Central Desktop: “Growing pains” – why business expansion leads to inefficiency

Hot on the heels of a bloody BYOD comes more discomfort, this time in the form of growing pains. This guest article looks at the reason why businesses become inefficient as they grow and how these issues can be avoided, drawing on an paper from 1972 for inspiration – if you’re running a small business or on the verge of creating a start-up this is a definite read!

We live in a start-up culture, where it seems as if everyone is able to have an idea and start a company. Many of these will fail, some will be a success. For those that are a success, they may find that the real challenges are not with that first product launch, but the inevitable growth that success bestows upon them.

The issues that face these companies are nothing new. In July 1972, Larry E. Greiner published Evolution and Revolution as Organizations Grow in the Harvard Business Review (on paper, of all things!). He describes a pattern that would be familiar to entrepreneurs and business owners everywhere – that of evolution, in which the business grows smoothly, followed by revolution, where the business goes through a crisis brought about by its own growth. Solving each crisis brings about another period of evolution. Despite its age, Greiner’s piece remains amazingly relevant, even if the companies of today are working in very different industries and producing very different products.

So what does cause a company to become inefficient as it grows? The first inefficiency falls squarely at the feet of the company founders.

Read the full article and find out more about Greiner and the five reasons why companies become inefficient as they grow over at Central Desktop.

DoNanza: The easy way to establish your expertise using Quora

The 15th April saw my first article published for DoNanza. DoNanza is an online service that helps freelancers find work, providing a range of tools to help them get noticed by potential employers.

“The easy way to establish your expertise using Quora” covers the basics of using Quora to demonstrate your expertise and knowledge across multiple subject areas, and highlights how you can use this effectively in creating your own personal brand – opening up job opportunities.

As well as the website, you can find them on Twitter or on Facebook.

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Still nervous about Social Media… here’s the bottom line

Image taken from Flickr - AMagill

Over the last few years, the perception of Social Media has undergone a dramatic transformation. Long the preserve of the individual, and used solely for social networking amongst friends and family, it is now increasingly being used by business to communicate with their customers. But there are still many businesses that fear social media, who are either nervous about getting involved or that have made a decision to stay away.

This is unfortunate, as Social Media is providing real benefits to business, from sole proprietors to global corporations. These benefits are not just tangible, but also measurable.

Here are two key reasons why you should look to Social Media to help move your business forward.

1. Social Media = Dramatically lower cost-per-lead

Businesses that spend more than 50% of their marketing budget on Inbound marketing activities are spending more than 60% less per lead generated, compared to those that are spending 50% of their budget on outbound marketing. That’s a staggering difference, and shows the cost-effectiveness of using social media, such as blogs, Twitter, Facebook, SEO (Search Engine Optimisation) and PPC (Pay Per Click advertising). Outbound marketing includes direct mail, events and telemarketing.

Let’s look at those numbers. If we invest £25,000 in generating 5000 leads using outbound marketing, we pay £5 per lead. Using the same budget on inbound marketing, in which we would pay £2 per lead, we could expect to generate 12,500 leads (assuming the potential audience is there).

It’s this cost-effectiveness that is pushing marketing spend towards inbound marketing and away from outbound. And if that cost-effectiveness wasn’t enough, the quality of the leads is higher. Inbound marketing engages users, creating warm leads that are more likely to convert. Which brings us on to reason 2.

2. You can generate revenue from Social Media

It’s been a long-held view that Social Media is only really good at generating brand exposure. That’s true, but it’s also a successful route to generating revenue. Of the companies using Facebook, Twitter, LinkedIn or a company blog, approximately 40% have acquired a customer. Dell has been a model for this approach.

After a shaky start, which became known as “Dell Hell”, in which Jeff Jarvis, a prominent blogger, spoke out about the poor customer service he had received, Dell has completely turned things around. They have embraced Social Media as a way of getting closer to its customers, and have used it to drive innovation and sales. In 2009, they generated $6.5 million of sales through their interactions with customers on Twitter alone. Including Facebook into that total brings it up to $9 million (source: Steven Felice, President, Dell SMB).

Sony has also used Twitter as a sales platform, generating £1 million from their Twitter feed directly. They have also used Social Media as an integral part of their Cybershot campaign, which accounted for £12.5 in revenue (source: Nick Sharples, Head of Corporate Communications).

These numbers may be small when compared to the annual sales figures across all retail platforms, but they do show how effective these emerging digital channels can be.

More and more, companies are expected to have a presence in the Social Media space. Consumers have been given a voice, and they are using it. Businesses of all sizes have been given the perfect opportunity to engage with their consumers and build a relationship with them, at a cost that would not have been possible just a few years ago. It requires a different mindset, but those that are able to make the transition are starting realise the benefits; not just in the perception of their brand, but on the bottom line too.

Figures taken from HubSpot’s 2010 ‘State of Inbound Marketing’ report.