When the great minds finally settle on what caused this recession, it’s fairly certain they’ll agree on one thing: The economy — and the companies operating within it — expanded too fast, in too many directions and without any mechanisms to maintain control.
In other words, it was harmed by wild, unchecked growth.
If there’s a lesson to be had, it’s that a lack of discipline will kill you. Period.
This month’s cover story subject, Ellis Yan, founder and CEO of Aurora-based Technical Consumer Products Inc., has remained true to this basic tenet of business. Driven by increasing demand for TCP’s energy-efficient compact fluorescent lamps, sales have skyrocketed from annual revenue of $71 million in 2003 to more than $300 million today.
Despite this, Yan was quick to recognize the danger that accompanies such expansion, and he was even faster to credit it as being just as important as the initial innovation that led to the company’s creation.
“You must control the growth,” Yan explains. “Because when you control the growth, you also pull back your wildness.”
Controlling growth is critical. Too often over the past decade, we forgot this and instead focused on driving increased sales and identifying new markets at a breakneck pace. With success after success piling up, it was easy to overlook the need to maintain a disciplined approach.
But growth always comes with a price. This means remembering to build out your infrastructure but not too fast that you can’t rein it back in when sales slow. It means re-evaluating your cash flow so you don’t face a crunch and can’t pay vendors, suppliers and employees on time. And it means developing scalable systems that allow you to deliver your products or services without sacrificing quality or over-burdening employees.
If all this sounds familiar, it’s probably because your company is going through these exercises right now — but in the opposite direction.
Running a disciplined company is akin to a major league pitcher controlling the tempo — and outcome — of a ballgame. You may have an overpowering fastball and pinpoint control, but both are worthless if not complemented by an occasional curveball, slider or off-speed pitch.
And just like in baseball, when a hitter can’t sit on one pitch, the pitcher keeps control of the game. In doing so, he increases the odds of winning.
