Business Growth & Exit Ready Weekly November 20: The Hidden Growth Gaps Costing Your Business: Simple Fixes for Bigger Profits and Performance
Rod Fraser
Business Growth Mentor, Strategist + Investor - Helping business owners grow and scale, a profitable, valuable, and sellable business.
Welcome to the Business Growth & Exit Ready weekly newsletter!
This week, let's explore The Hidden Growth Gaps Costing Your Business: Simple Fixes for Bigger Profits and Performance
It's time to zoom out and look at the business as a whole, to work out what's working, what's not, and where the gaps might be. When you are in it, it can be hard to get perspective and know what to focus on, let alone prioritise above the daily whirlwind and grind.
As you read through this week's newsletter take notes, and highlight what resonates with you. Pick one thing and get started. Take action. When you layer these fixes the compounding effect might surprise.
If you are in overwhelm... simply stop and take a breath. Get help to think things through. You don't need to work it out on your own. In my experience getting the right help can save time, money, energy, and wasted effort. It can help you reset, focus, and move faster.
If you need a strategy session let's chat. I am here to help.
I hope you get something useful from this week's newsletter.
Rod Fraser - Business Growth Mentor, Strategist + Investor
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Quotes of the week:
Gallup: “Highly engaged teams show 21% greater profitability.” (State of the Global Workplace)
Jim Collins: “Great vision without great people is irrelevant.” (Good to Great)
Harvard Business Review: “Increasing customer retention rates by 5% increases profits by 25% to 95%.” (The Value of Keeping the Right Customers)
Project Management Institute: “Agile organizations achieve 80% higher project success rates.” (Pulse of the Profession)
This Week's Article:
The Hidden Growth Gaps Costing Your Business: Simple Fixes for Bigger Profits and Performance
Small to medium-sized businesses (SMBs) often face challenges in building operational efficiency, team cohesion, agile responsiveness, and data-driven decision-making. By addressing these gaps, SMBs can unlock powerful improvements in performance, profitability, and long-term sustainability.
Here, we outline the critical growth areas SMBs frequently overlook, the tangible costs of inaction, and a step-by-step action plan to enhance efficiency, boost productivity, and strengthen team culture.
1. Building Culture and Team Cohesion
Team cohesion and a strong culture provide the foundation for efficiency and productivity. When trust and alignment are present, team members work together more effectively, avoiding the communication breakdowns and disengagement that lead to inefficiencies.
According to Gallup, businesses with highly engaged employees enjoy 21% higher profitability and experience much lower turnover. For SMBs, a cohesive culture reduces the cost and disruption of frequent employee turnover and improves overall operational efficiency.
2. Data-Driven Decision-Making and Digital Transformation
While many SMBs struggle to keep up with digital transformation, data analytics offers essential insights that help streamline operations and improve efficiency. MIT Sloan found that data-driven companies enjoy 6% higher productivity and 5% more profitability than their counterparts.
For SMBs, adopting simple data tools (such as a CRM) can lead to more informed, efficient decisions across sales, customer service, and marketing, resulting in fewer wasted resources and optimized spending.
3. Embracing Agile Practices for Flexibility and Efficiency
Agile methodologies, such as Scrum, promote iterative improvements and responsiveness, which are critical for maintaining operational efficiency in fast-changing markets. According to the Project Management Institute, agile practices improve project success rates by 80%, enabling teams to be more efficient and adaptable.
Implementing even small Agile practices can prevent wasted effort, streamline project timelines, and improve customer satisfaction—all essential to SMB growth and productivity. A Scrum approach also builds stronger teams with clear outcomes that drive collective action.
4. Leadership Development and Coaching
In small teams, every team member’s influence is magnified, making leadership development critical to operational success and long-term growth. Investing in leadership skills empowers team members to take ownership, think strategically, and lead through others.
LinkedIn’s?2023 Workplace Learning Report?found that 94% of employees would stay longer at companies investing in their growth, which reduces turnover and productivity losses.
5. Delegating and Reducing Dependency on Key Individuals
Reliance on the business owner or a few key team members can become a major inefficiency for SMBs. Harvard Business Review notes that dependency on key individuals can create productivity bottlenecks, slowing down processes and limiting growth.
Delegating responsibilities and documenting processes helps distribute workload, empowers team members, and reduces bottlenecks, resulting in faster operations and increased resilience. It also frees the key people to be more strategic in the business.
