Flexibility is Essential to Managing Growth Smartly


Forbes posed an important question regarding the commonality among Merrill Lynch, AIG, Washington Mutual, Toyota, Starbucks, Dell, BP, Arthur Andersen and Lehman Brothers.  It appears that, according to Forbes, they became obsessed with aggressively growing revenue or minimizing costs that they destroyed substantial value in their businesses. A common theme among these companies is the lack of a growth strategy.

Companies can inflict serious consequences on themselves with rampant and unstrategized growth. Shifting from being the top quality automaker to the leader in global sales left Toyota with recalled vehicles that numbered in the millions. Coffee giant Starbucks was served up slumping sales by taking the leap to open hundreds of stores, which ultimately commoditized its customers’ experience. It is well documented the consequences of BP’s move to cut costs and the resulting environmental, safety and regulatory shortcoming, often with disastrous results. Actually, the accepted adage that “growth is always good and bigger is better,” draws companies into unnecessary risks. It should be reconsidered.

Growing a company of any size comes with opportunities and challenges. The chance to become a market or industry leader is attractive, but it comes with the risk that demand will outstrip capacity. To avoid that pitfall requires a strategic plan that’s backed by adequate financing, empowered employees, and the right information and communications technology. Most entrepreneurs and many business leaders dream of meteoric growth, but fast growth can be a doubled-edged sword.

“Fast growth can kill your company if it’s not well managed,” says Patrice Bernard, Senior Vice President, Financing and Consulting, at BDC. “You have to define your growth objectives, and then decide how much growth you can support and how much financing you need to support that growth.” The first step, he advises, is a well-thought-out growth strategy that identifies the human resources, processes, tools and information systems that will be needed to meet targets. Expect the need to introduce new information and communications technology to improve sales, productivity and financial controls. In addition, it is important to anticipate expanding facilities, adding machinery or hiring new talent.

Managing growth effectively is all about making sure the business has the resources to deliver as demand increases, and the time to spot any potential problems before they bring the house down. In the beginning, most new businesses rely upon a single individual to lead and manage all aspects of the business. Decision making, even on the most intricate and mundane aspects of daily operations, is often channeled through this wearer of many hats. Growth, planned or unplanned, requires creating an organizational structure that decentralizes decision making and responsibility.

Whether it’s hiring at a rapid pace or finding office space, a key to success during a time of growth is flexibility. A successful growth strategy depends on a flexible management structure that allows a business to respond quickly to market demands. The least effective structure is one that adds layers of bureaucracy that stifles an organization’s agility. So when it is necessary to hire more people to handle more customers, doing it without creating road blocks to decision making is key. “We created a culture where we try to push decision making down to the organization closets to the problem,” says Zack Urlocker, Chief Operating Officer at Zendesk, the San Francisco-based online helpdesk company that grew from 20 employees to 85 in a year.  “That’s often a challenge for small companies where early on everybody knows everything that’s going on. We want to have engineers making great decisions and sales people making great decisions.”

Knowing when to make investments, whether expanding human talent or adding space, is critical. Adding costs and ramping up too far out in front of the curve of growth can cause serious cash flow issues and devastate an emerging company. Successful companies grow successfully by remaining dedicated and focused on their mission, consistently questioning and reevaluating early plan assumptions and being flexible in the implementation of a smart growth strategy.

Effective Trench-Based Experience in Developing New Talent

Whether it’s tracking cattle with GPS or ordering popcorn from your iPhone at a football game, Professor Chris Scherpereel wants his business students to understand the whole business process of moving a product from concept to consumer. Dr. Scherperell is an associate professor of management in the W. A. Franke College of Business at Northern Arizona University. The purpose of the schools BizBlock program, a rare practical based course not often found in traditional academic arena’s, is designed to give students the basic practical tools so they are the type of person that has the necessary tools and confidence to take a business to the next level. “The goal”, says Scherpereel “is to walk students through the communications, marketing and management steps. Just having a cool product isn’t going to be a business success. Having a cool product and having a business model that can use that cool product in a different way in order to generate profits for the business is what’s important.”

At Ipswich Maritime, the trucks bound for Connecticut are loaded and on their way by 5 a.m. while other company vehicles are still being stocked with gallons of frying clams, crates of cod and cases of scallops. George Delaney, a former Met Life employee who learned not to fear the cold call during his sales training program, is making sure orders are filled properly so that the drivers can make prompt deliveries and the customers are kept satisfied. Young George Delaney is now learning the seafood distribution business at the trenches level from his father, George Sr. who believes that service is the key to good business and people are the key to service. The folks at Ipswich Maritime wear many hats, and young Delaney’s training is multifaceted, both to provide a comprehensive understanding of the business workings and out of necessity. It’s not unusual to see the sales manager and owners packing product, loading trucks or even making deliveries.

