The title of Marshall Goldsmith’s book, What Got You Here Won’t Get You There – How Successful People Become Even More Successful, offers a critical insight: Change is not just inevitable, it’s necessary for business success and their growth strategy.
In the past, I’ve worked for a number of high-growth companies full time. Without exception, there was a point in their business lifecycles and growth strategy that was very reminiscent of, well, managing a teenager:
- what once worked so well in managing the company’s growth, stops working;
- processes that were fine when the company was small are not scalable;
- the owner can no longer have her hands in everything;
- non- systematic workarounds break under the pressure of volume; and,
- sometimes, the very people who founded the company find themselves outgrown by it.
So, what growth-driving philosophies should a company adopt to avoid adolescent-type growing pains?
No Heroes Here: For a company to grow, it can’t be all about the owner. A strong management team needs to be established so that the company can move forward even without the CEO. Additionally, the next-in-command should bring strengths that balance the CEO’s weaknesses.
Hire Up: A stellar staff is a big growth driver. Rather than under-hiring for skills the company will quickly outgrown, hire with an eye toward the future.
Keep the Model Simple: How does the company make money? The answer (the company’s business model) should be easily understood by employees, customers and stakeholders. Complexity in operations is not a friend of growth.
Create Strength in Numbers: Unfortunately, many companies undervalue the importance of creating a solid accounting and financial infrastructure until the CEO finds herself without adequate information on profitability and cash flow – or worse, she discovers a financial employee has walked away with the company’s cash. Accurate data about profitability and efficiency drivers is key for success (that’s why we call that data Key Performance Indicators). Further, a growing company needs to project cash needs and understand growth dynamics to plan for future financing.
Mind Your Marketing: Creating a compelling brand (your company’s “why”) differentiates it from competitors, drives sales and attracts talent. You also need to nurture strategic alliances that drive referrals. Finally, avoid putting all your marketing eggs in one basket by focusing on multiple offerings and making sure your survival is not reliant on a single customer.
Keep Operations Clearly Defined & Streamlined: Operations built on exceptions are not scalable and scalability is a growth driver. This is why repeatable processes are essential. Additionally, lean, efficient processes are function, not person based, and they employ the least number of hands possible. Once made efficient, all processes should be clearly documented and every employee should know how things work.
Now that your growth-driving philosophies are in place:
– How can you tell for certain if your company needs to change?
– What should you do when your company experiences growing pains?