6. Customer Retention and Experience
For SMBs, focussing on customer retention and satisfaction is essential not only for revenue but also for operational efficiency. Repeat customers require less acquisition effort, and they’re more familiar with processes, reducing customer service time and costs.
Harvard Business Review reports that increasing customer retention by 5% can boost profits by 25-95%. Loyal customers bring repeat business, simplifying sales and allowing SMBs to maximize their resources and reduce marketing expenses.
7. Operational Efficiency: Streamlining Workflows and Reducing Waste
Operational efficiency—the ability to maximise output while minimizing input—should be a priority for SMBs looking to improve profitability and productivity. Inefficient processes can cost SMBs both time and money, limiting their capacity to grow.
By mapping out workflows, eliminating redundancies, and introducing productivity tools, SMBs can achieve a leaner, faster, and more profitable operation. One of the advantages of using an agile framework like Scrum is to work out how to move faster, and easier with every sprint in a project.
Reference List
Book Recommendation
Measure What Matters by John Doerr
Measure What Matters by John Doerr provides a powerful framework for goal-setting through Objectives and Key Results (OKRs). OKRs have been instrumental in the success of companies like Google, Intel, and the Gates Foundation, helping them align teams, track meaningful progress, and accelerate growth. The book outlines how OKRs foster a culture of focus, accountability, and transparency, making it a valuable tool for SMBs looking to streamline operations and achieve impactful results with limited resources.
Key Takeaways:
1. Objectives are "What" You Want to Achieve: Objectives are high-level goals that set a clear direction for your team or organization. They should be ambitious, inspirational, and align with the company’s mission. For SMBs, having focused, overarching objectives keeps the team aligned on what matters most.
2. Key Results are "How" You’ll Measure Success: Key Results (KRs) are specific, measurable outcomes that indicate progress toward the objective. KRs should be time-bound and quantifiable, giving SMBs a clear, actionable way to gauge performance. For instance, instead of setting a broad objective to "increase customer satisfaction," a KR might be "achieve a 90% customer satisfaction score by the end of Q3."
3. Focus and Simplicity: OKRs encourage simplicity, urging teams to focus on just a few key objectives rather than many. This is particularly beneficial for SMBs, where resources are often limited. Doerr advises setting no more than 3-5 OKRs per cycle to ensure that energy and resources are concentrated where they matter most.
4. Transparency and Accountability: OKRs are meant to be public within the organization, allowing all team members to see each other’s goals and progress. This transparency promotes accountability, helps teams support each other, and builds trust. For SMBs, where team cohesion is vital, OKRs can create a culture of shared goals and mutual support.
5. Regular Check-Ins and Adaptability: OKRs encourage regular check-ins (often weekly or bi-weekly) to review progress and make adjustments. This rhythm helps SMBs stay agile and responsive to challenges, ensuring that team members stay on track or pivot as needed to meet their objectives.
6. Continuous Learning and Improvement: OKRs are a tool for not only achieving goals but also learning from the process. At the end of each OKR cycle, teams assess their performance, reflect on successes and obstacles, and apply these insights to the next cycle. This iterative learning approach is ideal for SMBs looking to evolve quickly and continuously improve operations.
7. Commitment and Stretch Goals: Doerr distinguishes between committed OKRs, which are essential to meet, and stretch OKRs, which push teams to strive beyond what’s comfortable. Stretch goals help teams reach higher performance levels and spark innovation—a valuable mindset for SMBs aiming to grow beyond their current capabilities.
By adopting OKRs, SMB owners can create a disciplined approach to goal-setting that saves time, clarifies focus, and builds a cohesive, motivated team. Measure What Matters provides real-life examples and practical insights that make OKRs accessible and impactful for businesses of all sizes, making it a must-read for any SMB leader aiming to achieve growth with efficiency and purpose.
Rod Fraser - Business Growth Mentor, Strategist + Investor
Business Growth Strategies Pty Ltd
Helping business owners grow and scale a profitable, valuable, and sellable business.
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Check out our last two newsletters from Business Growth & Exit Ready
November 13: Is Your Team Stopping Your Business Growth? How to Achieve Cohesion, Clarity, and High Performance
Here is our last article: Building Growth, Profitability, and Sale-Readiness with the Right Mentor