When it comes to growth strategies, conventional business wisdom tends to stick to the same tried and tested formulae.
That wisdom tells us that growth happens as a result of four things. Market expansion/penetration. Product/service expansion. Increasing customer numbers, improving customer retention and/or raising customer lifetime value. And finally, revenue-driven growth is achieved by cutting costs and/or increasing revenue or margins.
All of this remains valid. Selling more to more people who are prepared to spend more – while at the same time reducing your costs – is a pretty good recipe for growth.
However, a recent report from business software developer SAP raised the point that the conditions that influence growth are changing. Digitisation, the data economy and the need to put sustainability at the heart of business practice are all influencing how businesses grow and are shifting the parameters around growth.
As business expansion is ultimately measured in profits, growth strategy has traditionally been led by finance departments and directors. However, issues around digital technology and sustainability represent new territory for finance officers.
They can of course seek support from colleagues in other departments in understanding the issues and how they impact growth strategies. But this also further underlines the benefits of seeking help from external business advisors – experienced, well-rounded professionals who can draw on a wealth of expertise to provide specialist insight into matters that can have a big influence on your business.
Here are four examples of ways a professional business advisor can support your growth planning outside the ways you might expect.
Technology is the single most disruptive force in contemporary business, and it has fundamentally changed the way organisations plan for and achieve growth. Those changes are mostly positive. With integrated digital infrastructures, automation, data-driven intelligence and AI, it’s easier than ever before to identify opportunities for growth, drive efficiency gains and control all the variables that can hamper growth plans.
But digitisation comes with its costs. At a time when every competitor is leaning into technology to realise its ambitions, you must get your own investment and development plans right to support growth strategies. It’s more important than ever for CFOs and CIOs to work in tandem. A business advisor can play a crucial role in joining up finance and tech so are both pulling in the same direction.
Digitisation means modern organisations are awash with data. There’s a reason why data is nowadays referred to as the new gold – data is the raw currency on which the information economy is built. And growth today means growing in that information-led economic landscape. Knowing the right moves to make, when, with agility and precision at the same level or better than your competitors.
It also means knowing the right data to use, and how to use it. Data science is an increasingly valuable business commodity. But it also requires adjusting reporting and information-sharing structures to account for this flood of digital intelligence. Again, this is an area of expertise business advisors can provide.
One of the major downsides of digitisation is the rise in cybercrime. In 2022, cybercrime accounted for a record $10.3bn in financial losses in the US – a huge drag on financial performance and growth. Cybercrime can hurt businesses in lots of different ways, from direct financial losses to operational disruption and reduced productivity, and also by causing significant reputational damage.
Cybersecurity therefore has a significant role to play in protecting growth. Approaching it strategically so you know what to protect and do so in a robust fashion is essential. Again, this requires business know-how as well as IT know-how.
Finally, with environmental policy increasingly bearing down on business activity, it’s easy to view the sustainability agenda as a yoke that holds business growth back. But sustainability is also a huge opportunity, with the transition away from the so-called ‘carbon economy’ estimated to be worth $10.3tn by the middle of the century.
‘Green growth’ means incorporating sustainable practices into your business in ways that support and even enhance revenue growth, finding efficiency gains etc. Expertise on how to implement this at a strategic level can give any business a significant head start over competitors.
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