The Hidden Danger of Rapid Growth

What's your primary goal in 2023? If you are like most small business owners, you want your company to grow and make more profit. Now, what if you are constantly growing year after year? Great! It means you have a fantastic product that is in demand.

But while growth is generally good, too much growth, too rapidly is a dangerous sign for small business owners. 

Why? Because most small business owners do not know how to properly manage explosive growth. Everything starts to careen out of control. Clients leave, employees are unhappy, deadlines are missed, etc. This problem is termed the "hidden dangers" of very rapid growth. In other words, the pace at which your company grows plays an essential part in your company's survival.

A study by Professor Cyrus Ramezani examined more than 2,000 companies, examining how they grew. Ramezani discovered that companies with the fastest revenue growth (average annual sales growth of 167%) performed worse in revenue and profit than their slower-growing counterparts, whose growth averaged 26%.

But what are the actual odds that your company will crash and burn? The Kauffman Foundation and Inc. Magazine conducted a recent study of 5,000 businesses that grew rapidly. The findings revealed that 2 out of 3 companies on the list had gotten smaller or were out of business entirely.

When a small business has not successfully developed the infrastructure or management systems it needs to scale successfully, it begins to exhibit some significant problems that will have dire consequences. These problems indicate that something has gone very wrong in the organizational development process and are an "early warning sign" of significant future problems. The bottom line is that the company has not implemented the correct foundational structure to sustain rapid growth.

10 Signs of Rapid Growth in a Small Business

1. Not enough hours in the day.
2. Spending too much time "putting out fires."
3. Not aware of what others are doing.
4. Owner not delegating.
5. No scheduled meetings
6. Increased customer complaints
7. Increased HR problems
8. Cash flow difficulties
9. High levels of employee stress
10. Low morale
11. Growth in sales, but not in profits.

Rapid growth will significantly impact your ability to execute as a business owner. As you try to lead and manage, your product or services will begin to falter as your work processes come under pressure from increasing demand.

Growing too quickly could make you lose focus on essential functions and take on too many tasks, delivering below-par outcomes that lead to frustration within your company and disappointment for your clients. The problem escalates when internal business systems and procedures are not in place or mishandled due to everyone being overworked. Inadequate control over budgeting, inventory management, marketing, and sales programs could derail your success as a business.

Outsourcing some functions is a viable method to delegate some non-critical administrative functions. Depending on your needs, this arrangement can be transitional or permanent, but it's essential to scale your processes to align with your growing business. 

No one is an expert in everything, so this may be the phase where you bring in an outside business coach to help you gain control of your company and teach you how to pace your growth. 

According to data from the Bureau of Labor Statistics, about 50% of new businesses survive the first 5years. And by the end of the decade, only 30% will remain — that’s a 70% failure rate within the first 10 years.

If your company is taking on too much work and you are finding that more and more of these problems are present, SLOW DOWN and gain back control. Your company's future is riding on it.

The Importance of Interpreting Body Language During An Interview

Have you ever opened an email from a colleague and misinterpreted the words on the screen?

Perhaps you felt the message was critical of you or your work when that wasn't what the writer intended. Or maybe you've had the experience of speaking with a client over the phone and knowing, just from their tone of voice, that you're not going to get the sale.

Communication is more than just the words we use. Our tone of voice, facial expression, and body language all significantly affect how we're understood. We must be cautious if we're communicating in a situation where we can't use all of these elements to enhance our messages. Nonverbal communication is an essential aspect of our day-to-day life. Many influential leaders have recognized this, while others may have never thought much about it.

One of the first advocates for the power of nonverbal communication was the renowned behavioral psychologist Dr. Albert Mehrabian. Mehrabian's extensive research on the topic of body language resulted in the 7-38-55 rule. The 7-38-55 rule indicates that only 7% of all communication is done through verbal communication. In contrast, the nonverbal component of our daily communication, such as the tonality of our voice and body language, make up 38% and 55%, respectively. 

