Businesses today are operating and evolving as they have always done. How they grow is more painful than ever before. Henry Ford fought to change the way the transportation industry operated. Instead of riding horses, he saw a future in cars, which brought about the Model T and mass production. Today Tesla, similar to Model T at the time, is disrupting the auto industry. However, the way in which Elon Musk and Henry Ford approached change are different. Change has now more to do with growth than ever before. As we begin to evolve as consumers, managers, and owners, our businesses will start to experience various growth pains. Here are the main growth pains that companies will face in the next 5 years.
1. Product Market Fit With the amount of new companies being set up and products that never get launched, product to market fit will become more important. Regardless how small or large a company is. The key to maintaining a successful product to market fit will become establishing an initial success threshold within the market. Once this has been identified, gauging customers response to the product will become paramount before the product has been developed. All too often businesses today are developing the product in secret without actually understanding who the target consumer are and where they are based.
2. HR hiring process Today, many large companies tend to hire using software systems determining the best candidates based on a number of key words and phrases. For example, if you are applying to a supply chain job at United Airlines, key words that may determine whether or not a recruiter will read your job application include Lean Six Sigma, efficiency, optimization, etc. As companies begin to grow from a small startup, to a mid-size organization, to a large enterprise, they will begin compromising on hiring quality candidates. Especially the ones that are growing rapidly. It’s not necessarily about hiring the person with best experience or grades. It is more about hiring the person with the best fit to the organizational culture.
3. Globalization Globalization has a major impact on a company’s manufacturing ability and competitiveness. On one hand it allows to source cheaper but on the other hand it introduced a new, more global competition that was not there before. This will become even more important in the future, especially taking into account that the world is just getting smaller by the day. Although companies till now have been able to stay price competitive, this will soon become a thing of past. Manufacturing and transportation costs have now been squeezed to the bare bone and any further cost reduction is unlikely (excluding new technologies). Businesses will therefore have to compete on a different level, with more value adding services bundled with their products. A new approach to customer experience with localised knowledge and service quality will have to become the new norm.
4. Retaining Talent The first things that executives think about when discussing Retaining Talent are: spacious offices, happy hours after 5 pm, and unlimited sick days. Although these, (and many more) are all factors that influence decisions, most of the time top management are not asking themselves the most important question “What am I doing to retain and find the very best talent globally?” Retaining key talent and hiring new will become the next big headache especially as the recession is coming to an end. HR will need to evolve to HR 2.0.
5. Innovation In the past, years could have gone between updates and product innovation was done once in a blue moon. Today majority of companies will do 2 to 3 updates every year. Samsung is releasing a new, updated, better phone every 4 to 6 months. Apple does the same. If you do not innovate you lose market share. This innovation cycle will soon transfer from consumer electronic to all other areas. The risk will no more be in innovating a product, the risk will become not innovating. The downside will unfortunately be the quality of the newly released products might go down.
What is your company doing to prepare for growth in the next 5 years?
By Chirag Kulkarni Chirag Kulkarni is a entrepreneur and advisor who has experience in ed-tech, consumer goods, mobile technology, and other sectors. He is currently the CEO of C&M Group, an entrepreneurial strategic consulting firm focused on growth and new product innovation for startups to Fortune 500s. He blogs about startups, innovation, and strategy on chiragkulkarni.com