The dangers of unplanned growth

Are you prepared for a scenario where growth doesn't go according to plan? Andy Archer, regional vice president of Epicor Software, highlights the red flags to watch out for.

Profitable growth is a hallmark of a thriving business. When growth goes according to plan, it can feel like you’re sailing along the high seas in a magnificent ocean liner that can’t fail.

But how about when growth doesn’t go according to plan or when it’s fuelled by surprise surges in demand? In sharp contrast to planned growth, unplanned growth can be daunting and overwhelming—like bailing water out of a sinking ship.

While all business growth invariably presents challenges, there are clear risks related to unplanned growth—such as excessive pressures on operations and staff (which could result in negative impacts to product quality), and taking on large, complex projects without having the skillset or technology to deliver them effectively. These risks can also lead to serious dangers.

How unplanned growth can imperil a business
In a recent survey commissioned by Epicor and conducted by MORAR Consulting, senior executives identified four key dangers that they most wish to avoid when growing their businesses:

  • Loss of intimacy with customers (39 per cent). Customer intimacy is much easier for a small or midsize business to cultivate as one of its competitive advantages. Customers can be managed closely through a network of strong one-to-one relationships. But as the business grows, there comes a point when the same direct personal contact can’t be maintained since businesses must introduce other people and processes to manage relationships. Although it’s often the case that true scale can only be achieved by automating processes, it’s challenging to achieve without losing the personal touch.
  • Lack of management control (36 per cent). Senior management cannot possibly maintain personal, direct involvement in a large business. Effective control can only be maintained by efficient delegation, access to good quality management information, and the automation of key processes to free up executives’ time for more strategic or value-added tasks.
  • Lack of visibility of business operations (31 per cent). No one person can personally have direct visibility of all that is going on in a large business. This can only be achieved by collecting, distilling, editing, and presenting meaningful management-related information in a timely manner—and highlighting key issues in a way that is clear and actionable.
  • Lose focus over product direction (31 per cent). In periods of unplanned growth, there is a clear danger that management’s time will become increasingly consumed by mounting day-to-day workloads. In the worst case scenario, this can degenerate into an endless series of reactive firefighting tasks. If that happens, little time is left to think about strategy and the longer term direction of the product offering. If this focus is lost, the company becomes vulnerable to up-and-coming competitors as they introduce products with new features, and present a clearer, more compelling story to potential customers.

The good news is that averting the aforementioned dangers is far more likely when you’re equipped with the right ERP system that can provide clear, real-time visibility of operations for more agile decision-making, increased efficiencies leading to greater responsiveness, and much more.

Andy Archer is the regional vice president, UK & Ireland of Epicor Software

See also: Organic growth vs acquisition – which is the best strategy?

Praseeda Nair

Praseeda Nair

Praseeda was Editor for from 2016 to 2018.