The 6 must-haves for sustained business growth

27 October 2021

Finding the strategies to generate sustainable business growth is hard. Become more customer-centric? Focus on cash flow? Create a long-term plan? All of these, and more?

Allianz Trade monitors the finances of over 80 million companies globally, giving its team unique insight into what leads to sustainable growth. Three experts from Allianz Trade UK & Ireland, David Smith, head of risk information, Simon Etherington, assistant head of risk underwriting/technical manager and Ope Farinloye, senior risk underwriter, discuss the most important must-haves for sustained business growth.

It's an appropriate time to debate this topic, with many UK businesses contemplating strategy for 2022, and trying to create sustainable growth in what they hope to be the post-COVID era.

Our experts feel that businesses that grow year-on-year over the long term are operationally strong. And while a genius CEO may achieve extraordinary growth in a company’s early stages, maintaining momentum is usually about execution and organisation.

The 6 must-haves:


#6 and #5 (equal)

Talented staff in key positions and

Understanding the market

Our experts see talented staff as the foundation of a strong organisation. David Smith says that the skill level within a company often becomes clear if Allianz Trade arranges a face-to-face meeting as part of the assessment process for trade credit insurance.
He says talented staff have good answers and data at their fingertips, and notes: “It is invariably reflected in their numbers and their performance as well.”

One challenge is that sustainable growth requires an evolution of skills as the business matures. Simon Etherington says that talent must be combined with flexibility: “People have to be open to change.”

Understanding the market means much more than just knowing what customers want today. Simon says a business aiming for sustained growth must also understand what customers will want tomorrow. "If you understand the market, you can anticipate what people need and can adapt more quickly to the changes that will impact your business going forward," he said.

#4 Excellent customer service

The importance of excellent customer service in growing a business may seem obvious. But amid the disruption of the last 18 months, delivering it has been a challenge for many firms.

The key, again, is organisation — the ability to fix things when they go wrong. For example, the CSI study into customer service in the UK in July 2021, showed rising consumer satisfaction across a wide range of businesses, despite consumers reporting increasing problems with goods and services. Why? Because of record satisfaction with how complaints are handled.

Ope Farinloye observes that companies that grow sustainably often achieve excellent customer service as a by-product of culture. He says: "If employees believe what they're offering is excellent, they will provide excellent customer service — and they will also have the passion to sell that product."

#3 Clear vision

There’s no shortage of advice to senior managers about the importance of vision; Amazon UK currently lists 8,000 business books with “vision” in the title.

Simon says many businesses have had to think hard about their vision since the start of 2020. “I think the pandemic has given businesses the opportunity to focus on what their key priorities are. And I think a lot of it is about future-proofing for not just 12 months, but for a much longer period.”

For example, retailers have had to decide whether to invest in a more digital business model, which may require significant changes in workflow or even staff, or whether their vision is to thrive by improving their in-person experience. These are very different visions of future growth, and Simon says clarity is essential.

David adds that once the vision is set, it is vital to ensure it is shared. He says: "When my analysts go and visit companies, they can quickly pick up how succinctly a business can encapsulate their strategy and how well they know their unique selling point."

#2 Adaptability

Many businesses have surprised themselves in the last 18 months over how quickly they can adapt. These include a consortium of Ford, Airbus, Formula 1 engineering firm McLaren and others, that produced nearly 14,000 ventilators for the NHS in three months.

But it shouldn’t take the tragedy of a pandemic to make firms adaptable. Management consultants McKinsey, said in an August article that adaptability is like a muscle, which can be trained and made stronger with use: “This is not a natural skill — even for the most successful among us — but it can be nurtured.”

As businesses mature, there is a belief that they become less adaptable. So, what's the secret to remaining flexible as size increases? Ope says one is "honest self-appraisal", the ability to look at processes, staff and other aspects of the business, realise what's not working, and make changes.

Allianz Trade economists expect an upswing in insolvencies in 2022: adaptability is vital if you don't want your business to be one of them.

#1 Operational excellence

Many of the biggest names in business worldwide achieved fame through their grand vision; the execution was something they left to others. But our experts were united in saying that operational excellence was the key to long-term growth.

While a disorganised company with an in-demand product can enjoy a growth spurt, sustainable growth comes from an efficient supply chain, delighted customers, motivated staff, and other benefits of discipline and operational excellence.

A key element to this is well-organised cash management: chasing unpaid invoices efficiently, paying suppliers on time, and the other hard work needed to manage cash flow.

David said: “You may have a really good idea, and a great plan to grow your business, but if you can't get the raw materials because you’re not paying your suppliers, then you're not going to grow in the way you planned.”

Operational excellence is the result of vision and talented staff, #3 and #6 on this list. It also drives outcomes such as market understanding, excellent customer services, and adaptability.

The good news is that organisational excellence can be created, even in companies where it is entirely lacking. The team has witnessed it in companies they have covered over the years. For instance, a founder might realise that their company is stalling and bring in staff with operational excellence experience, such as a new CFO, to recapture growth.

Finances and flexibility

Other factors that didn’t make the top six, but were still seen as important by our experts, included financial details - such as level of debt, profitability and reinvestment of profits back into the business.

David says businesses showing sustainable growth come in many financial shapes and sizes, and Allianz Trade takes a pragmatic approach when assessing companies for trade credit insurance. He believes that as long as businesses have professional financial controls and do not repeatedly bump against covenants, they can grow sustainably - even modest businesses in unglamorous sectors of the economy. The Allianz Trade UK & Ireland team encounters many such companies every month that enjoy robust and sustainable growth.

David says: “You don’t have to be a household name to be able to demonstrate sustainable growth, provided you’ve got the vision, the strategy, the product, and the ambition.”

The experts saw cash management as a cornerstone of long-term growth. Could your businesses withstand the impact of a major customer failing to pay? Trade credit insurance from Allianz Trade can ensure your growth plans stay on track.

Learn more about trade credit insurance.