Interview by William Strange,
Purpose – The purpose of this article is to provide an interview with Rupert Merson, author of Guide to Managing Growth.
Design/methodology/approach – The interview is conducted by an independent interviewer.
Findings – Rupert Merson teaches new venture development and managing growth at London Business School. Formerly a partner at BDO, he now runs his own consultancy advising firms on how to manage growth. Rupert publishes frequently in the national press on a broad range of business topics. He has published four books on the key roles in the growing business, and co-authored a fifth book on the family business. A sixth book, Rules are Not Enough, on corporate governance, was published in February 2010. His latest book Guide to Managing Growth was published by The Economist in the Summer of 2011.
Practical implications – Rupert Merson looks at the pitfalls of management in maintaining and planning for growth. Through his interview, Rupert offers practical advice on what businesses should be doing in order to sustain successful growth.
Originality/value – Growth is not something that, once initiated, can be left to its own devices. Rupert gives valuable insight and offers pointers as to how HR professionals can stay on top of company growth strategies and reach company targets.
Leadership; Growth; Business; Strategy; Human resources; Economic growth; Management activities.
Emerald Group Publishing Limited
Rupert Merson teaches new venture development and managing growth at London Business School. Formerly a partner at BDO, he now runs his own consultancy advising firms on how to manage growth. Rupert publishes frequently in the national press on a broad range of business topics. He has published four books on the key roles in the growing business, and co-authored a fifth book on the family business. A sixth book, Rules are Not Enough, on corporate governance, was published in February 2010. His latest book Guide to Managing Growth was published by The Economist in the Summer of 2011.
Could you tell us a little about your professional background and how you came to write Guide to Managing Growth?
I am an accountant but I am also an HR person. I am an adviser to clients with problems that sit between accountancy and human resources – that includes lots of classic growth issues. I also teach at London Business School, where I have taught for 11 years as well as other business schools in China. My writing stems out of my work with clients and my teaching.
How would you define growth?
Attempting to define growth can lead to problems! It is very easy to oversimplify what growth is about. The world is full of businesses/sales people who focus too much on growing turnover at the expense of growing profit. On the other hand there is a financial mentality, a CA mentality, that can occasional worry too much about growing short term profit by sacrificing the investments necessary to secure growth in the future. Different types of industry will look to different definitions of growth – asset based, or people based, resource based, or market share. The most important thing we should conclude from any attempt to define growth is that growth is a complicated thing and you are likely to need more than one measure. Successful growth is also about keeping lots of balls in the air.
You explain in your book how management can often stifle the growth of a company. How can management ensure they do not fall prey to this?
This is difficult. I think we need to recognize that much of what passes for good management is rational, logical, analytical, cause and effect; whereas much entrepreneurship that delivers success is often irrational, happenstance, unpredictable. Anything that's got a human being at the middle of it should we wary of the rational. I think that planning processes which are inherently rational need to find room in them for the irrational and the unpredictable if they are going to stand the best chance of delivering a successful growth strategy.
You say that growth demands change, but if it ain't broke, don't fix it!? How can a leader identify what needs to change in an organization in order to protect its continued evolution?
The old mantra of “if it ain't broke, don't fix it” is dangerous if you are serious about growth. It is not a question of whether things are broken or not, it is a question of whether they are fit for purpose for the next stage of the evolution of the business.
It is therefore important that planning processes find ways of identifying and articulating the unknown. Too many planning processes will take last years numbers and see how they can be tweaked up. Given that growth is about change, what worked last year almost by definition is not going to work next year. Indeed what worked last year may well act as a constraint on future growth. Finding ways of challenging and questioning the sacred cows that got the business to where it is now is critical.
How does a leader best identify growth relevant to their particular responsibilities or division and integrate this into a company vision?
I assume you are imagining a business that has got to the stage where it is multi-divisional and is inherently therefore a complex organization. In all likelihood each division within the business will have different growth problems and issues with different growth agendas within it. What's working for one part of the business will not necessarily to work for another one. Different strategic and organizational imperatives are going to apply. This issue is particularly relevant to organizations created by acquisitions and mergers which are self evidently the aggregation of different businesses into one: obviously those business units are going to have different strategic imperatives. Too many business managers believe the rhetoric that both parties to a merger are similar and unsurprisingly mergers and acquisitions don't deliver the value they are supposed to.
Do you have any tips for accurately identifying risks to growth?
If I had to pick on one thing, in my experience a lot of the problems of growth are tied up in the capability and capacity of the management team. There's another “C”! – the capability, capacity and complacency of the management team, which is also about the inability or reluctance of the business to change things which were responsible for last years success and maybe which have therefore delivered this year's bonus and which last years appraisals gave lots of ticks and stars and chocolate buttons for.