Keep Businesses Alive With Careful Growth Strategies
Thursday, Mar 22, 2012 10:00 AM EST
By Sonya Carberry, Investors.com
Grow or die? Executives sweat over that business mantra. How they cultivate corporate longevity:
Nurture. What to do when your firm's roots are in a declining technology? Get busy branching out.
That's CEO Mark Lucas' plan for Imation (IMN). The tech firm, which excelled in magnetic tape and CD disk markets, is now propagating newer data storage and data security technologies. "I have committed to the outside world that we will return to growth by the end of 2012," he told IBD.
Look it over. Before landing at Imation, Lucas boosted timepiece Geneva Watch Group and audio equipment maker Altec Lansing.
His first step to revitalizing a business? Taking a hard look at its strategy, execution and leadership. If a firm is struggling, "it's usually symptomatic of one of these three things," Lucas said. He asks for employee input. "Most often, they can tell you what's not working," Lucas said.
Before implementing a new corporate strategy, Lucas checks its strength by talking with top customers and leading analysts. "I'll ask: 'What if we did this? What do you think?'" he said.
Green their thumbs.
Decide, align, go. That's Lucas' approach to overcoming organizational inertia. He tells workers to advance with promising ideas — before they're 100% proven. "It's a whole new willingness to accept risk," he said.
When an industry's undergoing a sea change, a firm footing is essential. So says Neal Schore, CEO of Triton Digital. In 2006, he partnered with former competitor Mike Agovino to serve emerging needs as radio moved onto the Web via podcasts. Some thought the Internet might kill the radio star, but Schore and Agovino remained bullish on the medium. "The marketplace is now supporting what we always knew," Schore said. "(It's) really starting to understand the power of audio."
The duo anticipated that traditional and Web-based audio publishers would need expertise in digital content delivery, ratings and demographics measurement, and audience engagement. So they made Triton Digital's platform full service. "That's allowed us to be in a position to lead," Schore said. And attract such big-name clients as Clear Channel Communications and Pandora Media (P). Some of Triton's 5,000 clients use the entire platform; others pick out specific services. "Each publisher has different needs," Schore said.
"We have a team of people whose job it is to develop next-phase products," Schore said. One app lets listeners enter radio contests by tapping a smartphone interface, instead of dialing in. Not every new cool idea makes it onto Triton's roster. "We continue to focus in on innovation, but also look at monetization," Schore said.
Can a startup blossom too fast? If expenses outstrip revenue, yes. How to know you're headed for a collapse? "A sure sign is you're running out of cash," said Kevin Cope, author of "Seeing the Big Picture." He tells entrepreneurs to keep a close eye on cash flow.
Beware bumper crops.
Another indication of too-wild growth? Service starts to slip. That means workers are cutting corners just to keep up, which also leads to employee burnout. Top firms tend to employees and clients as demand grows. "I really admire companies who get the people and profit combination done well," Cope said.