This article is the third in our series on “Strategic Leadership,” where we explore the qualities of effective business leaders and how to hone our own leadership skills.
In a business culture dominated by the mantra “Fail fast, fail often,” we spend a lot of time extolling the virtues of companies for doing things fast—for being fastest to market, quickest to respond, most agile to pivot—but we often don’t sing the praises of businesses that know how to take things slow.
It sounds antithetical to suggest so, but oftentimes what businesses need to in order to speed growth is to do exactly the opposite: slow down.
That doesn’t mean shortening workweeks or allowing employees to slack off. Rather, being slow is a function of strategy—it’s the deliberate and steady plodding of the tortoise versus the haphazard bouncing of the hare.
A study of 343 businesses in Harvard Business Review found that companies that chose to “go, go, go” without thinking through their business strategy ended up with lower sales and operating profits than those that “paused at key moments to make sure they were on the right track.” Companies that took this slow and deliberate strategic approach ended up averaging 40% higher sales and 52% higher operating profits.
So what does the “slow business” approach entail? Here’s how it manifests in leadership, management, and growth:
Make slow decisions
A good business leader must be decisive—but not too quickly decisive, say Chip and Dan Heath, authors of the book Decisive: How to Make Better Choices in Life and Work. Most leaders fall into the trap of getting locked into one alternative, without slowing down and thinking through additional options.
For example, should you fire the underperforming employee? By making it a yes/no question, business leaders can convince themselves there’s only one choice. But there are other alternatives to explore that may be more practical or less costly: moving the employee to another role, offering training or mentorship, etc.
Slow decision making means taking the time to gather all the facts, consider all the options, and then following through with a well-formed action plan.
Although studies show that quick decision-makers may be more confident in their snap judgments, those that admit “I don’t know” upfront and take the time to make a thoughtful decision often outperform their quicker counterparts. In essence, slow deciders make better strategists.
Take time to communicate and align your team
Many entrepreneurs overseeing a transition from startup to scale-up often run into problems of strategic alignment. As leaders, they often make decisions from the gut, or do quick calculations in their head, and without much explanation, they hand down directives to the managers and employees for execution.
For a while, this system of communication works. In a startup phase, a company is often agile enough to quickly adapt to new directives and strategy changes coming from management, and this can even play a big role in the success of a startup.
In our experience working with growing companies of all sizes, however, this only works up to a certain point. Once a company has hit the $2 million revenue mark and is looking at the next stage of growth, this leadership style becomes less and less sustainable.
As business leaders look to expand their teams and hit ambitious growth goals, company alignment becomes increasingly important. Not only must the CEO set the overall business strategy for the year, it is also crucial that this plan be clearly communicated to management for execution.
Business leaders that slow down and thoughtfully walk their management team through a strategic plan often find more success in the long run. These are the companies that have taken the time to bring the departments together, articulate key priorities and goals, unpack the reasoning behind decisions made, listen to feedback and suggestions, and get everyone in alignment with the plan.
In short, businesses are far more efficient when everyone is on the same page. As a leader, take the time to get your whole team on board.
Build strategic pauses into your growth plan
In scale-up businesses, the pressure for constant growth—particularly following a boom period of fast expansion—can force business leaders into a “go go go” mentality that leaves little room for careful reflection and planning. Instead the tendency is to push newer and bigger: new markets, new products, bigger teams, bigger inventory.
Over a long period, this can backfire. Operational issues that were manageable with a smaller team become amplified at a larger scale—consider this famous case study of Webvan from the 2000 dot-com crash. Perhaps the company didn’t account for competition in new markets (consider Uber’s difficulties breaking into the Asian market). Or perhaps the business expanded locations without a proper inventory management plan (a problem H&M is currently suffering).
Smart companies that want to see consistent growth over the long term will cautiously avoid the “grow big fast” mentality and instead build in strategic pauses into their business plan. Instead of pushing forth with an aggressive growth strategy after a period of expansion, it’s okay to set the cruise control for a period of time and give yourself some breathing room before starting your next growth phase.
Business leaders should use these pauses to focus on strategy refinement and iteration across the company. Working together with the management and finance teams, companies should identify its current strengths, understand and fix any potential problems and issues, evaluate various opportunities for growth, and forecast any threats in current and potential markets.
Critically important is also to build in time to listen to customer and employee feedback: Does your company know who its most important customers are? Are your employees aligned with the company’s mission and goals?
By deliberately slowing down and taking the time to reflect, think, plan, focus, and refine, businesses can avoid the pitfalls of moving too fast and enjoy long-term sustainable growth.