Usually, a company acts either as a growth company or a strength company. What do I mean?
A company operating in growth mode is pursuing new opportunities. The company might be adding new processes to increase revenue, attempting to find new customers, purchasing other shops, hiring new employees or creating new alliances and partnerships. A growth company is taking some or all of these actions to increase its share of the pie.
A strength company focuses on core competencies, getting back to basics, doing what it does best. This type of company may take some of the same actions as a growth company, but the underlying reason for these actions is to better serve its existing customer base.
Throughout most companies’ histories they’ve gone back and forth between these operating modes several times. Some companies may even be in both modes at the same times for different products or divisions.
While there are appropriate times for both modes, when we become stuck in one mode without recognizing the other, problems will arise.
The Internet mania of the late 1990s is a perfect example. Everyone was focused on the growth and potential of the Internet. How can I use it? What can it do for my company? How much money can we make?!?
During that craze, many companies lost sight of their strengths and focused too heavily on growth opportunities. When the bubble of that particular growth opportunity burst, the companies that continued to focus on their strengths while keeping a watchful eye on growth were in a much better position.
The important thing to recognize is that a company can’t succeed stuck in either mode. Management must be able to get employees to shift between strength and growth modes when the economic conditions require it.
Ideally, a company would be balanced between the two—focusing on its strengths and tackling the manageable growth opportunities.