ATD Blog

Growing Talent Development Firms: Pathways to Growth

Monday, January 9, 2017

As I was recently reviewing nearly two plus years of these blog articles, it dawned on me that while the title of the series is “growing talent development firms,” I’ve neglected to focus any one article on just how one goes about growing a talent development firm. Instead, I’ve offered tools, tips, and techniques, but never really specifically outlined a formula for growth. So, I will devote this blog to a delineation of the ways firms can think about growing, recognizing at the outset that there are many ways and none necessarily better than the others.

Let me also say that growth is a multi-level proposition in terms of improving both the top and bottom lines, as there are many strategies and pros and cons to each. And it is important to keep in mind that the potential opposite of growth is dying. In fact, this is the very premise of George Ainsworth Land’s seminal 1973 book, Grow or Die. Land was the first to posit transformation theory in which he described the structure of change in all natural systems, including organizations. If systems don’t grow they atrophy at best and dye at worst. So, this is a serious matter for those talent management firms seeking an option other than stagnation or total failure, a.k.a. death.

As expected, listing the ways to grow is a lot easier than actually putting in place the mechanisms through which growth will take root and be sustainable. The purpose of this article, then, is to simply identify the ways to grow, and perhaps some comparative analysis, but not to detail the various plans one can take to execute these. What are some ways to grow a business? In past blog posts, I’ve provided specific tips and techniques, but we can’t talk about business growth without discussing a few overall strategies.

Organic vs. Inorganic

Organic growth involves building on an existing structure and system, whereas inorganic growth generally involves the purchase of ancillary companies that are added to the original structure. Doing the latter increases top- and bottom-line numbers and, assuming a healthy add-on, earnings. The traditional rationale for these add-ons is to either fill existing holes in the current offer or spread the offer into other markets.

Customer Expansion vs. Penetration

No business can be successful without customers, both new and repeat ones. But of these two options for growth, adding new customers has implications for how this takes place. We have all heard that it costs five times as much to get a new customer as it does to get an existing one to purchase more. So, growth through current customers is the most direct and immediately effective approach. There’s only one problem. Without new customers, you can’t expect to be able to then subsequently penetrate them.


Restricted vs. Expanded Distribution

Another way to grow is to increase and spread out distribution of your products and services. The most natural approach in most industries calls for expanding your geographic footprint, ultimately internationally. But this is easier said than done, as there are a myriad of challenges involved, not the least of which are exchange rates, local production, language translation, and outright ownership or local in-country licensing or franchising.

Another way to increase distribution is to add different channels that serve additional markets. For example, one firm started out servicing the corporate marketplace and discovered that its offer, with just a little tweaking, also served the primary education market. Lastly, many companies focus on one or two industries because their products and services are largely developed for those. Transferring these offers to other industries seems a natural way to expand the market


Existing vs. New Products

Another way to grow is to continually develop new programs and services that clients can readily access. These new products can be improvements and expansions of current ones (incremental changes), repurposed for new markets or delivery methods (substantial changes), or even brand-new offers (transformational changes).  The costs of creating brand-new products can be very expensive, especially for smaller businesses. Any means of offsetting these costs, including incremental product extensions, would improve margins.

Top vs. Bottom Lines

Lastly, applying financial solutions can be a way to grow. The most common of these are periodic pricing increases. Slow but steady small percent pricing increases can stem the tide of some industry downturns and accelerate growth during good times. The expectation is these price increases are not exceeded by operational cost increases, which would then offset the value of the increases in the first place. Having said this, these price increases could help overcome some expected operational cost increases. Additionally, appropriately cutting costs that do not negatively affect the business can be a fast growth line to prosperity.

There are clearly many pathways to growth, although one has to first decide to grow. As a good friend of mine once reminded me, “growth can be painful” if not carefully thought through. What are the best ways for you to grow your business? What impact will these approaches have on both your top and bottom lines? Please share your ideas in the Comments below.

About the Author

Steve Cohen is founder and principal of the Strategic Leadership Collaborative, a private consulting practice focused on business strategy and development. A 40+ year veteran of the talent development industry, largely on the supplier side, he has demonstrated a proven track record for building equity by growing top and bottom-line performance for eight different consulting enterprises in the education and training industry he has either founded and/or led. He has been called on to consult with numerous firms needing strategic planning guidance, business coaching, and board advisory services.

His latest book is The Complete Guide to Building and Growing a Talent Development Firm.

He can be reached at: 952.942.7291 or [email protected] or at his website:

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