Dr. Albert Mehrabian Communication Model: 7% Spoken Word, 38% Tone, Voice, 55% Body Language

Therefore, when interviewing a candidate, it would be best to start paying close attention to their body language; nonverbal communication will tell much more about a candidate than what they say. By reading their body language, you can tell how interested they are in the job and how they will conduct themselves once hired. Body language includes facial expressions, eye contact, hand gestures, posture, and more.

Humans produce over 700,000 body signs daily, and the face is responsible for over 250,000 signs. Therefore, learning to read body signs before interviewing a candidate for the job is essential.

During the interview, pay attention to:

1. Eye contact: Eye contact generally shows confidence, comfort, and willingness to engage the interviewer. While some people may try to make eye contact on purpose during an interview, regular eye contact is a natural way for many people to connect with others.

2. Facial expressions: People's facial expressions offer a great way to interpret how they feel about a question or situation. Genuine, natural smiles are one of the best ways candidates show interest in a job.

3. Gestures: Many people use gestures with their hands to engage with others and emphasize their most crucial point. Some gesturing can show that someone is a confident speaker, while excessive hand motions may be perceived as erratic or unprofessional.

4. Posture: A candidate's stance can show their focus and interest in a position. Candidates interested in a job will likely put in the effort to sit up straight with an open posture that faces the interviewer.

5. Pauses: A candidate's pauses when answering a question can also be an essential part of their body language. People who take their time to consider how to answer show thoughtfulness and detailed consideration of each question.

6. Fidgeting: Because job interviews can be stressful, many candidates will fidget at least a little. However, intense nervous fidgeting or distracting movements, such as playing with their hair or picking at their fingers, may show a lack of confidence or social unawareness.

7. Body posture: Slouching is a red flag. It shows a lack of self-confidence and respect for interviewers. You'll want candidates who care enough to sit up straight during their interview.

Sitting on a chair's edge and leaning forward is usually positive body language. It shows that candidates are eager and interested in what's being said. But, if a candidate intrudes in your personal space by coming too close, it's not a good sign. Leaning back is usually negative. If you see a candidate leaning back suddenly, they may be getting defensive. Shoulder movements also help people communicate their emotions. If a candidate describes an experience with flamboyant words but remains stiff as a board or moves only one shoulder, they may be uncertain or lying.

8. Arm gestures: People often use hand and arm gestures for emphasis. It helps us express ourselves. Of course, there's a thin line between being expressive and being dramatic. So, unless you're hiring an actor, be wary of candidates who overdo this type of body language during an interview. Candidates who use chopping movements or lots of finger-pointing can be seen as authoritative, making you doubt whether they could work well with a team.

When candidates touch their face or play with their hair, they can appear deceptive or uncomfortable. When people rub their necks, they often try to comfort themselves or relieve frustration. It might be a symptom of lying, too.

Crossing arms can mean many things. But, usually, candidates who cross their arms in front of their chest during an interview probably feel insecure and defensive. Most people worldwide dislike seeing others crossing their arms because it's distancing. But it's a natural reaction when meeting a stranger, and it's a good sign when candidates unfold their arms later during their interview.

Guidelines for reading body language

Observe extreme behavior. A candidate's harmless tic doesn't mean they won't fit in well at your company. But be cautious about extreme behaviors, like constantly checking their phone.

Spot the difference. You can read people's body language by spotting changes in their movements or posture. Imagine, for example, that a candidate suddenly starts tapping their foot. Maybe they feel the interview is taking too long or they're facing an uncomfortable question.

Connect the dots. You can't always tell what a specific gesture means on its own. For example, people may cross their arms when they're cold. But, when you see a candidate crossing their arms, crossing their legs and balling their fists simultaneously, brace yourself for an aggressive answer.

As you have learned, communication starts with our body language and gestures, and the spoken word plays a tiny part in reading someone. To get more proficient in reading candidates' body language and tonality, go to YouTube and watch some videos. They're very insightful and will give you practical information on what to look for.

The Importance of Understanding Marketing Myopia

What do Xerox, Blockbuster and Kodak all have in common? They focused too much on selling their product or services and didn't spend enough time understanding their customer's needs.

