Online supermarket Picnic once again features in the Top 10 of the most rapidly growing companies in the Netherlands. The Top 10 is made up of the companies which created the most jobs (FTEs) and had the highest average growth in revenue over the period 2016-2019. With a growth percentage of 97%, Picnic was even better than number 1, Takeaway.com. This latter company, however, created almost twice as many jobs.
The Top 250 Growth Companies is an annual publication by the Erasmus Centre for Entrepreneurship and nlgroeit. The publication is part of long-term research into rapidly growing businesses by the Erasmus Centre for Entrepreneurship and Rotterdam School of Management, Erasmus University. The list distinguishes itself from other lists due to its focus on the growth in employees and revenue, instead of simply focussing on revenue as other lists often do.
The Top 250 Growth Companies is compiled using data from various data sources, including company announcements, business database Orbis, data from the Chamber of Commerce, and a self-managed database of 2000+ rapidly growing businesses.
Crucial element of the Dutch economy
According to Prof. Tom Mom and Prof. Justin Jansen, the two professors who lead the research projects, both start-ups and scale-ups are important innovators for the economy and a crucial part of the Dutch economy with respect to new commercial activities and the creation of new jobs. In their opinion, scale-ups can be seen as early adopters which could disrupt existing markets and industries by making the current offering superfluous.
Despite the importance of scale-ups for the viability of the Dutch economy, however, there is a very limited number of companies which develop to become a scale-up. Jansen: “Our research into scale-ups offers fundamental insights into the Dutch scale-up landscape and the characteristics of their rapid growth. These insights support our mission to strengthen entrepreneurs by translating academic insights into practical knowledge and skills. With our ultimate goal to stimulate entrepreneurs and their success, and expand the number of companies that ‘scale up’ and make an impact.”
Most important growth factors
According to the researchers, on the basis of their long-term research, four factors have now been identified as influencing the growth of businesses. Mom: “The first characteristic of rapid growers is that they express the core values of their organisation in all company activities. Coolblue, for example, doesn’t see itself as an e-commerce company, retailer or webshop, but as a customer travel agent which organises customer trips from start to finish, to make the customers happy and to make money as a result.”
A second feature of rapid growers is that they are constantly seeking the right balance between stimulating and managing growth in their leadership teams. Mom: “Usually, different types of people are needed to stimulate and manage growth. People who stimulate growth constantly see new opportunities; they play to win and work more quickly. Nevertheless, they can be susceptible to error. Rapid growers therefore need other types of people in the team who can manage the growth. They should be more cautious and take the time to realise order and discipline in the organisation so that further growth is facilitated. Even though we see variation in the personalities and leadership styles in successful growth teams, they also share common ground. What all members share, for example, is a strong understanding of the vision and the organisation’s fundamental goal. And just as important: they all have masses of ambition to see the company grow.”
Growth formula
According to Mom and Jansen, in order to constantly scale up an organisation, top managers need to have an insight into the company’s growth formula. Jansen: “In the case of temporary employment agency YoungCapital, this meant constantly expanding the number of candidates and enabling the platform to offer more and more top-quality candidates to businesses. This, in turn, resulted in an increase in the number of interested businesses, which then attracted more new candidates to sign up to the platform. As your company grows, it is important to find new ways to use your growth formula. The resulting rapid growth, however, also goes hand in hand with increasing complexity for the organisation and its processes. Insights into the growth formula can also serve as a useful tool for top managers, in order to understand the complexity and prioritise the activities which strengthen the company’s core, and facilitate further growth.”
The last characteristic of rapid growers is that they ensure that their own employees understand the organisation’s core formula and know how to apply this to their work. Regular communication and sharing of the growth formula by the organisation helps in this regard. Mom: “This serves to attach explicit meaning to the employees’ work and expands motivation in terms of carrying out tasks and realising set targets which, in turn, enables rapid growth.”
Also read ‘Four NPM Capital portfolio companies in list of Top 250 Growth Companies 2019’
Also read ‘The Picnic effect: rapid market growth and further expansion of distribution base’