5 Smart and Data-Driven Tips for Sustainable Business Growth
Discover how HR's insights from human capital management tools and other resources can be key to avoiding barriers to sustainable business growth.
When organizations fail to set sustainable business growth goals, CHROs may find that people are the ones that suffer. As Harvard Business Review (HBR) highlights, lofty targets can mean that that even "the best efforts go unrewarded, leaving people demoralized."
As HR leaders work with executive teams to set growth targets, it's important to be prepared for common hurdles. In many cases, those include the challenge of ensuring profitability and sustainability during and after your organization's growth phases.
Without an appropriate focus on potential trouble spots during growth, your growth initiatives could be doomed to fail before they even begin. So here are five smart strategies for sustainable business growth, and how you can use analytics to evaluate whether your organization is headed down the right path toward success.
1. Geo-Targeted Expansion
Expanding your company to a multinational firm can be among the most challenging and rewarding strategies for growth. McKinsey notes that, while multinational firms comprise less than 1 percent of U.S.-based organizations, they contribute 23 percent to the gross domestic product (GDP).
To help ensure sustainability in a target region, HR should focus on drawing the following insights from their human capital management (HCM) tools:
- Availability and expertise of local talent pools and total compensation by region
- Tax and payroll differences
- Compliance and regulatory requirements
In addition to competitive analysis, understanding your business's potential for successfully onboarding talent in your zone of expansion and meeting compliance requirements can ease growing pains.
2. Market Segmentation
Shifting your product and service offerings to align with the needs of emerging niche markets can result in drastic improvements in revenue. In a Bain case study, one telecommunication company was able to achieve significant results through a segmented approach, by shifting their offerings to meet the needs of enterprise customers.
When evaluating a strategy for market segmentation, HR can draw from existing talent benchmarks and insights from existing communication tools, such as enterprise social networks (ESNs) to make smart recommendations on shaping a new internal organization.
3. Business Partnerships
In the best-case scenarios, successful business and marketing partnerships can double an organization's growth potential. In the worst cases, organizations can suffer through a period of diminished public perception and lost revenue. Entrepreneur recommends careful evaluation of your own resources before entering into a partnership, such as
- People power
HR's contribution to resource-related conversations can be critical, particularly when it comes to understanding your potential to contribute talent, leadership and time to a new effort.
4. New Organizational Capabilities
New organizational capabilities are at the core of many strategies for growth. However, as BCG Perspectives highlights, that can often require drastic changes in talent, leadership, culture and collaboration.
HR should evaluate potential obstacles to developing new capabilities with a comprehensive talent benchmark, as well as an understanding of the current portfolio of tools for cross-team and cross-department collaboration. In many cases, new hires and technology acquisitions can be a necessity.
5. Customer Engagement
At many organizations, deepening existing relationships with clients can be a powerful tool for increasing retention, revenue and the potential to cross-sell products and services. Customer knowledge is at the core of engagement, but organizations can't afford to overlook their talent's role in engaging customers.
If your baseline figures indicate that you have immense room for improvement when it comes to customer engagement, the issue could be culture, disengaged talent or reputation. HR's knowledge of employee engagement and satisfaction factors can be a critical tool for improving your client happiness.
Regardless of your organization's plans for growth, there's a good chance that your people will play a central role. To avoid normal growing pains and employee disengagement following periods of intense growth, HR should contribute insights from smart data to growth conversations to help develop an optimized, yet risk-averse, expansion strategy.