Where Do We Grow from Here? Growing an Entrepreneurial Business in a Flat Economy

By McMorrow, Colleen | Ivey Business Journal Online, November/December 2011 | Go to article overview

Where Do We Grow from Here? Growing an Entrepreneurial Business in a Flat Economy


McMorrow, Colleen, Ivey Business Journal Online


Building from within isn't necessarily a new approach, but in a flat-growth environment it represents a meaningful growth opportunity for entrepreneurial organizations. Readers of this article will learn what strategies and tactics they can develop and deploy to grow their firm in a meaningful way.

With a mixed bag of economic indicators that reveal no obvious path forward in the current business environment, one might expect Canadian businesses to hunker down, retrench or even retreat. Such action would certainly be a reasonable expectation of leaders of entrepreneurial, emerging companies, who are facing some of the most volatile conditions of recent history. But buoyed by a solid debt structure, low interest rates, a strong Canadian dollar, and a favourable regulatory environment, more and more Canadian companies are seeing the glass as half full. They are looking beyond survival mode to chart a path to the next era of wealth and opportunity. However, growing significantly in a flat-growth environment requires a bold combination of savvy thinking, careful planning and well-thought-out tactics.

In recent months, Ernst & Young has undertaken several surveys and in-depth conversations with business leaders in Canada and around the world. While these examinations reveal a surprising degree of confidence, they also reveal a keen awareness of a shifting focus on where and how growth is pursued. This article explores and discusses the nature of that confidence. It also draws on the research to identify key strategies and tactics that can help propel growth-oriented entrepreneurs to success, despite the volatile environment.

A new paradigm and a new opportunity

First, let's take a closer look at the "state of mind" of business leaders with regards to the current climate. In Ernst and Young's October 2011 Capital Confidence Barometer, published in the Financial Post, a survey of 1,000 global business leaders, more than one-third of Canadian respondents said that they are focused primarily on growth. This compared with just 17 per cent of respondents among their global counterparts. Having weathered the economic storm much better than most Western nations, and in an environment of stable commodity prices, Canadian business leaders are poised to not just grow their own businesses incrementally, but to help shape a whole new paradigm for the way 21st century industry operates.

The rise of a new paradigm is the result of a collapse of many aspects of corporate culture and finance. The collapse is giving way to a whole new era, in which growth will be driven primarily by emerging, smaller organizations, not the large conglomerates that have anchored the economy for decades. We might think of this as the era of the entrepreneurial economy. However, it may be more appropriately referred to as a time of cautious or restrained entrepreneurship. Moreover, it's a paradigm in which Canadian companies are uniquely poised to thrive.

This new kind of entrepreneurship will be built on the rise of an innovative business model characterized by measured, thoughtful, and incremental growth and development, as opposed to tectonic or transformational change. It's a model that calls for nimble, fluid and flexible workforces to replace cumbersome bureaucracies; low-overhead marketing to replace splashy campaigns; creative and non-traditional systems of financing to fuel growth; and risk-taking tempered by more circumspection than we have seen in growth models of the recent past.

Incremental change rather than big splashy launches? Caution rather than risk? That may not sound like the profile we've come to associate with entrepreneurs, but it's exactly this somewhat paradoxical mix of creativity and innovation combined with restraint, regulation and caution that is driving the next phase of Canada's business growth. The culture of prudence that has sometimes led Canada to be seen as an economic lightweight has, in these tough economic times, proven to be our greatest asset. …

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