Rethinking Strategy to Encourage Corporate Growth
Since the beginning of the COVID-19 pandemic, it seems as if businesses have been facing an uphill battle when it comes to corporate growth. According to a survey conducted by the Association for Corporate Growth Western Michigan and MiBiz, companies saw inflation and talent/labor force as their biggest hurdles for the next 12 months. Many businesses are having a hard time recruiting employees and many current employees are job-hopping and not staying loyal to one company. This is costly to companies. Not only are there costs involved with recruiting efforts, but once an employee is hired, there are costs involved with training the employee. Furthermore, inflation is rising the operating costs of companies, including the costs of resources and supplies.
These hurdles are forcing businesses to rethink their strategies of the past to minimize expenses and still grow as a company. One of the strategies that many companies are utilizing is shrinking the package size without lowering the price. This strategy has been named “shrinkflation” in the news. Examples of this occurring are Chobani Flips yogurt shrinking from 5.3 ounces to 4.5 ounces and Cottonelle Ultra Clean toilet paper has shrunk from 340 sheets per roll to 312 sheets per roll. Additionally, coffee drinkers have seen shrinkflation as well with Folgers coffee shrinking their packaging from 51 ounces to 43.5 ounces. Shrinkflation allows the company to not rise prices for their customers, but also allows the company to save costs.
Another strategy that companies need to consider is the new markets that they could enter. This strategy can be risky, but it can also pay off quite well for the company. There are multiple ways that a company can enter a new market. The first could be through a merger and acquisition. This might be acquiring a company that offers similar products or services in a different geographic market. It could also take the form of opening a new office or facility in a new geographic market or territory. Furthermore, a company could choose to offer a product or service that expands its current offers. Lastly, if the company feels that it is too risky to jump into a new market, the company can always run a smaller pilot program to see if the new market would be profitable.
Companies can also choose to focus on efficiency and value to their customers and clients. The more value that a company can provide to its customers and clients, the more likely those customers will maintain their relationship with the business during an economic downturn. Treating customers well and understanding their needs will benefit the company in maintaining a long-term relationship with those customers. This may also take the form of the business being flexible in its pricing and possibly offering rebates or discounts to continually attract customers. This is critical to encouraging corporate growth, especially during economic downturns.
Additionally, companies, which have traditionally hired for experience, may want to use the strategy of hiring for potential instead. It is only natural that many companies will want to hire the ideal candidate that has the best skills that would complement the company. However, in a tight labor market, hiring for potential provides the company access to a broader talent pool. The broader talent pool may not have the experience, but their willingness to learn and possibly hone their existing skills could lead to these employees being grateful for the experience and becoming loyal employees with the company. This broader pool of employees could also bring a fresh perspective to the company which could lead to additional opportunities that the business could partake in.
Lastly, the four-day workweek may be a beneficial strategy for businesses to utilize. The pilot tests performed in various locations throughout the world have shown that the majority of companies will be maintaining the four-day workweek due to the popularity it received among employees and supervisors. The benefit of the four-day workweek is two-fold. The company has more loyal, productive, and satisfied employees and the employees experience greater work-life balance, lower stress levels, better sleep, and more positive mental health.
The uphill battle that businesses are currently experiencing will take them updating their strategies and embracing areas that may be uncomfortable for them. Strategies should be reviewed at least annually, but also when a situation dictates that it needs to be reviewed, such as what companies are currently experiencing. Many companies may not be comfortable with adapting; however, the risk may be what sets them apart from their competitors and gives the company an advantage over their competitors which will encourage their corporate growth.
Sources
Andy Balaskovitz, “West Michigan executive survey: Talent, inflation pose critical hurdles to growth”, November 20, 2022, https://mibiz.com/sections/finance/west-michigan-executive-survey-talent-inflation-pose-critical-hurdles-to-growth
Associated Press, “’Shrinkflation’ accelerates globally as manufacturers quietly shrink package sizes”, June 8, 2022, https://www.npr.org/2022/06/08/1103766334/shrinkflation-globally-manufacturers-shrink-package-sizes
Terry Collins, “Survey says: Employers leaning more into hiring those with skills versus experience”, August 1, 2022, https://www.usatoday.com/story/money/2022/08/01/employers-hiring-skilled-workers-over-experience/10159350002/
Javed Laher, “10 Top Tips for Businesses In A Recession”, February 1, 2023, https://www.forbes.com/sites/forbesbusinessdevelopmentcouncil/2023/02/01/10-top-tips-for-businesses-in-a-recession/?sh=580458a674a5
Annabelle Timsit, “A four-dy workweek pilot was so successful most firms say they won’t go back”, February 21, 2023, https://www.washingtonpost.com/wellness/2023/02/21/four-day-work-week-results-uk/