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Overcoming Stagnation And Implementing Change To Facilitate Business Growth: The How-To If a business is stagnant and resistant to change, it reflects the state of the management approach within the business.

By Sadek El-Assaad

Opinions expressed by Entrepreneur contributors are their own.

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There are businesses that see their business graphs growing, and those that see it failing. In both these cases, they can relatively easily draw up an action plan to either keep the momentum going, or to help the business pick up speed. But the most challenging scenario for any business is when they see their graph plateauing. A business plateau is when the graph becomes a straight line, indicating that revenue and profits are flat and even. Helping an organization out of this situation is not a matter of fast or frenzied action, but one that requires a strategic approach.

I've seen this kind of stagnation frustrate all levels of entrepreneurs and business leaders, but most commonly, this is a situation most successful startups face. They would have proved their business model, designed a successful product, have great marketing in place, and built a business that they are heavily involved in. However, after a point, they struggle to find the time or means to scale their business from being a startup to a mid- or large-sized venture. This is the indication for the need to change.

If a business is stagnant and resistant to change, it reflects the state of the management approach within the business. That's why every business transformation initiative must be focused on structuring the business for the purpose of growth. The fixed mindset, and the "what got us here will get us there" approach is what stunts any organization from growing. Changing the approach, in a well-defined and structured route, will guarantee the upward direction of the graphs and numbers.

During the startup phase, every entrepreneur or leader is usually heavily involved and invested in the business by having their finger in every pie- from product design and marketing, to finance, operations, human resources (HR), and more. This is understandable and essential, because when setting up a new venture, they want to ensure that every detail is being taken care of, the way they wanted. Exerting this level of control over every aspect of the business offers them the reassurance that they are building their company around their original vision and mission.

Related: Five Tips To Avoid Burning Out As An Entrepreneur

However, when the business achieves decent revenue and profitability, and it needs to scale, it's important to move beyond this stage and develop systems and processes that enable the entrepreneurs or business leader to make the transition from working in the business, to working on the business. Overcoming stagnation is about understanding that doing the same thing over and over again will give you the same results over and over again. But bringing about change in the former will naturally impact the latter.

The three main objectives in any transformation initiative that aims to set up a strong foundation to scale or grow a business are: become financially lean with the ability to scale either up or down as per market demands, become internally efficient, and to run its day-to-day operations independent of its founder or leader.

Becoming financially lean is essential from both a continuity and growth perspective, and it is what business agility is all about. Ideally, it would be wise to aim to maintain 60-70% of the total operating cost as fixed costs, while keeping the remaining as variable costs, allowing for flexibility to adjust the costing structure based on business needs, while maintaining profitability throughout the transition- and beyond.

When an efficient business achieves this level of financial optimization and is managed by a competent team, then the founder or leader will have the time to work on the business, concentrating on long-term growth strategic issues, instead of the day-to-day of the enterprise. They will be able to put energy and effort into scanning the horizon for opportunities, finding improvements, and spotting potential challenges that lie ahead. This next level of the entrepreneurial and leadership journey is about building relationships, expanding supplier networks, finding and setting up new revenue streams, and scouting talent while identifying broader business needs and navigating higher-level challenges.

Business stagnation is not an indicator or a precursor to failure. It is simply an alert that change is imminent. I would say that a plateau in numbers is a significant positive indication of the business model, and a sign that it is ready to take the next step forward and grow. All it takes is to acknowledge the need to change, and get the right transformation initiatives onboard.

Related: Building A Business Is About Growing- Both The Business And Yourself

Sadek El-Assaad is the founder and CEO of Zeder Group, an executive consulting firm specialized in optimizing businesses cost structure, revenue streams, and team capabilities. He has helped businesses, entrepreneurs, and CEOs to fast track their growth, avoid pitfalls and strengthen their companies for the future. El-Assaad is an expert in developing specific, tailor-made solutions for businesses including the development and implementation of transformation strategy from situational and crisis management, to capabilities assessment and growth enablement using leadership and team assessment, operational dependencies, and barriers assessment, cash management, and financial visibility structure as well as C-level appointments.

El-Assaad is a commercially oriented executive with 30 years of experience in delivering organizational development and management services to some of the world’s largest organizations. A pioneer in change management and an expert in organizational growth and transformation, he was the Global Chief HR Officer for Aramex, Vice President – of HR for Carrefour Hypermarkets in the GCC, among other roles with global and regional organizations. He has co-founded and advised several tech startups ensuring ideas are transformed into operating businesses.

El-Assaad has an MBA in human resources management and a BA in business administration from the American University of Beirut. He is certified Assessor Level A and B by the British Psychological Society, is a Master NLP Practitioner, a business success profiler, and holds various certificates from London Business School, INSEAD, Singularity University, and others.


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