The bottom line is they went out of business.

Further, they failed to ask themselves this key question, "What business are we really in?"

In 1960 Harvard Business professor Theodore Levitt wrote an article identifying this phenomenon. He then coined the phrase Marketing Myopia. He stated that you have to focus on what your customers want so that you do not become nearsighted and lose touch with their needs. More importantly, you can't put the company first. As Levitt used to tell his students, "People don't want a quarter-inch drill. They want a quarter-inch hole!"

Still relevant today

Marketing myopia remains an important reminder of your company's risks if you don't pay close attention to your consumers' needs. Levitt says that if a company is "nearsighted" and only focuses on selling products and services, it will run into trouble. Instead, you must focus on the "big picture" of what your consumers want. 

A company needs to ask itself this question, "How can my product (or service) fulfill my customer's need, not just sell to them?

Levitt describes myopia as a lack of insight into what a business does for its customers. Organizations invest so much time, energy, and money in what they currently do that they're often blind to the future. They get lulled into thinking they're in a "growth industry," which, according to Levitt, doesn't exist. Instead, there are only companies continuously capitalizing on growth opportunities.

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4 Causes of Marketing Myopia

As a business owner, you need to be aware of what causes marketing myopia, it can help prevent poor decision-making. Some common roots of marketing myopia include:

1. A business only anticipates growth. Some companies may believe they are in a growth industry or that their product lines have no competitive substitutes in the market. This leads to a false sense of security, and if the product becomes less desirable over time, the business will profit as the products decrease in demand. Failing to think of the long term, a company must craft a new business strategy to recoup revenue.

1. A company lacks clear goals. A successful company should have clear short-term and long-term goals for success and growth. When a small business or company neglects to think about long-term growth strategies and business goals, they focus only on decisions that benefit them in the short term.

1. Leaders want fast results or quick wins. Companies and start-ups may prioritize short-term goals to increase their numbers to validate their business, secure funding, and drive immediate revenue.

1. Owners will skew the data. Employees feel pressure from leaders or higher-ups to produce data showing their successful marketing concepts. Teams that feel pressure to perform well may make decisions that show positive results from their marketing efforts in the short term, neglecting to consider the longer-term impact.

6 Ways Avoid Marketing Myopia

The simplest way to avoid marketing myopia is by focusing on what your customer really wants. As Theodore Levitt himself said, "people don't want to buy a quarter-inch drill; they want a quarter-inch hole." 

Here is what you can do to avoid marketing myopia:

1. Have a clear vision. How can this product or service make a difference now and in the future?

2. Put the customer before the product. Develop a customer-centric culture in your company and make sure your product or service is solving their problems.

3. Do the marketing first. Throughout history, people have found a way to make a product or service, then figure out how to sell it later. Snake oil salesmen are a great example. The most successful companies determine what people want first, then produce that product or service.

4. Don't stop the marketing. It's essential to continue market research even after a product launch. Find out what people like, dislike, and want to see in the next iteration.

5. Watch the competition. Competing brands represent some of the most relevant industry expertise, making them both a threat and a resource. Learn from their failure and success, all while working to stay a step ahead.

6. Diversify your products or services. Don't just meet one need– find different ways to offer additional products or services.

Marketing Myopia Examples

1. BlockBuster

In the early 2000s, Blockbuster was the undisputed king of the video rental industry. But by 2009, the company had filed for bankruptcy. What went wrong?

Experts believe that Blockbuster's downfall was due to marketing myopia. The company was so focused on the existing business model that it failed to adapt to the changing marketplace.

As streaming services like Netflix and Hulu became more popular, Blockbuster refused to embrace them. Instead, they clung to their brick-and-mortar stores and DVD rentals, which eventually became obsolete.

2. Kodak

Kodak is another example of a company that fell victim to marketing myopia. For years, Kodak was the leading name in photography. But as digital cameras became more popular, Kodak failed to adapt.

The company focused on film and prints, even as its customer base shifted to digital. As a result, they lost market share and eventually filed for bankruptcy in 2012.

