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Why Business Growth Stalls

Friday, December 6th, 2019

Labour is promising investment in leadership and management training for business owners if elected. They are responding perhaps to calls from business associations to help the accidental manager and eradicate the long tail of low-productivity small businesses. They will be following a long tradition of government investment in management training; presumably they will follow the equally-well established tradition of rationing the help to individuals to the point where it is ineffective, withdrawing the scheme when the fiscal going gets tough and failing to follow-up, assess or learn from the scheme in any meaningful way.

I was prompted in these thoughts by a discussion at an IoD event I attended today which got around to why most business owners grow their business to a certain size and then get stuck whilst a few are able to create scalable businesses that go on to employ many people. Opinions as to the reasons for this differed wildly, as you would expect from IoD members. Here are my notes from my coffee-stained attendee list:

  1. Some business owners do not have growth as an objective. They have no external shareholders to satisfy and are focused on their lifestyle.
  2. Some business owners would like to grow but do not see the return justifying the effort required.
  3. Some business owners have the ambition and drive but do not have the required capabilities, which might include emotional intelligence, self-awareness, credibility in the eyes of their staff, intelligence (or at least the ability to generalise from the specific), creativity, vision, communication, commercial nous, courage – and just being organised.
  4. Some business owners have the capabilities but don’t have the tools, such as understanding strategy, planning, marketing, finance, structure, process, motivation and so on.

As a management consultant working with business owners it is depressing to recognise that I can only help those few business owners who reach level 4 on this scale – let’s call it the Goal-Drive-Capability-Knowledge Scale (TM). It is also chastening to realise how often I waste my time wrestling with clients who are, and will remain, at level 3.

Let’s hope the next government, if Labour, don’t waste our taxes doing the same on a grand scale.

If you are one of these Level 4 business owners then you might be interested in this event on scaling up your business.

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