Wednesday, February 08, 2006
Lessons from Canada's emerging growth companies
I’m just back from a presentation at the National Club in downtown Toronto, where I spoke to a group called Future Leaders on "Lessons from Canada’s Newest Growth Companies." Using information derived from PROFIT Magazine and from my own journalism for the magazine, I analyzed some of the top companies on the PROFIT 100 list of Canada’s Fastest-Growing Companies, and shared a few of their common business strategies and favourite success tactics.
Here are a couple of excerpts, and a few personal comments (in italics).
“These are trying times for entrepreneurs. We’ve had several years of strong economic growth and stock market growth – the usual indicators of prosperity – but a lot of businesses aren't seeing any of it. We’re trying to compete in a world economy with rising energy prices, high commodity prices, a high dollar, and increasing competition from China and other countries for our manufactured goods – and, increasingly, business services.”
(Little did I know that there were several entrepreneurs in the audience who are actually engaged in outsourcing business services to India. I met two of them after my speech. Which serves to remind us that one business’s problem is always another’s opportunity.)
"It takes a lot of confidence to survive in business today. You’ve got to have the optimism of a 10-year-old hockey player, who knows that the game does not always go to the strongest or the swiftest, but to the team that wants to win the most. But wanting to win doesn’t mean trusting to pluck and luck.
"It means working hard, preparing yourself and your team to go out and win. And you do that by fine-tuning the ways you manage your business, transforming your staff into an aligned, effective and close-knit team, elevating your relationships with customers, suppliers and other stakeholders, and constantly looking ahead to see how you and your products and services can add more value.
"These are, of course, truisms. But they are nonetheless true. People who own their own businesses or manage business units have remarkable power at their disposal. Because every business can be improved, every process and policy you have can be rethought, and every business relationship you have can be made stronger….
"What I want to do tonight is share some of the strategies and tactics that have fuelled the success of Canada’s fastest-growing companies….
(I then profiled the top 5 companies on the list, whom I interviewed last year. Then I tried to point out some of the commonalities that unite these diverse businesses.)
First, these companies were all founded on innovation. They present new solutions to their markets, not business as usual. Angiotech jump-started a new line of medical research and a whole new industry. Pethealth broadened the market for a niche product by selling pet insurance through retailers, animal shelters and the Net. Fundtrade offered financial planners a better way to do business. These firms have written the book on innovation – yet they demonstrate how innovation is just as much a product of our imaginations as it is of the high-tech laboratory.
Second, these companies offer real value. Pethealth entered the market charging less than its competitors. Glacier Ventures helps media owners sell out and yet keep a stake in the future growth of the organizations they owned – upside potential that keeps them engaged and performing. Hostopia puts its clients in a new, high-tech business, and lets them keep most of the profits. If your firm wants to deal with growth firms like these, keep in mind that they will be most receptive to suppliers who also put value first.
(Then I offered seven proven success tactics of these companies. Here’s my favorite.)
"No. 6: Successful growth companies communicate all the time. They have to: things move so fast that if they don't keep everyone in the loop, sales, morale and customers all can suffer.
"When PROFIT’s No. 1 company, Hostopia, was facing hard times in September 2000, founder Franc Nemanic called a staff meeting and explained that Hostopia had to sign up 100 new websites a day by the end of the year — a fourfold increase. "A sense of urgency motivates the whole organization," says Nemanic. "We told them where we were and what we had to accomplish to survive. It made them realize we were all going to sink or swim as a team."
Nemanic kept his team paddling by providing a daily report on Hostopia's progress toward its target. "It was a continuous process of communication." He says even non-sales staff adopted the mission, with administrators and programmers focusing their efforts on helping sales. "As long as you have a customer-centric attitude and you're focused on helping other people achieve their goals," says Nemanic, 'everyone will achieve their goal.'"
Also on the program, and speaking (thank goodness) after me, was Manjit Minhas, owner of Minhas Creek, a $40-million-a-year Calgary-based distributor of low-priced beers sold in Manitoba and Saskatchewan. She has been trying for two years to break into the Ontario market. She is headstrong, dynamic and very well spoken. She is 25 years old.
Believe me, you wouldn’t have wanted to speak after her, either.