3 Easy Steps to Write Your Company's Mission Statement

What is a Mission Statement?

The definition of a mission statement is a concise description of your company's core purpose, answering the question, "Why do we exist" and is always written in the present tense.

You can think of a mission statement as a combination of:

1. What does your business do?

2. How does your company do it?

3. Why does your company do it?

Here is an easy step-by-step process to follow to create your company's mission statement.

A great mission statement is comprised of the following elements:

• Open with: “Our mission…” you can drop it later and replace it with, “Acme Hardware’s mission…”

• Verb: Use an action verb in the present tense.

• For Whom: Describe who you do it for.

• Result: What is the result or benefit from your work?

• What You Do: Briefly state what you do and how.

STEP I- Describe What Your Company Does

What product or service does your business produce or provide? Get down to the bare basics, and don't add any filler. 

Ex. My company's mission is to:

• Sell shoes
• Provide educational services
• Grow market vegetables

Just write down the bare bones. 

STEP II- Add in a few Core Values 

Here's what the first three examples from step one might look like when you add values to them. 

Ex. My company's mission is to:

Sell shoes of the highest quality.

Provide educational services that allow all children to experience learning success.

Grow market vegetables using organic, sustainable farming practices.

Remember, these are not finished yet. There's one step to go before your mission statement is complete.

STEP III- Add Why Your Company Does What It Does

This part of your mission statement describes your spark—the passion behind your business. Why does your company do what it does? For some people, it helps to think back on why they started their business in the first place.

This is what our three mission statement examples might look like when you add "why" to them: 

Ex. My company's mission is to:

• Sell shoes of the highest quality so every customer can find a pair of shoes they love to wear.
• Provide educational services that allow all children to experience learning success and become life-long learners and contributing members of our community.
• Grow market vegetables using organic, sustainable farming practices to give people safe and healthy food choices.

When you're finished, look at your mission statement and make sure to change the phrase "my company's mission" to your name.

"My company's mission is to grow market vegetables using organic, sustainable farming practices to give people safe and healthy food choices,"

The finished product:

"At Earth's Bounty, we grow market vegetables in a way that's good for the earth and good for the table. 

Checklist for a Great Mission Statement

Your Mission Must Be Foundational. It clearly states why your organization exists.

✔️It’s Original. It’s unique to your organization. If you were to read the mission statements of all the organizations in your industry, yours would be different than your competition.

✔️It’s Memorable. Memorable = motivating to employees, prospective employees and customers.

✔️It Fits on a T-Shirt. Peter Drucker famously advised that your mission statement should be short and compelling enough to fit on a t-shirt your staff would actually wear.

Next Step

Once you've crafted your business's new mission statement, you'll want to put it to work right away.

You want your mission statement to be front and center in the minds of everyone who works in or interacts with your business. A strong mission statement isn't just a slogan; it's the foundation of your company.

Examples of Famous Mission Statements

• Virgin Airways: "Our mission statement is simple, yet the foundation of everything we do here at Virgin Atlantic Airways... to embrace the human spirit and let it fly."
• Tesla: "Tesla's mission is to accelerate the world's transition to sustainable energy."
• Facebook: "Founded in 2004, Facebook's mission is to give people the power to build community and bring the world closer together. People use Facebook to stay connected with friends and family, to discover what's going on in the world, and to share and express what matters to them."
• Starbucks: "To inspire and nurture the human spirit—one person, one cup, and one neighborhood at a time."
• Nike: "Bring inspiration and innovation to every athlete in the world. (If you have a body, you are an athlete.)"

 If you want to schedule a Free Business Health CheckUp, just click this button to get access to my calendar: https://calendly.com/bizcoachellie/ellie-marshall

What is a Business Health Checkup? It is a free diagnostic analysis of your entire company. Just as you get health checkups, your business needs health checks from an outside expert for you to review where your company is at, what your goals are and how you can reach them faster without wasting time and money. I also will provide you with free business strategies that will address your company's most pressing issues. You have nothing to lose!

• What does your business do?
• How does your company do it?
• Why does your company do it?