A new survey from SAP and Delta Economics tells us that fast growth companies should beware of growth. What nonsense. Put your foot on the accelerator and enjoy the ride.
The latest analysis by SAP UK & Ireland and Delta Economics is a wonderful read if you were, say, as enquiring as the Mad Hatter. Because if you delve a bit further into the stats it appears that within the tea party of failure some 33 per cent of those businesses that disappeared were acquired.
Outrageous, I blame the government. Scrap that, I blame global warming. Except, wait a minute; what is wrong with being acquired? Isn’t that the point for many entrepreneurs? To build brands and then sell them?
This sort of research is meaningless because it lacks a usable lesson. What does it say? Maybe, "turn down that next multi-million dollar contract Mr or Ms Minnow. You can’t handle it." I am sure it’s not meant to come across as condescending but the problem is that it does.
Yes, recruitment companies haven’t done well in down turns; yes, companies come and go; yes, companies need to manage the challenges of growth. Blah, blah, yes, but so what? It’s not only small companies, it’s large ones that don’t stand the test of time either – perhaps something for their next piece of research.
Try this fact. Out of the 500 companies in the Fortune 500 in 1957, only 74 remained over four decades later. What does that say? Perhaps that uncertainty is the only certainty we have and that the sooner we embrace that truth the sooner we can get on with it rather than overanalyse it.
So, rewind. How about a few facts that entrepreneurs can do something with:
- Growth is good. It is the driver that spurs on business and builds successful capitalist economies. Forgive me, but last time I looked the planned economies of the Soviet Union were as redundant as this survey. Entrepreneurs aren’t King Canute. They need to meet the challenges of growth not turn them away.
- Businesses have ups and downs. Key is, how able are you to make hay while the sun shines, and to survive the winter when it doesn’t. That means building better businesses while you grow. As General Patton said: “A good plan executed violently now is better than a perfect plan executed next week.”
- Risk is all around you. It’s not just fast growth companies that face risks, it is all startups. That is why they are such precious resources that need to be given every level of encouragement they can to survive.
It will be entrepreneurs themselves that decide how much success they can handle. So, my advice, for those that might want it, is go for growth and enjoy the ride.
Drive it with the furious determination of a Formula One driver and make the most of the time you have to build the business you deserve. In the end we all face a bit of time in the pit so enjoy it while it lasts.