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The Push for Growth: Why Do Businesses Fail?

Like any company, you’re concerned about things like EPS and driving EBITDA. What company isn’t looking to report record profits?

Cost cutting initiatives may keep companies in line with bottom lines, but at what cost? Large consulting firms exist to help corporations implement large-scale restructurings—process re-engineering, organizational redesign and productivity measures. Rightsizing consolidations are just the beginning.

Cost Cuts may also be Cutting into Your Business Growth

Even when company profits are up, corporate executives are lulled into believing that all is well in Profitville. Cutting costs can be like a drug—one that is very easy to become addicted to. The company’s entire focus turns towards making the numbers, being a Wall Street Darling or wowing the Board. If that’s you, and you’re not careful, you could pay dearly for that approach.

What many executives fail to see is that slow growth often lurks behind those stellar numbers. The shift from bottom line profit to top line growth doesn’t catch anyone’s attention until the slowdown has people scratching their heads. What happened? The excessive emphasis on taking cost out of the business might be sucking the life out of your business.

Year-Over-Year Growth Applies to Profits—and Business

Reporting strong profit numbers never hides the fact that your business is also experiencing flat year-over-year growth. How will you know? Share prices start to tank. Market value goes into free fall. More cost cutting is required to significantly shrink in size to keep the doors open. You may even have to reinvent your brand to save your company. Few succeed.

Here’s the Real Bottom Line: Growing your business is far more challenging than taking cost out of it.

But what happens when stagnant growth becomes the new norm? How did IBM, GE, Ford and Apple turn it around when so many others couldn’t? What are their secrets?

3 Things Every Business Must Pay Attention to … and 1 You Are Probably Missing

The big three considerations that executives focus on are: Growth, Scale and Productivity (profit and efficiency). The one that too often gets overlooked is: Relevance. That’s the one IBM, GE, Ford and Apple went after.

Few companies realize the importance of relevance in their markets—to their customers and among their employees. Yet it is the one consideration of business that is the game changer!

As an Executive, What Keeps You Up at Night?

Most CEO’s of well-established companies when asked that question answer, “Growth.” The push for growth is epic. Everyone talks about growing. But where most companies fall short on growth is failing to understanding that it’s an outcome of relevance.

Steve Jobs was obsessed with relevance. He didn’t worry about reducing budgets to achieve profit targets. Jobs just kept solving consumer problems—ones they didn’t even know they had. He drove growth through consumer demand — ultimately scale and profit followed – not from cost cutting.

Connecting Relevance to Revenue

Achieving relevance starts with your vision for harnessing existing assets in pursuit of new revenue streams. Whenever you introduce a change or start something new—such as bringing a new product or concept to market—you can’t focus on scale and productivity at the same time. If you do, you’ll compromise the natural evolution it takes to bring a new revenue stream to maturity.

You start by building proof cases and demand. Then you get traction. Then you begin to grow. Once you’re on a growth trajectory, addressing scale and doing things more efficiently is easier to wrap your heads—and hands—around.

How Relevant are You Feeling Right Now?

Are the leaders in your company relevant? Is your brand relevant to your customers? Are your products and services relevant? Is being relevant even relevant to your company?

The push for growth, like an excessive emphasis on cost cutting, can cause more businesses to fail than to succeed.

On a 1 to 10 scale, 1 being the lowest and 10 the highest, what score do you give your company for Growth? Now, score your company when it comes to Relevance. Is there a correlation?

Do you believe relevance is the key to growth? Got any tips for what business leaders could do to make their brands relevant?  Agree or disagree, please share your thoughts in the comments section.  And thanks for being relevant to this conversation!

Bio_rose2Rose is the CEO at fassforward consulting group. She blogs about Leadership, Change, Culture and Chocolate Conversations at

You can follow her on twitter @rosefass.

More at Google+Facebook and Pinterest. Comments are welcome, links are appreciated. If you’re interested in writing guest posts for this blog, please contact me.

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