The Author of When Growth Stalls on small biz stalls, writing his first book, the economy, (and Blogger!)

We’ve talked about it here before: One of the small business owner’s biggest pain points is “Why aren’t we making more money?” When I ran into an author who writes on that subject at the When Growth Stalls blog, naturally I hung around for a while, soaking up his perspective.

From Wow, he’s got a gorgeous landing page, to blasting through a blog and a book to prepare an interview! Sometimes when you shout about a great find, an interesting opportunity comes up, and today I’m pleased to introduce Steve McKee, author of the blog and the new book, When Growth Stalls: How It Happens, Why You’re Stuck, & What To Do About It.

In the book’s introduction and first chapter, Steve tells the riveting story of his company’s star-kissed rise to prominence, and near-disastrous stall several years ago. Most critical to the stall, and a point we discuss here at Maximum Customer Experience frequently, was the crisis of not knowing their Ideal Customer. Their company’s research, conducted to interest prospective clients,

… reflected real insight into the mistakes growth companies make and the money (either in foregone sales or in marketing inefficiencies) that they leave on the table. But these are not the problems that growing companies are preoccupied with as long as their growth remains strong.

The leaders of the growth companies we were targeting were struggling with [other] things…. Marketing was simply not an acute enough pain point to get their attention.

From his own ad agency’s devastating stall, Steve was inspired to spend several years doing intensive research on the anatomy of a stalled company. He peeks inside many of the Big Boys who’ve gone from great to also-ran to see what’s going on, and backs it up with the results of his studies. Best of all, you can put his insights on how to recover from a stall to work for you right away. (Chapters 11 to 13 alone are worth the price of the book, dear reader.)

Steve’s graciously agreed to answer my most pressing questions, and some of yours, as well. Thanks very much to my friends who took the time to email with their own questions about When Growth Stalls!

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Steve, first off I’d like to thank you for taking the time to talk with us. The blog and the book are both great finds for me and for the readers of Maximum Customer Experience. Your timing couldn’t be better: When you began writing you couldn’t possibly have known it, but here we are in mid-2009 and there’s hardly a company around that hasn’t spent some portion of the last year in a stall. You look like a clairvoyant! How has the economy changed the reception the book’s receiving?

When I started this project I knew it would appeal to a wide variety of companies, as my research showed that about fifty percent of all companies stall over the course of a normal decade. What I couldn’t have known is how abnormal 2009 was going to be—I’ve seen research that suggests sixty percent or more of all companies are going to stall this year alone. That has certainly heightened interest in the book. While I hate the state of the economy, from that perspective I can’t complain.

What was the hardest part of writing the book?

The hardest part was everything I had to do other than write, a sensibility with which I’m sure most authors would agree. There are a great many details that need taking care of, from research to securing reviewers to (increasingly) ensuring the book has a solid online presence (website, blog, social networks, etc.) That said, the economy started to crater just as I was finishing the manuscript, and I was somewhat nervous that some of my examples would be dated on the day of publication. Who would have thought in November that huge companies like GM and Chrysler might not even exist in March? I’m pleased to say that as of March 10 (launch day), all of my case studies were current. Phew.

What gave you the most joy?

As you know I have a full time job running McKee Wallwork Cleveland, so I had to schedule full days offsite to write. I have to say, those days were pure joy. OK, maybe not pure joy, but for the most part I really enjoyed them. No phone calls, no email, no meetings, no interruptions—just pure focus. My wife can tell you that on those evenings I came home with an extra spring in my step. I don’t know if I could write full time, but it sure was a nice change of pace for me.

Market tectonics is the uncontrollable element of stalled growth. We’re all familiar with how the market can play games with our revenues at this point. (Leading question…) Do you think businesses today are giving too much of the blame for their stalls to the big economic picture?

Sure, and it’s perfectly understandable. After all, like plate tectonics, market tectonics affect us all. It’s natural to blame the shaky economic ground when your plaster starts to cracks and ceiling tiles begin to fall. But it’s also dangerous, because my research suggests that it’s the aftershocks which companies really need to watch out for. Most of them have no idea what might be headed their way.

You describe four controllable elements of a stall in the book: lack of consensus, loss of focus, loss of nerve, and inconsistency. Please give us a quick rundown of these concepts.

