Your Growth Strategy Stopped Working. Now What?
/You’ve been nailing it for months. Or years. Or decades.
Suddenly, your revenues are stagnant. You’re not meeting your goals. You’ve plateaued.
It happens to every business. The question is what to do when you get there.
I’m sharing the four most common reasons both startup and mature companies get stuck with a growth strategy that’s not working—and how to get unstuck.
You maxed out your market
Your total addressable market simply isn’t big enough for continued growth.
What might have happened:
Your original market was too small.
There’s too much competition already in the market.
You misjudged your product market fit, so your market is smaller than you thought.
You’ve reached a point of diminishing returns, acquiring the low-hanging fruit, and the rest of the market is too expensive for your unit economics.
How to get unstuck: Regardless of the reason, you only have one real choice: expand into new markets.
You’ll move into a new space on the foundation that you’ve already built, so you must consider your existing brand, your existing product, and your existing team. Leverage what you’ve created and accomplished up to this point. While you may differentiate your past products from something new, this isn’t a pivot—it’s an expansion.
Say, for example, you’ve been building high-end, craftsman tables and need to expand into a new market. You could look into building prefab tables to sell to a more cost-conscious market. Your analysis will probably show that with your current brand, product, and team, you can’t cost-effectively make prefab tables. It’s not what you built your company to do. Instead, you can sell your tables in a new geographic location, or add other high-end furniture to your offerings.
You’re not built to scale
You built an organization that was perfect for the stage you were in. Now you’re not able to execute on a strategy for continued growth.
What happened:
You can’t find the talent you need to grow your organization.
Your management or operating processes became ineffective with increased complexity.
You can’t get economies of scale, and every step toward growth requires increasing costly resources.
You don’t have the capital necessary to invest in people or infrastructure.
How to get unstuck: You’ll need to change something: the structure of your team, your processes, or your capital structure. Perhaps elements of all three.
For example, if you don’t have the capital to hire much-needed team members, and can’t fund it through profits, it may be time to raise money or bring in debt. Most businesses will not have investors (you know who you are). Debt is a powerful tool that doesn’t affect your capital structure, though it does change the economics of your business. You have to trust that revenues will grow to enable you to service the debt.
While scaling will require some investments, there are ways to make change organically, without an influx of cash.
You might simply need to work smarter and do more planning. In a young business, we often get into the cycle of grinding—selling, doing, selling, doing, etc. It’s an easy place to get stuck. Take a step back and think about where you want to be in the mid to long term, three to five years.
Scaling becomes easier when you move out of the hustling mindset and into a more purposeful mental space. Define your goals (say, $1.5M revenue per year) and break them down into an actionable plan so you’ll know this is what I have to do today if that’s where I want to be next year.
See: Isolation Will Kill Your Business Faster than a Pandemic or an Economic Collapse
External factors have changed
Something has changed and, through no fault of your own, it’s stopping your growth strategy from working.
What happened:
Economic conditions, perhaps a recession, changed customer behaviors.
Competition developed, changing product or pricing expectations.
Markets and trends changed, and customers are less interested.
Advancements in technology made your product or service less relevant.
How to get unstuck: When the rug has been pulled out from under you, you may have to do more than roll out a new product. You may have to build an entirely new business model.
When Dow Corning’s sales became stagnant, they realized that many of their customers were no longer interested in the high-end technical services they had been providing for years. Because of advances in their own processes, a large segment of customers no longer needed the VIP service and just wanted lower-priced products.
Dow Corning couldn’t just respond to this change by dropping their price points. They needed to design what was “essentially a commodity business for low-end customers,” according to a 2008 Harvard Business Review article discussing changing business models.
Dow Corning’s CEO set up an “experiential war game” to determine whether a new arm of the business with different standards could survive within the company’s existing culture. After running the experiment, the CEO decided that the commoditized services would need to be built and sold by a company separate from Dow Corning. That company became Xiameter.
What’s to be learned? Getting unstuck requires understanding and accepting the factors that got you where you are, identifying a new market under new conditions, and figuring out what it would take for your business to serve that market. Even though Xiameter was an entirely new company, it was built on a foundation of experience and customer focus.
Your leadership isn’t effective
Your team isn’t meeting the goals you’ve set for them, and your leadership might be part of the problem.
What happened:
You knew how to collaborate with two or three people, but managing a larger team isn’t in your comfort zone.
New employees joined the team and the organization evolved, requiring a different type of leadership.
Your vision or goals have changed, and you haven’t gotten buy-in from your team.
How to get unstuck: For most people, effective leadership doesn’t come naturally. It requires training and hard work, and it’s not a skill you can learn once and forget about. As with any element of your business, what got you where you are now may not get you where you want to go. Leading a team of 20 is very different from leading a team of 200.
You might need to let go of a skill that has served you well but is no longer working. These changes are often uncomfortable and can create anxiety. Leaders that are willing to lean into this discomfort and adapt to the changing needs of their organizations are the leaders that build high-growth companies.
Alternatively, the leader knows when to step aside and make room for others to lead.
If you’re not sure where the disconnect is, an outside-in assessment of your organization and your leadership can help identify areas for improvement or development. By working with a coach or facilitator, you can begin to see troublesome patterns and build leadership skills that will help you and your team reach the next level of growth.
See: Are You Displaying These Poor Leadership Qualities? Here’s How to Change
Final thoughts
Any successful business that’s been around for more than a few years has found themselves on that plateau, trying to figure out why their growth stalled or why they feel stuck. The plateau itself isn’t a problem. In fact, it may create an opportunity to look at your business, your product, or your market through new eyes.
The problem comes if you don’t find a way to move off the plateau and get that curve pointing up again. Almost every business leader in this situation needs help—from a coach, a mentor, advisors. Connecting with someone who has been in your shoes is the best way to get useful support during a big transition. Our coaches have been there. Contact us and get unstuck.
