THE OUTSIDER ADVANTAGE : A Growth Hack to Help Small Businesses Win Big
There are so many people working so hard and achieving so little. Andy Grove.
The same can be said for so many small businesses today as suggested by these sobering statistics—
One million new businesses start each year. >40% fail in the first year, 80% fail in the first five years and 80% of the remaining fail within 10 year's time.
Moreover, less than 10% become successful growth companies that are around longer than 10 years.
Most businesses have ambitious plans for growth. Few ever realize them, despite many of them having a formulated business strategy in place, which is a good first step towards achieving sustainable growth. Granted, some even manage to grow incrementally, but sadly most do not achieve the exponential organic growth that they’re capable of.
Why is there such a persistent gap between ambition and performance?
The number ONE reason for this gap—and business failure—is a disconnect which many companies, have between strategy formulation and strategy execution, in conjunction with a lack of consistent focus on organic business growth, expansion and innovation efforts. This is especially true for small businesses.
Typically, if there is a solid growth plan in place, it’s often assumed that once a business is up and running, the rest (strategy formulation, execution, growth and expansion) will happen automatically. Research seems to indicate otherwise.
A survey of more than 400 companies published in Training & Development Magazine showed 49% of business leaders report a gap between their company’s ability to articulate a strategic plan and their effectiveness in executing that vision to achieve desired growth.
Additionally, 90% of these business leaders have had no learning & development opportunities for strategic planning or thinking. This is especially true for those leading small, scientific or technology oriented niche businesses. How, then, can they be expected to implement it in their business?
To add to their challenge, many of these small companies typically lack the ability to dedicate any resources to strategy formulation, execution, organic business growth, profitability and expansion efforts.
So, what are the options for small scientific or technical service oriented businesses that want to grow fast and win big?
This is where the Outsider Advantage can help. This certainly is not a new concept by any means. Larger companies have exploited it by engaging big management consulting firms to help evaluate and formulate their strategy and growth plans for many years.
Most small businesses do not have the resources to engage big management consulting firms or hire chief business / strategy officers.
Most small businesses, however, can gain the Outsider Advantage, a competitive edge to help them go further, faster.
Before we explore this concept further, let’s back up a little and consider some of the other strategies that can be utilized to gain a competitive advantage towards sustainable organic growth. The concept of the Inside Advantage as a business growth strategy has been proposed by Bob Bloom, which asserts that every business has at least one strategic asset or strength that can be identified and exploited for future growth. Bob Bloom calls this an Inside Advantage because this strength, when found, nurtured, communicated, and exploited, will form the foundation of their business growth strategy. This is certainly one strategy that can be effective when implemented.
Lean Plan Advantage is another popular strategy for managing business growth. It is about understanding the minimum viable planning that must be done to help understand the actual results and guide decisions to grow the business strategically. It is a process that helps make decisions about what opportunities are advantageous to take, and which ones to ignore and move the business forward systematically. This approach works very well for some businesses, especially the product-focused ventures.
And then there is the First-Mover Advantage—a concept that alludes to the long-lasting benefit that being first-to-market offers a business over their competitors, but not every business can count on this advantage.
More traditionally, businesses have often utilized seasoned industry Thought-leaders Advantage to help them explore and uncover new growth opportunities when striving to grow. In many instances this strategy works. However, this often results in incremental improvements rather than exponential transformations because oftentimes the same narrow lens is being used to evaluate the business the leaders themselves have. As a result, many companies taking the thought-leader approach become irrelevant and slow to compete, putting their businesses at risk.
This is where the Outsider Advantage can be an effective approach to help small scientific or technical businesses get out of this quagmire and balance the needs of today with demands of tomorrow. Working with a business growth expert such as an advisor, who is not just an outsider to their company but ideally also an outsider to their business niche, can help them gain the Outsider Advantage.
The outside advisor approach brings the benefit of naivety to the conversation. As an outsider with unique and specialized knowledge, they start with a fresh perspective, not held back by the internal biases or by outdated notions of how things have been or ought to be. They raise questions like, “Why can’t we…” or “What if…” or “Yes, if we…” and help re-imagine how things could be by helping formulate different strategies and innovations when and where needed.
Few business owners, no matter what their background, have the breadth of experience and expertise needed to face all the challenges of running a successful business. They have to either not focus on growth and accept mediocrity, or they could rely on guidance and support from business advisors who fill the knowledge gaps in their team, allowing their small business to leverage specialized expertise viewed through a fresh, unbiased lens to help them with their business challenges and needs.
These business advisors can also help challenge existing internal biases, evaluate and update current business systems and processes, offer fresh, objective perspectives and suggest innovative solutions.
Therefore, outside advisors can be the secret weapon a small business can utilize to gain the right expertise, at the right time, and at the right cost to help them go further, faster. As our external world becomes more volatile, a business’s ability to adapt will drive their performance and the Outsider Advantage provides them the edge they need to thrive.
On a more practical level, some of the things that many small business owners struggle with constantly, that business advisors can help with, include:
Not having enough time to work on their business since they are so busy working inside their business
Wearing too many hats due to limited resources and talent at their disposal
Not having enough time to be a leader since they’re busy being a firefighter putting out every day fires
Not having enough knowledge, time, resources to grow to the next level of success
Not generating enough profits to be able to expand their business
Struggling with cash flow and not being able to hire the right talent
Not having any bandwidth to diversify with additional services and revenue streams
Not knowing if and when they may be able to exit from their business successfully and achieve their financial objectives
Why is it then that this excellent resource available to every niche small business is not utilized more often to grow organically and become profitable?
Perhaps the Outsider Advantage is underutilized because working with an outsider isn’t always as easy as managing an employee—CEOs can get overwhelmed by self-doubt and struck by their own blind spots. Additionally, it’s not always easy to know how to go about identifying and engaging with these experts since it’s not the same as recruiting an employee.
However, this is a growth advantage that any small business can benefit from tremendously to help accelerate, and sustain, organic business growth and innovation. As companies grow, they face significant growing pains such as hiring, training and retaining the right talent, updating their systems and processes with innovative ones and integrating with existing ones. All of this requires constant and consistent attention that not all business leaders are able to afford.
Many small businesses have achieved dramatic performance improvements by sustaining a focus on implementation of strategy, working with an advisor to gain that Outsider Advantage to improve profitability, increase revenue and cash flow, accelerate organic growth and Innovation, and ensure business readiness for a successful exit among many other advantages.
In this era of rapid and continuous disruption, every small business needs the Outsider Advantage. If you want to grow your small business exponentially, having a robust strategic plan is the place to start, and execution is the key to success with the help of an expert accountability partner such as an astute business advisor.
Contact us at firstname.lastname@example.org if you would like to explore how we can help your business win big.
Josh.i & Associates : Empowers CEOs of small- to mid-size biotech/medtech/diagnostics CROs with unique and innovative strategies to accelerate all aspects of your business with customized roadmaps for Success.