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Hyper growth – what it is, what it takes

26. oktober 2015

Hyper growth is a term we rarely use in our Norwegian language, but an ambition shared by all the entrepreneurs in San Francisco. Does this mean we are aiming too low? At least it indicates great cultural differences between the US and Norway – says Julie Hanna, recently appointed President Obama’s Global Entrepreneurship Ambassador to help develop the next generation of entrepreneurs, in a meeting with Innovation Norway.

By Special Adviser Astrid Langeland, Innovation Norway

If you google «hyper vekst» in Norwegian, you will get hits on anabolic steroids. The response to the English term «hyper growth» gives both manuals for how to deal with hyper growth, a number of specialized consultancy firms and a UK government program for high growth businesses.

The mindset for High Growth

The mindset for High Growth
Illustration: http://www.ga.businessgrowthservice.greatbusiness.gov.uk/

Hyper growth means extremely rapid growth, and businesses that grow at this rate are said to experience a radical expansion. Companies in this category are, among others, Facebook, Google, Dropbox and Twitter.

Dream big

Julie Hannas advice to entrepreneurs is to dream big and have a huge customer base as a goal. However, they have to start on a small scale and make sure they have a solid ongoing operating organization before they start the hyper scaling.

In San Francisco ideas are as abundant as commodities. It is the ability to execute that is the scarce factor.

The GrowthAccelerator program

The UK government has established the GrowthAccelerator program as a service provided by the country’s leading business growth specialists. The program is known for delivering uniquely tailored advice to high-flying businesses. It’s a partnership between private enterprises and the government.

The service is now supporting over 15.000 businesses in achieving their growth ambitions. It is well documented that high growth businesses contribute a disproportionate amount to economic growth and it is for this very reason that there is such an interest in them. It is estimated that around 6 percent of the UK business population are high growth businesses.

The OECD definition of high growth is a business which achieves annual growth rates in turnover or number of employees of over 20 percent for three consecutive years.

Hyper growth businesses, on the other hand are much rarer, but their potential value to the UK economy is vast. A hyper growth business grows at a remarkable rate, far beyond what is commonly considered high growth. This rate of growth is not normal, which is what makes those businesses achieving it so interesting.

The Hyper Growth Insights Study

An in-depth study of elite business performance of 25 businesses participating in the GrowthAccelerator program 2014 shows:

  • These 25 businesses have added £25,5 million in GVA and created 453 jobs in just one year. Rapid business growth can come from any location or sector.
  • Hyper Growth is not accidental. The leaders of the businesses studied had a clear line of ambition which translated into growth. It is the ambition and focus of the people involved that drives success.
  • Hyper Growth businesses are agile and creative in achieving growth. Whether accessing finance, entering new markets or developing products and services. Hyper Growth leadership teams focus on ‘getting it done’ – they understand what actions they need to take to achieve growth and then find the most efficient way to get there.
  • The majority of Hyper Growth businesses have very high opportunity alertness but they take a very measured, calculated approach to creating and seeking opportunities. This is an active and continual process that needs to adapt and grow with the business.

Where do opportunities for hyper growth come from?

  • New markets 56%
  • Existing customers 20%
  • Expansion 16%
  • Marketing 16%
  • Partnerships 16%

Key findings on the attitude and approach of leaders from exceptionally high performing businesses:

  1. Hyper Growth businesses set ambitious targets for growth
  2. Hyper Growth leaders have a positive attitude to taking on board advice
  3. Hyper Growth businesses take a measured approach to pursuing relevant opportunities but like to be quick off the mark
  4. Recruitment and retention are seen as the most important challenges facing Hyper Growth businesses
  5. Hyper Growth leaders rate the effectiveness of their strategies to motivate and inspire as strong but are much less confident about their strategies for personal development and talent acquisition
  6. Hyper Growth leaders are typically goal-orientated, demanding and competitive – they motivate and inspire their people
  7. Hyper Growth leaders demonstrate an ability to compromise and collaborate
  8. Hyper Growth leaders are more confident in entering new markets than the average SME
  9. Hyper Growth leaders are more confident about introducing innovation than average SMEs and find creative ways to get their products and services quickly to market
  10. Hyper Growth leaders are more confident in their ability to fund growth than average SMEs
  11. Hyper Growth businesses have been funded by a wide range of sources, the most common of which were personal resources, reinvestment of profits and bank lending
  12. Hyper Growth leaders are comfortable taking calculated risks and regularly do so
  13. Having started the business, the bravest decision Hyper Growth leaders say they’ve made relate to the people they employ
  14. When mistakes are made, Hyper Growth leaders take positive action
  15. Hyper Growth businesses find opportunity in difficult economic climates

Policy implications

The study seeks to provide new evidence, raise new questions and assess the implications for policy and action to stimulate and support business growth.

By looking at the characteristics, culture, nature and approach of the businesses and in particular the leaders who have presided over this period of exceptional growth, the report contributes to the high growth debate.

Growth businesses in Norway

In Norway 723 businesses had high growth in 2013. That is less than one percent of all enterprises, but 3.6 percent of those with ten employees or more.

It is a goal for Innovation Norway to support more businesses with ambitions and ability to grow. Companies with high growth potential are given a targeted offer including both risk reduction in the form of financing, but also increased competence and access to new markets and networks through our international offices.

TINC is a four-week intensive tech incubator program held in Silicon Valley and Singapore by Innovation Norway. The goal is to provide technology startups crucial knowledge and experience to achieve higher growth faster and with less risk.

Julie Hanna is an entrepreneur, angel investor and board director. She serves as Executive Chair of the Board of Kiva, peer-to-peer lending pioneer and the world’s largest crowd lending marketplace for global entrepreneurs.

She is adviser to technology incubator Idealab and Innovation Norway.

In May 2015, President Barack Obama named Hanna Presidential Ambassador for Global Entrepreneurship to help develop the next generation of entrepreneurs.

In the past she has been a founding executive of five Silicon Valley technology companies and served as director of strategic technologies at Lotus Development Corporation.

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