In many ways, growth is the lifeblood of any thriving business. Without a healthy level of growth, even the most successful businesses can stagnate. With enough growth, however, these same businesses can build on past successes and continue to achieve commercial viability. To see how a high level of growth can be accomplished, we’ve turned to the example of the Al Humaidi Family Kuwait operations. By looking at that work, we’ll be able to see how the family expanded Kuwaiti European Holding Group into a number of profitable endeavors around the world.
A first thing to note about the family’s operations is that they’ve long been built on diversification, which can be a vital component of any growth strategy. Diversification consists of ensuring that the assets or investments maintained by a company are rooted in a number of different industries or classes. This, in turn, helps the company ensure that if a downturn occurs in any single area, they can weather the storm by relying on income from other areas. In short, it can increase the robustness of a business endeavor and can help to stave off negative business outcomes.
Perhaps even more important to our present discussion, diversification also provides additional avenues for growth. When we look at the growth of the Al Humaidi Family Kuwait operations, we can see that it is not based around a single area of business. Instead, it includes growth across a number of areas such as real estate, tourism, and entertainment. This is important to identify because it showcases the manner in which the family sources new business opportunities. Rather than maintaining a rigid focus on a single field, the family allows inspiration to come from many areas of life which, in turn, expands the chances that a viable growth opportunity can be found.
Now, of course, simply seeking out diversification within a company’s assets does not make it so. Instead, a company must actively seek out diversification in order to build it into its overall strategy. This can sometimes be easier said than done since the practice, by nature, often requires a company to move outside of its original area of expertise and, perhaps, its comfort zone. While this can be a fruitful exercise to be sure, it can also be one that can be anxiety-inducing if company heads are not prepared to make such a leap.
So the question then becomes — how can a company source diversification opportunities in a responsible fashion? When we look to the Al Humaidi Family Kuwait operations, we can see one possible answer to this, which is to seek diversification in sectors that are adjacent to those in which a company currently operates. In the family’s case, they’ve diversified into adjacent areas like real estate, tourism, and entertainment because, while they are all separate, they also share some common ties that inform the work of an organization within each one. That can be a boon to newcomers to a field since they will also have some foundation in the work before they begin.
Another thing we can see illustrated in the case of the family’s operations is that it can be beneficial to start small when transitioning into adjacent fields. This makes sense since the very idea of growth is that it relies on the build-up of business operations over time. Rather than dive into an adjacent field with every ounce of capital available to a business, it may make sense to focus on smaller, more targeted investments so that a business can test out its new growth opportunity.
In practice, this may manifest as a partnership with other organizations in the field to start. In this manner, a company can gain expertise in a new endeavor by looking at the actions of a partner that they trust. This can be beneficial in two ways. First, it helps build that expertise so that the company may act on its own at some point in the future. Secondly, in success, it provides a second revenue stream in an additional field at a faster rate than might otherwise be possible if a company was expanding its operations without a partnership agreement in place.
For some companies, the types of growth that can result from the above partnerships can be enough to satisfy their goals. In these cases, perhaps diversification into adjacent fields has provided enough additional stability that all growth goals have been met. It may also be the case that the growth that has already occurred has also provided enough additional revenue that the company is now able to weather potential financial storms in their original industry. If this is the case, then the above growth initiatives may be enough for some firms.
If a firm is seeking out additional growth, however, it’s worth noting that the next phase for many businesses is to build on the knowledge they’ve gained through partnership endeavors in order to set out on their own. This can manifest in a variety of ways but is perhaps most often seen as additional opportunities that the company enters into without the assistance of a partner. In the family’s case, this has been seen through increasingly more ambitious projects that have incorporated expertise from previous partnerships and other endeavors in their field. In this way, the family has helped establish a growth mindset that has allowed it to stand out in its sector.
While the process of creating a thriving business can necessitate a variety of skills, at some point most businesses will have a need for growth of some kind. Because of this, it can be helpful to cultivate an understanding of how growth typically happens in the business world. To do so, we looked at the above example of the Al Humaidi Family Kuwait operations. By examining how the family has grown its work from a narrow focus to many diverse fields, we can gain a better understanding of how growth occurs and what other businesses may want to focus on in order to leverage a growth mindset for themselves.