Finding growth in a constrained market

There's no doubt, now is a difficult time to be a CEO. A really difficult time.

We've been through the crisis that was COVID and we've realised the 'new normal' is just as confronting, perhaps more so. The pace of change is greater than ever before and we have a harsh fiscal reality that includes costs rising unsustainably, wage growth, rampant inflation, and sluggish economic growth not keeping pace with those rising costs. On top of that, increasing public and regulatory scrutiny means boards are becoming ever more risk averse.

When times get tough, it's instinct to shut down and play the defensive game – cut costs, reduce headcount, postpone projects, and stick to core business. But there's no growth in that, only survival at best and decline at worst.

So how do we find growth in a constrained market? The secret is being able to do two things at once manage the duality, control costs while finding a way to grow. Few manage it, but those who do excel. And so do their businesses.

First, we must acknowledge that we have to manage the now and the future at the same time. That's the duality of leading for growth. Very few businesses are afforded the opportunity to grow unconstrained, so it's important to be able to run the business at the same time as transforming the business model.

How to make it happen?

We implement the steps in the order 1, 2 and 3, but we think about them in the order 1, 3, 2.

1. Know (3 months)
Know what needs to be managed.

2. Do (18 months)
Actions to manage the present and prepare for the future.

3. Envisage (3+ years)
Envisage your organisation's future.

Number 1 means getting clarity about the current reality. A thorough stocktaking and analysis. What are our numbers? Are we performing to expectation? Not just the bottom line, but all the pressures coming to us in the current business environment. What are the trends doing to us? What do we need to plan for?

Number 3 is our next thought. Where would we like to be heading? Rather than thinking generally, be specific. What are the one or two really important things we want to achieve in the medium future? The things that will give us a new direction or add value to what we do today? That is, provide a platform for growth. What is on the horizon that we can reach for and grasp? What is possible?

Number 2 is where we get traction. This is where we build a plan of actions that will help us manage our current constraints while building both capacity and capability to turn that future possibility into reality. We prioritise and force trade off decisions, you can't run at everything at once. Better to do the big things well.

This process is more than finding a balance between the needs of now and then. It's about focus. By understanding deeply the situation we're in and making targeted choices about the future we want, we are able to make the hard decisions about what really matters now. As the saying goes, strategy is about what you say no to – what you don't do, as much as what you do. It takes financial acumen, strategic thinking, an innovative mindset, and expert resource allocation. Independent, objective expertise can be very helpful in this process.

The 'new normal', of course tells us this environment is here to stay. It's not something to be endured, but exploited. This is an opportunity to think big, not just incrementally. And it's an opportunity to be not just an inspired CEO, but an inspiring one. To banish the negativity of a constrained economic environment, the overwhelming nature of rapid change, and the disruption of technology that is transforming how business operates.

So yes, it's a difficult time to be a CEO, but it's a great time to lead.

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