When Companies Stop Growing, What Do They Do?

Derek — Mon, 08 Dec 2008 14:52:28 +0000

Have you reached a growth plateau? A place where everything you do no longer yields results? A place where your hard work goes unrewarded and unrecognized?

From fitness enthusiasts trying to break their bench-press record to bloggers looking to grow their website traffic, a plateau means they achieved some level of success, but can’t seem to take it to the next level.

You may feel like you reached your limit, but you refuse to accept stagnant growth.

A plateau is a temporary challenge — one more way for you to prove that you will remain incredible. So, here is how you can conquer your plateau and ensure long-term success.

Plateaus and Long-term Success

While growing your business, you will encounter several growth plateaus. They indicate that times are changing and its time for your business to follow. You could ignore them, but you need to overcome them for long-term success.

Just think how many businesses encounter a plateau and remain there for years. They ignore them because they convince themselves “what worked in the past will work in the future.” In reality, these companies are sitting in an open field while their competitors take effortless shots at their company.

So, ask yourself, has your business reached a plateau? If so, are you ready to try something new to break free?

The Plateau Energizes Growth

Some companies know that they need to conquer a plateau to achieve long-term success. So, they make growth their number one initiative and do everything in their power to sustain it. Now let me share a quick story of a company who executed this perfectly.

Two entrepreneurs, Stewart and Lynda Rae Resnick, bought farmland in 1987 that came with a 100-acre Pomegranate grove. Despite experts suggesting they chop down the Pomegranate trees and replace them with pistachios, they decided to “just see what happens.” They saw the plateau of opportunity.

POM Wonderful is what happened. They confronted the stagnant Pomegranate market with marketing prowess and innovation. They funded research that showed the health benefits of pomegranate juice, created original double bubble Pomegranate juice bottles, and found celebrity enthusiasts. Their plateau started to look much more like exponential growth.

In short, Stewart and Lynda Rae Resnick broke through the Pomegranate plateau by selling Pomegranate juice. It was a huge success (Newsweek reported that their sales rose from $12 million in 2003 to $91 million in 2006). They now enjoy significant market dominance and a bright international future.

We know that POM Wonderful is a great success story, but what are you doing to revolutionize your business? What are you doing to differentiate?

The Plateau Assassinates Business

Do you believe the old way is the only way? Do you ignore the tell-tale signs of the fast-approaching cliff because you are blinded by arrogance and your past success? Well, I’m here to tell you that as you approach this cliff, your protective ego and pride will fade as Chapter 11 hits you upside the head.

Let me tell you a quick story about a company who has remained on the growth plateau.

Microsoft has been on a growth plateau since the release of Windows XP. They face rigorous competition from Apple and continue to lose computer market share. Their repeated copy-cat attempts have failed them and Apple continues to gain more computer market share.

Overall, Microsoft coasted by on their market dominance and now it is being challenged. I’m not saying Microsoft will fall because they won’t. They are just heading down the wrong path and they need to fix it.

Do you currently enjoy a decent sized market share in your niche? What are you doing different than your competitors to maintain this? Are you still innovating your way out of your growth plateaus?

The Skill of Conquering Plateaus

Conquering a plateau is a skill. It can be learned, taught, and repeated. The more plateaus you conquer, the faster and more efficient you can conquer additional plateaus.

Your ability to conquer plateaus improves with experience because you learn how to think the right way. For example, have you noticed that with every new Olympics, the old world records fail to hold up? It’s not a coincidence. These old records were plateaus and athletes found ways to overcome them.

Or, from a blogging standpoint,many top bloggers keep getting bigger. While their brand equity plays a huge role in their continued success, they also continue to launch new features and new programs that help them maintain this success. They speak at conferences, launch new blogs, and leverage their connections to grow their reach.

So, if you find yourself on a plateau for an extend period of time, you need to list specific action plans that will help you break through it. For example, if you’re a blogger, do you plan on writing more? Guest posting? Or if you’re a businessman, do you plan on making additional sales calls? Building a website?

Why Do Companies Remain on The Plateau?

If conquering plateaus is a skill, you may be wondering why successful companies seemingly ignore the overwhelming evidence of failure and success. Well, join the club because it is perplexing. However, I do have four theories why companies fail to break out of their plateau.

Some large companies view the plateau as temporary. They blame the external environment for their lack-luster growth and use prior performance as reassurance for future growth. Or, to put this more simply, these companies don’t take accountability for their situation and assume its out of their control. (Take a look at almost every large company)

Other companies embrace new technology and new ways to do business, but they still reach a growth plateau. They most likely understand the problem and know they need to fix it, but they don’t know how to kick-start their break-away growth. (The Myspace giant is falling fast. They have the technology, but they are doing nothing).