Developing managerial talent by utilizing practical, hands on experience has been common practice in most businesses, both small and large, for generations. Many of today’s top business leaders first learned the important fundamental skills of operations management and leadership while on the front lines as warehouse workers, carpenters, delivery drivers and restaurant servers, just to name a few.  The “out-front” experience is a valuable opportunity for future management talent to gain insights to important marketing, customer service and organizational fundamentals rarely offered in traditional academic environments. Seeing the effects of an organizations manufacturing and delivery strategy from a waiter or waitress perspective can have a lasting impact on a future managers understanding and importance of the company’s process designs. There is nothing like the immediate “in-your face response” of a tired, hungry and irate restaurant customer when the company fails to deliver on the brands promise. Dealing with the pressure of success or failure that comes with delivering on the organizations promises has a lasting and hardening effect on new talent that cannot be replicated in the classroom or the front office.

In today’s business world, attracting and developing future talent is critical for continued success and much time and money is expended to identify potential candidates from graduating classes of technical colleges and liberal arts universities around the world. And while virtually all employers orient and rotate newly academically educated talent through established training pathways, few expend much time or money exposing technical or managerial new hires to the product or service delivery level of the business. Learning what it takes on a daily bases to put the numbers on the page can give future decision makers important insights to the gravity and effectiveness of their decisions. Experience from the trench level can be vital to developing an individual’s sense of responsibility, integrity, discipline, commitment and teamwork.

Vogue: A Marketing Faux Pas?


It has always been exhilarating to watch and admire beautiful people in their everyday lives. It’s no surprise that a lot of the reality show characters are trendsetters and everything they do, wear and say becomes intriguing. Their lives appear to be more interesting than ours and even that of our greater community. The truth is reality television when put into perspective may not represent any acceptable definition of real. If it were, the very marketable segment of the viewing audience that watch, “Reality TV” would not define it as entertaining. Reality based entertainment has found a significant loyal audience, one which heaps valuable rewards on its producers, marketers and actors, but the often intriguing and boisterous genre rarely finds significant appreciation outside its narrow sphere of entertainment. This past spring, that all changed.

Since its birth in December of 1892 Vogue Magazine has acted as the chief fashion advisor for society’s elite, establishing the clothing trends in the perpetually evolving world of fashion. It is now published in eighteen countries, internationally expanding the legacy and influence of the fashion phenomenon. Despite Vogue’s focus on the fleeting fashion sensations of the moment, the magazine has maintained its status as the guiding voice in elite fashion styles for nearly 120 years. Though once considered the most powerful magazine in fashion, the venerable publication failed to make the Ad Age lists of the ten most powerful magazine brands in 2013, being edged out of the top ten by such publications as Style, Vice, Men’s Fitness, EatingWell, ELLE and W.

It appears that while Vogue Editor, Anna Wintour’s influence is massive, Vogue’s franchises and integrated marketing campaigns do not contend with the more innovative projects devised by those included on Ad Age’s 2013 top ten list. Daily Mail fashion columnist Liz Jones was more forthright about Vogue’s reluctance to take on more innovative concepts. “The magazine refuses to move on, to modernize and to surprise,” she said. “Like British Vogue, the fashion is superb. Ad revenues are stable. But there are no new ideas.”  Such criticism may yield some insight into explaining why Editor Anne Wintour decided to award the coveted cover of Vogue to Kim Kardashian and Kanye West, the recognized King and Queen of entertainment.

It was a shocking decision to put the controversial rapper and his reality TV starlet on the April 2014 cover but early estimates for the sale of Kim Kardashian and Kanye West‘s Vogue cover had the issue set to outsell past issues that featured both Beyonce and First Lady Michelle Obama. Early estimates had Kimye’s cover projected at around 500,000 issues which would have toppled Beyonce’s sales of just over 355,000 and Obama’s sales of 293,798. But the premature projected upside to the decision and the early anticipation of soaring sales on the newsstand have been quickly halted and the once loyal and devoted readers are enraged and are threatening to shun the magazine in protest.

The New York Times once proclaimed Vogue as “the world’s most influential fashion magazine.” However, the majority of Vogue’s readers, as well as many people in the fashion industry, now feel that by putting Kim Kardashian on the cover, Vogue has lowered its standards and lost its stellar reputation. Thousands of Vogue subscribers have gone on record as saying that they are cancelling their subscriptions. Other loyal readers who regularly purchased newsstand copies say they won’t be buying the magazine anymore. Most feel that the integrity and high standards of the magazine have been seriously compromised by featuring Kim and Kanye on the cover.

So why are so many people upset with Vogue and its editor? The harsh criticism seems to be derived mostly over the feeling that Kardashian is merely “famous for being famous,” and hasn’t earned the coveted crowning achievement bestowed by Wintour. Kardashian, who stars on E! Reality show “Keeping up with the Kardashians,” first rose to fame when a sex tape featuring her and R&B artist Ray J leaked on the Internet. Traditionally, scoring a Vogue cover has been a feat reserved for and accomplished by Hollywood A-listers, award-winning directors or producers and top fashion industry figures.

It is not uncommon for companies whose performance has plateaued to take dramatic and even shocking turns in marketing strategy in an effort to ignite consumer’s renewed interest. Even well placed controversy and shock can motivate consumers into positive action, but Vogue’s recent decision may just be the newest example of a company committing a violation of marketing’s first rule of turning around a failing performance.