Business expert and thought-leader Jim Alampi talks about barriers to growth and strategies to overcome them.
There have been many articles written about the predictable stages of growth for companies. The most fateful challenges business owners face are the barriers that arise as they try to move their company through these stages. That’s when companies stumble, and sometimes fail. What if you could identify and prepare for these barriers well before your company had to encounter them? What if you could build a foundation for your company that would enable it to be resilient in the face of these barriers?
[EasyDNNnewsToken:Left Justify Embed 300 x 250]I sat down with business expert and thought-leader Jim Alampi to talk about barriers to growth and strategies to overcome them. As founder and Managing Director of Alampi & Associates LLC, Jim Alampi has devoted more than thirteen years to coaching CEOs, executive teams and Boards of Directors in the areas of strategy, leadership, execution and business improvement. He’s provided advisory services to or spoken before almost 10,000 CEOs and senior executives regarding the lessons he learned as a senior executive at three publicly held companies and as the founder of three start-up companies. He is also the author of the recently released book Great to Excellent.
Here is the first discussion in Cleaning Business Today’s four-part September series “Barriers to Growth: A Conversation with Jim Alampi.”
TOM: Thanks for taking this time to talk with us. Jim, you contend that most businesses fail to grow because they can’t get beyond the natural barriers that every company faces at predictable stages in profitable growth. What are these natural barriers?
JIM: They typically fall into three predictable categories. The number one reason companies get stuck is lack of leadership skills. Number two is a lack of infrastructure required to build the business as it grows and becomes more complex – office space, warehousing, manufacturing, and probably the most important, technology systems. Small companies typically don’t have the expertise to install and support integrated systems. Three is business focus – that is, the fundamental sales, operational and financial aspects that companies need to focus on. Again, the requirements and expertise for this change as a company becomes larger and more complex as the company grows. I wouldn’t be so arrogant to say that there isn’t maybe a fourth or fifth category, but in my thirteen years working with companies, I haven’t found a company yet that got stuck for something that didn’t fall into one or more of the very predictable categories I’ve just mentioned.
TOM: Your experience covers a broad scope of industries. As you know our industry, residential cleaning, is typically low capital and high labor. Are there any differences you might be able to speak to between various types of industries and how your growth model is applied?
JIM: The leadership barrier seems to transcend all industries. When we work with a company, there are really only three levers we seem to be able to affect and help make a difference in execution. Number one is the team and the makeup of the team, which sort of goes hand in hand with leadership. If you don’t have the right team, the right people, and those people don’t know how to lead, it almost doesn’t matter what comes next. Highly people-intensive businesses like residential cleaning require leadership skills, so the makeup of a company’s team is probably the top priority.
I would guess that in your business there’s not a lot of capital-intensive infrastructure. There’s some equipment to support the business and certainly some disposable supplies, but you’re not talking about manufacturing plants and heavy equipment. However, you probably would at some point need technology systems to better support a growing business. The more people a company has out on the job cleaning, the more complex the model becomes. How do you keep track of your people? How do you measure and monitor them? How do you keep notes specific to all your company’s clients? I’m sure residential cleaning companies hit a technology barrier occasionally, probably not as frequently as a manufacturer or distributor would, but they still hit this barrier.
Finally, the business focus is important. For startups, it’s all about revenue and clients. But at some point, the business grows and the owner starts thinking about keeping track of cash flow and balancing it with the revenue cycle. That’s when a leader wants to start getting picky about the quality of the business. The CEO needs to start looking at the contribution margin at the customer level, for example. As the company grows and become more complex, owners have got to think about new skills. I think this applies to the cleaning industry just like any other industry.
TOM: Yes, I would agree. A lot of businesses in our industry started out with an individual who had a desire or talent for cleaning. They started the business without a real strategic plan. You talk about barriers to growth and how it is virtually impossible to skip a step in the phases of growth. Could you explain what this means?
JIM: It’s sort of like a pyramid divided into a couple of different layers. Each level that you hit as you get larger and more complex builds upon the skills, knowledge and experience that were acquired when you hit the previous phase of growth. In thirteen years, I’ve literally never seen a company jump two barriers in one step. I think this is probably a good thing. There is only so much information that leaders and companies can assimilate. Hitting each one of those barriers, having to hit it intelligently and figure out what to do differently to get over the next barrier requires a real learning process. That process is as important as getting over the barrier. It’s probably a good thing that I’ve never seen a company jump two barriers because it really does require building blocks and doing things one step at a time.
TOM: Let’s focus on systems and structure for a moment. You talk about a progression. In other words, most residential cleaning companies start out with very basic office systems – perhaps a computer, some processing and spreadsheet software, and a phone. But if a company is growing, more can be required quickly. Could you address technology systems and explain how they can contribute to either business growth or failure?