Tag: book reviews

When Growth Stalls, How it happens, why you’re stuck and what to do about it.

By Steve McKee, Jossey-Bass 2009

“when growth stalls, everything begins to break down.  Confidence wanes, and it can be difficult to tell which problems are cause and which are effect.”  This simple statement hits too close to home in an industry where stalled growth has become the rule rather than the exception.

Based on research involving 5,696 businesses across a wide variety of industries and spanning several years, the author identifies 3 external factors that catch us all off guard and 4 internal factors that make things worse.  He found that stalled companies were more likely to have high turnover, lower margins and weaker customer loyalty.   Compounding this is a correlation with unhealthy internal dynamics including: issues involving trust and respect, inability to make lasting decisions, a tendency to overthink things and, in a strange dichotomy, a propensity to either resist change or switch directions frequently.

But wait, it gets worse.  Stalled companies also “unintentionally build mediocrity into the system by losing the best people, hiring “C” people and hiring on the cheap.”

External Factors

Economic factors include both price resistance and increased cost of doing business.   These occur over time and aren’t always noticeable until long after the trend is set.   McKee warns us about cutting expenses: “You can cut your way to survival but not success.”

Aggressive Competition introducing new ideas or factors into the market place.  In our case, examples might include cremationists and low-price providers.  McKee offers this advice:  “Keep close tabs on your competition…outthink rather than outspend them…and consistently look for ways to enhance and protect your differentiation.”

Changing industry dynamics:  “The marketplace has changed and [players] no longer know their place in it.”

McKee offers this interesting insight: “When there is change there is a ‘misunderstanding’ that can be capitalized on.”

Internal Factors

Lack of consensus: “When growth stalls…people choose sides, challenge each other…and begin to doubt…”  The focus shifts from “what do we need to do” to how can we all get along.

Loss of focus:  “McDonalds stalled out when they became too intent on adding restaurants to customers rather than adding customers to restaurants.”  Loss of focus leads to the wasting of limited resources rather than optimizing them.   Things are always changing.  So, “either a company moves or the market moves.”

Loss of nerve:  Leadership is especially difficult when a company is adrift.  Self confidence wanes because it is confusing, discouraging, contagious, paralyzing and wearying.  It challenges a leaders whole notion of self worth.  The risk of change seems greater than the risk of standing still.

Marketing inconsistency: leaders begin to be reactive with emotional hot spots and use advertising in a point-counterpoint fashion with competitors instead of consistently staying on message.  People trust brands that have consistent approaches to their message.  Companies don’t know who they are if they keep changing their message in a fruitless search for a silver bullet that will solve its problems.

The Take Away

• Know you are not alone
• Knowing the seven factors that lead to failure gives us focus and courage to pick up and move forward
• The “Top Box” concept gives you an excellent template for follow-through
• It will require focus, discipline and perseverance
• Find a way to “Mean something to your market and it will reward you.”

I strongly recommend this book to DeathCare professionals who really want to build a thriving business.  It will take discipline and focus, strength and leadership but McKee’s advice will give you a very strong backdrop to make it happen.

Video Interview

Click here for a video interview of Author Steve McKee focused on the application of his concepts to funeral homes.