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Having identified all the possible opportunities for growth, the main task now is to identify the ones with the best strategic fit for your business.
By default, any opportunity that offers significant revenue growth can be appealing. However, to ensure that the opportunity aligns with both your vision and business capability, it is useful to have a series of questions to use as a filter:
Leverage – will the opportunity result in better margins, more productive use of resources, etc or simply greater scale to manage?
Valuation – will the opportunity increase the equity value through the multiple or earnings?
Dependencies – will the opportunity decrease the dependence on you or your key people?
Synergies – will the opportunity have both strategic and operational upside for your business?
Capabilities – does the opportunity build on or strengthen a core capability of your business?
Positioning – will the opportunity clarify or confuse your positioning in the market?
Funding – how will the opportunity impact on your cash flow and funding ability?
A growth strategy that sits within your business capability and is aligned with your ultimate business vision is a much more effective use of your limited time and business resources.
Growth Strategies – Key Takeaways
Strategy requires us to pause to take a helicopter view of the business through an entirely different lens (we use a tree step framework for this)
It requires us to look at where we want to get to first, before creating the plan to move forwards
Strategic growth is a way of planning fast growth with a clear vision and strategic fit.
Not all growth is equally beneficial to your business – growing fast without strategic direction can be detrimental to your business
Simply replicating competitor’s strategies can result in being late to the party or missing the real value driver
Growth opportunities that take you away from your vision or business capabilities can be a drain on resources and energy