Written by Stella H. Kim
Published June 20, 2024
Invest in Continuous Growth even at Maturity Phase of Business Life Cycles
Since the pandemic, the creation and entry of new global businesses have escalated. According to the U.S. Census Bureau, 5,481,437 new businesses were started in 2023. Over 305 million start-ups are also created across the world annually, with the number increasing each year.
Businesses now find it incredibly difficult to establish themselves in the global market and stay relevant in the constantly evolving market. Organizations face the challenges of competing against mainstream industry leaders while trying to develop differentiated services and products that generate adequate profit. As such, many companies falter every year to simply survive in the current market landscape.
According to recent data from the U.S. Bureau of Labor Statistics, 20.8% of new businesses fail within the first year, 49.9% fail within 5 years, 65.8% in 10 years, and 73.3% in 15 years. Within 20 years, 80% of businesses typically shut down their operations.
In that case, how are industry leaders thriving over 25 and beyond 50 years, while still managing to lead with continuous growth? What are their investment strategies to remain successful in this market?
The key is to analyze and learn from their transformative growth processes. The Business Life Cycle mainly consists of 4 phases: Startup, Growth, Maturity, and Decline.
In the Startup phase, organizations enter the market carefully by determining which business, product, and service they should provide for consumers. However, research shows that only 15.8% of businesses manage to transition from the Startup stage to the Growth stage within the first year. In other words, it is imperative to build a strategic business model, create long-term client partnerships, and continuously attract and retain talent in the initial Startup phase.
In the next Growth phase, otherwise known as the Expansion phase, companies increase their brand awareness and revenue. Organizations must take on new challenges and responsibilities, evaluate their goals and progress, and understand the current economy to carefully analyze market demands. Those who make bold investments in hot skills, bring on critical leaders, and pursue new business partnerships are able to effectively progress to the Maturity phase.
In the Maturity phase, companies reach a state of sustainability and stability. They lead the market with significant brand recognition with their products or services widely accepted around the market while retaining not only critical talents but also loyal customers and clientele. However, the majority of organizations slowly begin to experience declining growth once they become complacent with their competitive edge. Organizations must continuously differentiate their investments to drive growth by enhancing their product and service portfolios to remain relevant and enter new geographical markets with effective glocalization efforts. Those that fail to do so soon close down once they face turnover, a decline in revenue, and impaired brand reputation. Companies in the final Decline phase must then evaluate and carefully decide on proper exit strategies.
In other words, organizations can only survive, succeed, and continuously grow beyond 25 and 50 years by investing in ongoing learning and development in today’s rapidly evolving market.
HRCap, a Top 10 Global Executive Search & HR Consulting firm founded as the first Korean-American search firm in 2000, recently celebrated 24 years of growth and achievements. Throughout the past 24 years, we have reached the Maturity phase by continuously turning risks into opportunities, expanding into new markets, upgrading services, and transforming with innovation. As we gear up for our 25th and 50th year anniversary, HRCap is committed to humbly investing in continuous growth to co-create with our global candidate base and 1500 VIP client partners to lead and futureproof the global HR industry.
Stella H. Kim, SPHR
HRCap – SVP, Head of Americas & Chief Marketing Officer