The perils of not investing in a low growth year

“We are budgeting for the year to be flat...”, the CEO of one of the region’s multi-billion dollar family businesses said with a big smile as he answered, “What are you planning for in 2016?”

His smile and the look in his eye were contradictory to the words that he spoke. “Why are you smiling when speaking of flat growth for 2016?” I asked him curiously. With just the two of us in his office talking about his plans for growth, he proceeded to the white board and shared two truths that should guide every business through this year.

First, you have to view 2016 in the context of the coming years and not as a solo year by itself. If you think of 2016 in isolation of the the coming years (2017-19), its for sure you’ll make future bad choices to maximise this year’s returns.

Decisions such as a lack of investment, passive attitude and potential re-scaling will cripple your growth potential when market fundamentals return and as your competitors who take a long term view will prevail.

For the region as a whole, and Dubai specifically, it’s generally agreed that growth will pick up and the market will find a sure footing in the coming years. For Dubai, we are a year away from the build up to the Expo 2020 kicking in... so don’t sit idly on the sidelines this year. Sitting back will make it much harder for you to catch up with those who pursue a market share growth strategy in 2016, which was the CEO’s second point.

“While others are worried about their year-on-year growth prospects, we are singularly focused on gaining market share,” he said.

This bold action was very refreshing to hear. He gave his employees the confidence to make decisions that are truly growth related.

I’m exhausted from the dinner conversations with people speculating and spreading rumors about how bad the market is. Frankly its not as bad as the journalists are reporting out of context of reality.

I spend my days working one-on-one with CEOs, so I hear first hand how businesses are really performing and what their plans are. Then over dinner I cringe when people spread gloom and doom stories about the very company where I was during the day. They swear they have evidence, but can’t produce it.

We need a dose of confidence to give comfort for businesses to act on their ambition and pursue growth – either year-on-year or via market share. Hearing the positive approach CEOs are taking should give each of us assurance to keep growing.

By the way, the advice to view 2016 in the context of coming years’ growth and to pursue a market share growth strategy isn’t an isolated insight. The very week that the above example took place, three other CEOs told me they too are pursuing a market share growth. This year may prove to be a very competitive one.

Accepting that you may not have the same year-to-year growth as experienced in the past isn’t a sign of defeat. Instead allow it to free you to focus on gaining market share so that you’re better prepared to grow from a larger base in coming years. The advice you should be following is to gain as much market share as you can this year.

This plan illustrates one of the points from my latest book ‘Leadership Dubai Style’ – grow as much as you can while you can and then pursue growth again. The leadership’s habit to be brave is essential if you want to maximise growth. It’s one of the reasons why Dubai has grown against the odds and it can be a reason why you’re able realise similar growth.

Being able to outgrow the market requires courage and the willingness to do what others aren’t. Are you going to do what most will this year – take a wait and see approach? Or will you pursue growth and grow against the odds?

— The writer is a CEO Coach and author, including of his latest ‘Leadership Dubai Style’. Contact him at tsw@tommyweir.com