These are the internal, psychological factors that tend to plague struggling companies. Often they’re lurking within even during good times, but as long as the company is growing they tend to go unnoticed. When growth stalls, however, it often results in management disagreements over strategy, confusion about what the company should do, fear in doing something about it, and sometimes herky-jerky reactions in search of a silver bullet. In many cases companies find themselves struggling with more than one or even all of these factors.

When growth stalls, what needs fixing first: Vision or execution?

The old saying is that if you aim at nothing you’ll hit it, so vision must absolutely come first. But a lot of companies don’t take the time to re-examine their vision and simply try to execute their way out of a stall. That’s fine if your fundamental strategy is solid, but in many cases it’s not. If you’re pursuing a strategy that is off by just a few degrees, over time that can take you pretty far off course.

Graham Strong asks: When a company does stall, is it a signal that they should go back to what they had been doing, or an opportunity to re-position and/or re-invent themselves?

It depends on the company’s circumstances. To continue the earthquake metaphor, if a company’s brand platform is built on a solid foundation, once the shaking stops it will probably be OK. But if the tremor causes (or reveals) cracks in the foundation that need to be addressed, some reconstruction will need to be done. Sometimes it’s a minor touch up, and other times it’s major remodeling. One of the aims I had in writing the book was to help companies gain insight into which was true in their specific case.

Do large companies stall for different reasons than small businesses? [Graham Strong]

I wouldn’t say they stall for different reasons, but they may be more susceptible to different complicating factors. For example, it can be more difficult to achieve and maintain strategic consensus at a larger company, while a smaller, closely-held company might suffer more easily from a loss of nerve. In both cases, however, the internal factors tend to play off one another and can create a type of destructive spiral. That’s what I discuss in chapter 8 of the book, the Vicious Cycle.

Can a company stall even if they are giving the customer everything they need or want? [Graham Strong]

I don’t think any company ever gives the customer everything they need or want. And even if one did, customer desires are continually evolving. There was a time when I was happy with a fifteen-pound laptop with a monochrome monitor and 386 processor. Today the only place you’d find that machine is in the Smithsonian.

Karen Swim asks: One of my own struggles recently has been innovation. I understand the absolute necessity for innovation but am struggling to come up with new approaches and ideas. When everything feels like it has been done, where does a small business turn for new ideas?

They should turn to When Growth Stalls. I say that, of course, with tongue in cheek, but I do offer an approach in the “what to do about it” section on how to brainstorm new approaches. The famous quote from Charles Duell, commissioner of the U.S. Patent Office, is “Everything that can be invented has been invented.” That was in 1899. If nothing else you should let fear motivate you to develop new ideas. If you don’t, your competitors will.

While I know this answer, I realize it is missed by many small business owners – the evidence validating consistency, choosing a market and serving the heck out of it are inarguable but how does a small business truly identify its champions, that sweet spot in the niche of buyers who seem tailor made for your products/services? [Karen Swim]

Not to be cute, but the buyers who seem tailor-made for your products or services are those who have decided for themselves that your products and services are tailor-made for them. In other words, somehow your most loyal customers found you and became loyal; find a way to identify what it is about them that makes them unique and then go find more people like them. Unless you have 100% brand awareness that can always be done.

And here’s a hint: their key characteristics are probably not tied to demographics like age, income or gender. There are usually fascinating attitudinal and perceptual characteristics about groups of people that lead them to choose one brand over another.

Your book’s tone and advice focuses so well on your clients and potential clients, at medium to large sized firms. I bookmarked dozens of pages with ideas I could translate to my business and my clients’ businesses, but we’d appreciate your personal translation.

Alex Fayle asks: How can small business owners and solopreneurs get the most out of your ideas at the blog and in When Growth Stalls?

I actually think the smaller the company the greater the advantage. Small business owners and especially solopreneurs don’t have to push decisions up the chain, seek anyone’s permission, or deal with naysayers (except in their own heads).

True, they may need some outside expertise to give them perspective, as it’s easy to get so close to the business that they can’t see the forest for the trees. But they’re the forest rangers, as it were, and they can decide where to plant new seedlings and where to do controlled burns.

