Growing Your Company the New-Fashioned Way

//February 10, 2006//

Growing Your Company the New-Fashioned Way

//February 10, 2006//

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The NJBIZ Interview-Gene SlowinskiGene Slowinski is the 53-year-old director of strategic alliance research at Rutgers University’s Graduate School of Management. He’s also the managing partner of the Alliance Management Group, a Gladstone-based consulting firm. Last year Slowinski published a book titled “Reinventing Corporate Growth.” NJBIZ staff writer Martin C. Daks spoke with him about new ways that small and medium-sized business can grow.

NJBIZ: Your book notes traditionally, businesses grow by increasing their products or services, or by acquiring other companies. You say a third way, transformational growth, enables companies to grow through alliances. Do your principles apply to smaller businesses too?

Slowinski: Absolutely. If you take a look at the partners of the large companies I describe, you’ll see they’re small and medium-sized businesses. All the stuff I write about applies to everybody.

NJBIZ: Partnering lets a company build its business without making an expensive, ground-up investment?

Slowinski: Yes. And another point is that if you want to partner with other good companies, you’ve got to be the best in your class. Otherwise other people won’t be interested in you.

NJBIZ: Is there a downside to taking on partners?

Slowinski: If there are fundamental weaknesses in one of the businesses, then partnering won’t fix them. It’s wonderful if a company has solid operations and is looking for a complementary business that will help both to expand. But it’s not a way to fix a troubled company.

NJBIZ: What should an owner look at before trying to set up a partnership?

Slowinski: You have to take inventory of your strengths and weaknesses, because a partnership will put a spotlight on them and exacerbate any problems.

NJBIZ: You’ve also suggested that companies should break down walls they’ve built up internally. What are some of the challenges to doing that?

Slowinski: One of the biggest is breaking down the walls that people have built up in their heads. We have trained people to think inside, in an insular way. We have not given them permission to look outside their company to identify sources that will allow them to grow.

NJBIZ: How can a smaller business go about breaking down those walls?

Slowinski: I think the best thing to do is to have a staff meeting where you discuss concepts and ask what they mean for your company. People inside your own organization know what they need to succeed, but they’re never encouraged to talk about how to find the resources they need. When the CEO sits down and encourages a discussion like this, he or she takes monster steps in growing the corporation.

NJBIZ: Who should be sitting in on these discussions?

Slowinski: Senior management. I would make sure that the CEO leads the discussion, with direct reports there too. And it’s not a one-time kind of approach. The talks should be held periodically, and functional managers should take the discussion back to their ground troops and see what they think the company needs, then bring that knowledge back to the next meeting.

NJBIZ: You’ve noted that some companies, like Kodak, have a successful past that can keep them from moving forward.

Slowinski: Sometimes a company can have a hard time breaking away from a successful history. For a long time, Kodak experimented with digital but kept coming back to what it knew best: silver halide film. It finally did commit to digital, though, and is doing better financially.

NJBIZ: If you were to point out one mistake that managers often make, what would it be?

Slowinski: When they think that tomorrow will look like yesterday.

NJBIZ: Where should small to medium-sized businesses be looking to identify coming challenges?

Slowinski: Remember that conference-room discussion? They should always be thinking about the next big thing that can happen in their industry. Some of them, like the Internet, are so powerful that they transform everything. But many are specific to an industry or a product line.

NJBIZ: Your suggest having a full-time “external research director.” What if the firm can’t afford that?

Slowinski: That is a luxury of a larger company. But a smaller company can get around that by asking everyone in the organization to be their own external research director. First, ask what assets the company needs to succeed, then determine if it’s more cost effective to make them internally or to just buy them. If that’s too expensive, then look for a partner that can supply them.

NJBIZ: Your book deals with discovering what the organization wants and needs, and fulfilling those wants and needs. You say this process often means looking beyond the company itself.

Slowinski: If a company wants to make its market offering more attractive, it shouldn’t just look at the needs of the primary customer base. The key is to be willing to look externally for answers.