Consulting to Growth Companies
This article will focus on consulting to growth companies. It will provide an overview of the role that consultants play in growth companies, a description of global growth companies, and approaches to identifying and ranking growth companies. In addition, the strategies that companies use to promote growth, performance, and innovation and the issues associated with human capital in growth companies will be addressed and analyzed. This article will be of particular use and interest to consultants to growth companies. As this article will explain, consultants, with domain expertise and suggestions for optimization of a company's strategic assets, are vital to the success of growth companies.
Keywords Consultants; Global Growth Companies; Growth Companies; Human Capital; Innovation; Performance; Strategic Assets
Management: Consulting to Growth Companies
Growth companies are those companies whose rate of growth significantly exceeds that of the average in its field or the overall rate of economic growth. Growth companies, which increase at significantly faster rates than the overall economy, differ from mature companies that have stable earnings and little to no growth. Growth companies are classified into high, moderate, and low growth companies. High growth companies refer to companies that grow at an average rate greater than 20 percent per year for at least four or five years in a row. Growth companies tend to reinvest their earnings back into the company to expand the business and promote increased growth and performance.
The stakeholders of growth companies, including mangers, investors, consultants, and the public, are influenced by the performance of growth companies. Managers seek out these companies for the profit and challenge. Investors seek out these companies for the higher than normal return on investment dollars. Consultants seek out growth companies for the abundant work and opportunity they provide. The public seeks out growth companies as an expanding source of employment. Growth companies are characterized by the leadership position that they claim in an expanding product or market area. Growth companies, common in the technology industries, tend to develop, promote, and capitalize in new and technologically-focused goods or services (Kotter & Sathe, 1978).
Growth companies, characterized as learning organizations, make use of consultants to guide choices, build structures, develop goals, and allocate resources that promote growth. The following sections provide an overview of the role that consultants play in growth companies, a description of global growth companies, and approaches to identifying and ranking growth companies. These sections serve as a foundation for later discussion of the strategies that companies use to promote growth and the issues associated with human capital in growth companies. This article will be of particular use and interest to consultants to growth companies. As this article will explain, consultants, with domain expertise and suggestions for improvement and optimization, are vital to the success of growth companies.
Consulting to Growth Companies
Consultants refer to professionals who perform specific services for a fee. Consultants work in numerous fields including human resources, investment, financing, production, research and design, marketing, shipping and distribution, forecasting, safety, risk management, and regulatory oversight. Consultants may or may not be licensed depending on their field. Consultants in the legal and accounting fields must be licensed while the fields of computer programming, business strategy, and marketing have no licensing requirements for consultants. Consultants can help traditional companies achieve growth. Consultants to growth companies may assist in the preparation of a business plan, raising capital, conducting market research, or advising in the development of a company's product, manufacturing process, or marketing strategy. Consultants help companies develop the following strategies that promote substantial, long-term growth (Zielasko, 2006):
- Sense of purpose: Companies must have a purpose and a mission outside of profits. The purpose can be product, service, or market related. The sense of purpose will unite employees and create increased loyalty and efficiency.
- Market intelligence: Companies must move beyond internal focus and analyze market trends and how their company can capitalize on the market.
- Customer-driven processes: Companies must concentrate their efforts in developing and implementing customer-driven processes that put the customers' needs first.
- Smart technology: Companies must develop smart and interconnected tools.
- Seeing the future: Companies must develop forecasting tools.
- Finding and keeping the best and the brightest people: Companies must seek out and work to keep industry talent.
Consultants to growth companies generally work on a contract basis and do not earn fringe benefits. Consultants to growth companies generally sign consulting agreements which refer to contracts between companies and advisors who are not their employees. The contracts cover the scope of the consultant's obligations, understandings as to who owns his work product, the limitations on his authority, and the company's fee payment obligations. The following issues are described or addressed to varying degrees in every consulting agreement (Hanson, 2004):
- Scope of Work: The consulting agreement must specifically state what services the consultant will provide. The time given for the consultant to perform the services must also be explicitly stated.
- Compensation: The consulting agreement must specifically state the compensation that will be for paid to the consultant for the provided services. Examples include flat fees, salary, expenses, bonuses, and company shares.
- Independent Contractor Status: The consulting agreement must indicate the contractor's independent contractor rather than full-time employee status. This distinction is a requirement of tax reporting law.
- Term and Termination: The consulting agreement must specifically state the term of the contract in months or years. The client and the consultant may also choose to add specific details and requirements for termination of the contract by either party. Common criteria for termination of consulting agreements include breach of contract and illegal activities.
- Rights and Data: The consulting agreement must specifically address the allowable and legal uses of the consultant's work produced while under contract. The consulting agreement should, if relevant, specify copyrights and ownership rights of work or products.
- Conflict of Interest: The consulting agreement often includes a non-competition clause for, at least, the length of the contract. This clause prohibits the consultant, while under contract, from doing similar work that would compete with the client for business or market share.
- Non-Solicitation: The consulting agreement usually includes a non-solicitation clause which forbids the consultant, while under contract, from soliciting the client's employees.
Consultants, as described above, participate in similar ways in growth companies across businesses and industries. Consultants to growth companies help companies learn to be flexible, handle change, work as a team, and work at a high level of efficiency and performance despite risk and uncertainty.
Global Growth Companies
The potential for growth across businesses, industries, and markets is increased by the emergence of new economic markets and transnational companies. New business opportunities abound in the new global marketplace for emerging and established corporations. The World Economic Forum, an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas, tracks global growth companies. Economic globalization and related practices are changing business practices worldwide. The World Economic Forum developed the Community of Global Growth Companies as a resource to support emerging businesses as they navigate the challenges of new geographies, markets, cultures and regulatory systems. The World Economic Forum hopes to support and align with companies that will become future industry leaders.
Global growth companies, as defined by the World Economic Forum, are businesses that have demonstrated a clear...
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