There’s a great story in the book about Vera Wang’s recent branching out from couture to Kohl’s discount department store, discussing whether that brand extension is too extreme. “Whether she is trying to stretch her ‘I’ [Ideal Customer, in Maximum Customer Experience-talk] a little further than the customers are willing to go is something only time will tell,” you write.

I get this question a lot (in fact I recently wrote a post on the subject) and I’d love your take. *Is* it something only time will tell? Or should we folks in the business of helping businesses grow, be able to look into our marketing crystal ball and say with some degree of certainty, “Vera, you’ve done a dumb thing here, and this brand extension is going to bite you in the behind”? How much of a business’ success do you think is up to some unknowable Fate-Factor?

I think Vera Wang might have overstretched her brand’s bounds, which is why I included a disclaimer of sorts on the description. Obviously, much more lies outside a business leader’s control than within it, and that’s a healthy source of humility. Still, there are a number of fundamental principles we can follow to get things mostly right, and as long as external events don’t conspire against us we have a pretty good chance of success. That said, I firmly believe that God rules in the affairs of men. Our job is simply to do our best.

I mentioned in my intro that I was riveted by your own company’s story of stalled growth. You briefly described getting your groove back in that chapter, as well. Still, I waited on the edge of my seat… For me (my only criticism!) the book’s a cliffhanger because you don’t return to the subject of McKee Wallwork Cleveland in depth. So open up for us, if you will. How does the rest of the story go? How did the research, the insights, the incredible amount of reaching out you did to write the book (and the incredible amount of looking inward that caused you to write it), help you find your “I” and get back in growth mode? In other words, what did you learn that you were personally able to apply to getting your company un-stalled?

Well, we actually failed our way to success, if that makes sense. We were somewhat stuck in that destructive cycle and lost a lot of our staff and ultimately a partner in the process.

When we sought the new “third leg” of our three-partner stool, we had learned the importance of all of these principles, particularly the vital need for consensus. So strategic alignment became a key criterion of the search, and we found a terrific new partner with whom we were more naturally in synch. That enabled us to begin to find our focus, have the nerve to execute it, and start down a path of consistency. In many ways this book project is a natural outgrowth of that. I’m pleased to say that we’ve had four very good years since we started on our way back up. Still, we’re taking nothing for granted.

If you had it to write again, would you change anything about When Growth Stalls?

Not really. I would have like to have seen it released three or four months earlier, just as the economic crisis was hitting and before a number of other titles hit the market. But considering that when we embarked on this project we had no way of knowing the market conditions in which it would be launched, the timing was pretty good.

Please share a little of what you’re doing now at McKee Wallwork Cleveland. Has the book changed the company in any way?

The principles that animate the book are put to constant test here at MWC. We often look at ourselves as we’re considering how to respond to current events in terms of how we’re doing at maintaining strategic consensus, keeping our focus, stepping out with courage, and being consistent. In that sense it’s been a great guide and governor for our behavior.

For example, we just wrestled with a big decision whether or not to invest in innovation by launching a new division. The timing isn’t exactly ideal in an economic sense, but it is from a competitive perspective. We studied and debated it quite a bit, but ultimately came to the consensus that we needed to do it. So we did it.

Last, so many of my readers are also bloggers, we want to know: What’s the future for the blog? How long do you see yourself writing it, and what’s your focus going forward? And for my readers who are vocal fans of user-friendly blogs, I have to ask: Why Blogger—and how soon can we get you to over to WordPress, Steve?

I started the blog as an outlet to provide continuing commentary on decisions companies that are stalled (or may become stalled) are making. There’s certainly no lack of raw material these days. It’s a terrific way to stay in touch with people who like to follow the topic, as well as keep my senses sharp. I think it may play a role in the next book, assuming there is one.

As for blogging platforms, I’m afraid I wouldn’t know my WordPress from my Blogger. Hey, you have to delegate some things.  

Steve, thanks once again for your insights. I loved picking your brain today.

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Dear reader, Steve’s promised to hang out with us in the comments if we’ve got even more questions for him, so please ask the tough ones now. It would be great to have you peppering Steve with questions from the Maximum Customer Experience perspective!

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Grow and be well,

Kelly Erickson