In a strategic planning retreat a few years back, we were debating the appropriate mix of client focus, between acquiring new business and growing the firm on the one hand, and internal initiatives improving the organization on the other. I sketched a picture on the whiteboard similar to the one below, and suggested there were two possible pathways around the firm’s primary obstacles. We called the first of these paths “grow, then fix,” and the second path “fix, then grow.”
Before the recession, most professional services firms rode solidly along path #1, employing the ‘grow, then fix’ strategy. Business was good in most markets, and companies invested their energies serving clients. Many firms postponed internal operational improvement initiatives, choosing instead to “make hay while the sun is shining.” However, forward thinking leaders did spend some of their time and treasure improving their businesses while still growing fast – including efforts in sales and marketing, operational effectiveness, and staff development.
As the economic downturn caught up with companies and growth slowed, and firms had the chance to shift their efforts to path #2, the ‘fix, then grow’ approach. With fewer pressing client projects, the company could instead clean house, tighten up operations, and high grade staff. Many organizations did some of this, but only the best firms did enough. Candidly, it takes courage to invest in long-term success during a recession, when resources are short and prospects uncertain. Studies have shown that those organizations who do prepare for success during the downturn accelerate into the recovery much faster than others. Still it’s a difficult for most.
Recalling that planning session, we it was clear that managers saw the issue differently. Folks have differing viewpoints. Some are ‘grow, then fix’ people, others are ‘fix, then grow’ oriented. Both perspectives have merit. The critical insight here is each of these strategies requires action. Diverting attention from clients in a brisk market to improve internal operations isn’t easy, and neither is investing in organizational enhancement when the money is tight. Still, in both scenarios these efforts help the firm to balance top line revenue growth with bottom-line profit retention. Both are important to long term growth, profit, and success.
Do you remember Robert Frost’s famous poem The Road Not Taken? Most studied it in high school, and learned that we should all take the road that others eschew – the road less traveled – because that can make a real difference in life. But a closer reading of the poem reveals that of the two paths “the passing there had worn them really about the same.” There is a different (and I think more important) conclusion possible. If both paths were trod similarly, then the path chosen isn’t as significant as is the choosing per se. Or as philosopher Yogi Berra once put it, “when you come to a fork in the road, take it.”
What all leaders must do – in economies both strong and weak – is avoid inertia. Over-obsessing on the obstacles to success only leads to getting stuck in the middle, between the two paths. Leaders must choose and commit (that’s what strategy is about), with understanding that the progressive organization should always pursue a balance of externally and internally focused business efforts.
The Fast Future is upon us now. The global, uber-scale winds of transformational change are blowing with full force, and in many cases accelerating. It’s not likely that the business of professional services will get any easier. Now is the time to improve the firm for future, sustainable success. Whether it’s ‘grow, and then fix,’ or ‘fix, and then grow,’ if you’ve been postponing a choice, it’s time to get going.
And remember that it’s taking action – creating and executing a plan – that ultimately leads to extraordinary outcomes.
Cheers,
John
