Tag Archives: Obstacle

How Do You Institutionalize Double-Digit Growth? Six Suggestions

Situation: A company is enjoying 10% organic growth per year and wants to sustain this growth rate. They enjoy a favorable position as a technology leader. Their principal strategy is to continually advance the technology. The chief obstacle to ongoing technological superiority is getting the right people to populate their brain trust. How do you institutionalize double-digit growth?

Advice from the CEOs:

  • Look for domestic office locations that have the right talent but a lower cost of living. Florida presents attractive cost of living with low employee turnover.
  • Can the company compartmentalize?
    • Set up a remote location, run by a trusted individual, and do portions of the work there.
  • Be aware that teamwork within the company becomes a challenge with remote locations.
    • A communications strategy – for example videoconferencing – can help to engender teamwork across distance.
    • The pandemic made videoconferencing a far more viable alternative than it was prior to the pandemic.
  • If the company’s infrastructure is highly bureaucratic or the cost of quality high, can adjustments be made that will relieve some of the cost pressures?
    • Creating “Hot Teams” is a method to developing new, innovative solutions.
    • Can the company’s technology be leveraged to improve productivity – for example, using modeling and simulation to reduce prototyping costs?
  • Can the company employ knowledge management?
    • Gather lessons learned from past and recently completed projects.
    • Share good or best practices.
    • Make sure that new efforts do not start from scratch.
  • Consider outsourcing to universities, with proper contracts.

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How Do You Forecast Revenue for a New Technology? Three Ideas

Situation: The Board of a company has asked the CEO to generate to forecast of revenue for this year. Their primary technology is new and the company has just started receiving orders. An achievable revenue forecast my not please the Board. However, the company may lack manufacturing capacity to meet a higher level of demand. How do you forecast revenue for a new technology?

  • Be realistic in your forecast. While the Board may not like your number, the impact of setting the goal too far out of reach is potentially significant, including discouraging the team, and impairing credibility with the Board. However, if you aim realistically and significantly exceed the target you will be heroes.
  • How is it best to approach this in discussions with the leadership team?
    • Create a set of objectives and revenue targets and put probabilities around each. Also look at the obstacles to hitting the higher numbers, including manufacturing capacity and the cost of increasing capacity.
    • For examples if your most likely forecast is $X, then put probabilities around achievement of multiples of this number:
      • $X – 95%
      • .75X – 99%
      • 1.5X – 75%
      • 2X – 60%
    • Once your determine the objective, think through everything that must be covered to meet that goal, from sales to production, and start developing plans and contingencies to address these.
  • Share your probabilities with the board, as well as your plans and contingencies that may increase likelihood of reaching the higher targets. Ask for their input and assistance hitting the higher targets.

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