Why Do Businesses Shift From a Growth to Optimization Mindset?


Optimization of business operations is an important part of the evolution of any company, especially manufacturing businesses. While optimization as a strategy is used by SME manufacturers to grow revenue and drive profits, it can also help them figure out how best to allocate resources to produce maximum results. 

In this post, we’ll go over why companies shift from a growth mindset to an optimization mindset and how the shift can be beneficial to your business. 

What is a growth-oriented business?

Growth-oriented businesses are organizations that focus on how to grow their business. As businesses they are 

  • Focused on the long-term beyond the quarterly results 
  • Focused on the big picture as to the mission and vision of the business 
  • Focused on growing the business not just in terms of revenue but in terms of the number of people they employ, how big the brand presence can become, how extensive their customer reach can be etc. 

Growth-oriented businesses are keenly aware that customers want a product or service that solves their problems in innovative ways; this means that growth-minded businesses don’t just find new customers, but also spend time developing products and services so they can extend into new markets. 

What is an optimization-focused business?

Businesses with an optimization mindset are concerned with efficiency and cost. They are focused on reducing waste, improving quality, and reducing costs. An optimized business aims to become more efficient in its operations by reducing costs and improving productivity.

A company becomes optimized once it achieves its goals at a lower cost, and provides better customer value than what was previously possible. Optimization also ensures that businesses can respond quickly to market changes and innovate efficiently as market conditions change.

Optimized businesses are run differently from other companies because they

  • Focus on creating benefits that customers value while keeping a tight grip on the costs
  • Use data-driven decision making
  • Use impactful technology  such as Katana ERP to improve their processes continuously
  • Take advantage of the latest technology trends such as AI etc. 

When do businesses shift from growth to optimization-focused?

Optimizing a business is not just about getting the most out of what you have. It’s also about what you need to do to achieve your goals. 

That being said, there are a few key moments in a business’s lifecycle when companies decide to shift their focus from growth to optimization –  

  • When businesses have enough data and know what works for their customers. Optimization requires a great understanding of your business fundamentals as well as insights from the ground on what the customer wants, needs, and will pay for. When businesses have enough of this information, then focusing the business operations for optimization before further growth can be a great way to build a long-term sustainable business. 
  • When businesses start thinking about how much money each customer is worth individually instead of focusing on growing the number of active users or paying customers without considering their lifetime value (LTV). This allows companies to make better decisions around who they go after next or which channels need optimizing. 
  • When businesses think that there is no more potential for growth within their current model, or if they are satisfied with the current level of growth. A good example is Amazon Prime – although their main goal was always to increase their customer base, once they reached their limit for membership signups (100 million), they began focusing on providing better service for those members who had already signed up by offering discounts and free shipping options based on purchase history or frequency.

Why do businesses shift their focus from growth to optimization?

Generally, businesses shift to optimization as a strategy because they have reached maturity, growth opportunities in the market are limited, or they are facing competition from new players who are offering better products/services at lower prices. That being said businesses shift to optimization as their strategy to focus on their core: 

  • Competencies
  • Customers
  • Markets

Optimization mindset isn’t necessarily a product of growth or stagnation; it’s just an approach to the business strategy that acknowledges that no matter how much you grow or what you do, you will always be able to improve your operations and that’s the essence of a business with an optimization mindset! 

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.