Some companies believe they have no reason to change because of their past success. They reject new ideas and innovation because they assume they know best and continue doing their business model their way. (who feels bad for the recording industry? Not me!)

Finally, there are some companies with multiple product lines and multiple businesses on a plateau. Since each product and business is unique, they can’t use the same plan to spark exponential growth. Additionally, they can’t focus on all of their product lines because resources are limited. So, these companies sit there frozen and do nothing. (Hello, Yahoo).

Whatever the reasons, many companies rationalize their situation and shirk the responsibility. They fail to confront the plateau with full-force and they remain stranded in an open field while their competitors take shots at their company.

Are you guilty? Now is the time to figure out why and fix it.

How Do You Overcome The Growth Plateau?

Now there are the select few companies who “get it.” They are led by success-driven people, like me and you, and they’re looking to revolutionize their industry every single year. They may hate the sound of “plateau,” but they welcome it. They know that within every plateau lies hidden opportunity and they look for it.

But how do you overcome a plateau? How can you start improving your business so you can experience break-away growth?

There is no sure-fire formula, but here are some things to consider:

Seek Outside Consultation

Raise your hand if you are familiar with the “Curse of Knowledge.”

For those of you who kept their hand down, Chip and Dan Heath talk about the “Curse of Knowledge” in “Made to Stick.” Extensive research shows that when people know something, it is impossible for them to imagine not knowing it. In short, this phenomenon makes communication difficult.

Unfortunately, this adversely affects companies seeking growth as well.

Many companies are accustomed to the way they do business, which makes it hard for them to imagine doing it any other way.

Luckily, outside consultants solve this problem. They may not be experts at running your company your way, but they do provide valuable opinions on how you can take your company to the next level.

Implement a Process

Variable work schedules are hard to maintain and improve. Without process, it could take years to find out what you’re doing wrong. With a process, it can take less than an hour.

When I started blogging on the internet, I would spend hours on the computer and always feel like I got nothing done. To solve this, I did a 7 day study where I logged everything in an excel worksheet. It was tedious writing “7:30 a.m: washed my face and 8:15am: tied my shoe,” but it provided me some data and I was able to find out where I wasted most of my time.

In business, you want to capture all the things you need to do on a “To-Do” list and create a process for each one of them. It’s going to be tedious and boring, but are you going to turn down the chance to improve your business?

Find an Expert

Use this tip sparingly and with caution.

Experts know a great deal about their respective field, but I would never ask them for specific action plans to improve your company. Instead, you should use them as a resource to find out what other companies are doing right and then decide for yourself if it applies to your business.

Take Some Risks

Companies end up on the never-ending plateau because they stop taking risks. They do what’s safe, or what they call a “sure-thing.” Unfortunately, the only thing about a “sure-thing” is that you can guarantee yourself mediocre or below average results.

I’m not telling you to take risks to the extreme, but instead, you need to implement a process that manages some risk. You need to be doing something risky if you want to break out of your plateau.

Find Growth Opportunities

You know the importance of planning, but you don’t know how to find growth opportunities. Well, one of the easiest ways to do this is by creating Competitor Swipe Files.

Find 10 of your biggest competitors and create a one page summary about their business and their features. I don’t suggest you copy their features, but I do expect you to use them as a starting point for innovation.

Scale Business Down

Do you currently operate in too many businesses? If so, this may be your chance to scale it down and become specialized. This is your chance to focus on the 20% of your business that produces 80% of your sales. This is your chance to focus on your strengths.

When Steve Jobs took the CEO reigns at Apple again he came into a complete mess. Apple operated in too many businesses and they weren’t the market leaders in any of them. So, Steve Jobs started cutting products until they were left with the bare minimum. Then, he made Apple known for media and the iPod was a huge success.

Just remember, sometimes you need to minimize to maximize.

The Growth Plateau

I developed a love-hate relationship with the growth plateau. On the one hand, I’m frustrated that I stalled on my journey towards achieving my goals, but on the other hand, I’m glad to receive early warning signs of potential failure.

When you hit the growth plateau, you know exactly what you need to do and that is change. You need to change or innovate your way out of it or you might end up with a company with dwindling profit and sales.

So if you take away anything from this huge article I want you to realize that you need to treat every growth plateau as an opportunity. You need to treat every growth plateau as one more chance to differentiate yourself from the competition. Or, just one more way to completely overthrow your competition.

If only everything else could be so clear…

What Do You Think?

I want to know what you think. I also want you to tell me what you did to overcome any of your growth plateaus. Send me an e-mail or leave a comment.

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