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By Doug Hall Want to grow faster? Then give yourself some choices. A new study by my team at Eureka! Ranch found that companies with more choices for growth made smarter decisions—and ultimately grew 5.8 times faster—than those with fewer options.
We studied 96 small and medium-size businesses, dividing them into three groups based on the number of fresh ideas they were considering to invigorate marketing programs, attract new customers, tackle untried markets, or create improved services. The companies with the fewest choices saw an average growth rate of 4.5% over three years. Those with the most choices grew, on average, 26%.
Fast growth was just the start. The companies with a wider array of choices also had higher profit margins, and their employees were more optimistic about the future. My guess is that companies that are full of ideas are also more fun to work at—and a ton more fun to own and lead.
Our study reminded me of a consulting project I did for a client that was coming off three disastrous product launches. This particular company was one of my corporate clients, but it's easy to see how small businesses can fall into the same trap. The three products, in three different divisions, had achieved 55%, 72%, and 67% of their budgeted sales objectives. "I don't want names to place blame," the CEO told me. "I just want to know why we're failing so badly."
It turned out that each of the projects' leaders knew that they would fall short before they went ahead. So why didn't any of them speak up? In all three cases, the answer was the same: Each leader explained to me that, at the time, it was the only idea on the table, and going ahead seemed better than not doing anything.
In each case, division managers had followed company protocol and focused all their energy on developing and delivering one thing. Each initiative contained flaws. But because it was the One Idea, it was pushed forward. If there had been other ideas to consider, then another, more promising initiative could have been given the go-ahead. Or with a little time, it's possible that the fatal flaws in these ideas might have been fixed, and the launches might very well have succeeded.
The loss of potential sales was the least of the negative impacts. With three failures, employee morale plummeted and a chain reaction of negativity set in. The CEO reported my findings and implemented some new policies designed to reduce failure rates. Sadly, at the time I did not fully understand the power of simply having more choices for growth.
The result was that instead of thinking up bold ideas, managers focused on short-term tweaks that felt safe. But safe loses when it comes to innovation. In the end, the company was acquired.
The lesson is to push yourself and your team to come up with more. Challenge every member of your team—every week—to come up with one new idea for a new marketing message, product, or service, or simply a new idea for improving company efficiency. Not all the ideas will work. In fact, most won't. But the more choices you have, the smarter decisions you'll make, and the faster your company will grow. Doug Hall is the author of the Jump Start Your Business Brain book series. He's also founder and CEO of Eureka! Ranch.