible after you’ve created negative pull-change effects.  The conversation will probably sound like this:
 Any employee- “Now that we've,  <>, how am I supposed to….?”

You- “You’ll figure it out” (See what you did there? Your employee does.)

Any employee- “OK, I'll do my best but I just wish we’d thought this through first!” 
(Thinks to self: “In the end, I'll have fixed the problems they created and they'll get all the credit. Maybe this isn’t the best place for me.”)

The Solution: Create Push-Change Effects

The solution for Bill, and people who have created similar punishing change-pull effects in their own organizations is…more change. But, here the change must begin with them. They need to change how they think so they can create positive push-change effects for their key stakeholders which will create opportunities for growth. Here’s how they can do it:
  1. Focus on the needs of the people they wish to serve and seek to understand the gaps between those desires and the value the organization can currently deliver.
  2. Closing the gaps identified in #1 takes innovation- new and different decisions, behaviors, tools and processes. When innovation creates more efficient use of resources the capacity to serve is increased and the conditions for successfully meeting the needs of more people are set.
  3. Grow by seeking new mutually beneficial relationships and then reap the additional profits.
The solution may seem like it takes longer to get what you really want than just seeking growth for the sake of growth…because growth is good. But, it doesn’t. Just ask Bill. He’s got a lot of work to do now…relationships to mend.

Have you experienced the Change-Pull Effect before? Share your story and what you learned from the experience in the comment section below! Be a part of the conversation!

ABOUT THE AUTHOR: Tom Eakin is the author of Finding Success and the Success Engineer at BoomLife. LEARN MORE ABOUT TOM...