By Andrew Green & Kevin McDermott
[reprinted from Medium.com Feb 7, 2020]
Some days it feels like we’re living through an era in which every problem is a problem from hell—unprecedented, monstrously large, ramifying wildly, with no obvious solution. For such an age our ideals of leadership are a bad fit.
In 1848 Karl Marx remarked of his time “all that is solid melts into air.” 2019 is hardly 1848. But when we read Marx muttering about “constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty” the mood can seem awfully familiar.
In the United States and in other capitalist countries around the world there is a feeling of uncertainty, of broken institutions, of unfairly distributed opportunity. We’re at a moment when we’re asking ourselves a direct question: In the economic system we’ve built, what—and who—gets optimized?
Contrary to what we usually hear, about 80% of small businesses do survive the first year, according to the Small Business Administration (SBA) Office of Advocacy’s 2018 Frequently Asked Questions. But only 50% make it through the first 5 years.
Of course, these stats don’t tell the whole story about those early growth years. And I was curious to find out what, if any, blanks I could fill in that would be valuable to companies in the midst of scaling. So I began an investigation, and have some early insights to share after our first dive into the data.
"Where do I start?”
It’s a question I hear a lot from clients in growth mode. “Problems keep popping up and they’re taking up all my time. We’re not making progress fast enough!”
What I find with many of my growth-mode clients is that they’re overwhelmed by all the things that are demanding their time and attention. It can feel like – and you backpackers/campers know what I’m talking about – setting up a tent in storm conditions. Everything’s flapping in the wind and nothing’s nailed down. Once you’ve got that first tent corner staked down, the next corner is easier to deal with…
In a webinar I recently gave I was talking about the importance of cultural resiliency for growth-stage companies. “ ‘Cultural resiliency’ sounds like consultant-speak,” one of the attendees posted in the chat box, “What do you mean by that?”
I welcomed the question. As a startup, everyone on the initial tight-knit team has a clear idea of its culture – the values and behaviors that the team lives by. They may not be explicitly stated but with a small team, the values and behaviors that tie everyone together are the implicit norm. Anyone who steps outside of the norm can be assured of pretty quick feedback.
“Any darn fool can make something complex; it takes a genius to make something simple.” ― Pete Seeger
Growth doesn’t always mean “adding more.” Sometimes simplifying the business and doing it really, really well is the way to go. CNN Business writer Paul R. La Monica gives a great example of how this can happen, and how one company turned it around - with better wine and fewer breadsticks..
Five years ago, assessments of Olive Garden – the primary contributor to the overall Darden Restaurant portfolio - were brutal. “Too many breadsticks. An abundance of items on the menu that weren't Italian dishes -- like tapas and hamburgers. Gloopy sauce. And perhaps the worst culinary sin of all -- failure to salt the boiling water for the pasta."
Companies accelerating up the growth curve are achieving increased market traction…more customers, higher sales. That’s great news! But many companies discover that their scaling journey is accompanied by operational breakdowns that cause rework, errors and, if the breakdowns involve core product delivery, customer complaints and attrition. When that happens, finger-pointing and frustration inside the company isn’t far behind.
What has happened here?
Well, back in the startup days, the founders were a small team who shared knowledge on all aspects of the business. They not only had an implicit understanding of the operational processes - they helped create them!
A lot has been written on the key qualities of a successful entrepreneur. Quick, name three or four of your own....
Andrew Griffiths at Inc.com compiled a list of 12 characteristics that I like…here are the top 6:
Now that you’re past the startup phase and you’re a growth-stage company rocketing up the growth curve, are these the key qualities that will enable your continued success?
I recently co-hosted a webinar with Michael Eckhardt, Managing Director of Chasm Institute, a firm that helps companies implement best practices in strategic market development. The topic was the twin challenges of growth.
Michael explained that companies face the first challenge of “Crossing the Chasm,” i.e., finding market traction beyond visionaries and early adopters. Those who are successful with this will then encounter the second challenge.
This second challenge is the irony of growth: The very success that companies achieve in gaining market traction also plants the seeds of their own potential failure. The infrastructure – operating systems, organizational foundation – and leadership behavior that worked as a start-up isn’t up to keeping pace with a rapidly growing top line and the ever-growing number of employees in the company.
One of my favorite business quotes is from an old B-school professor of mine: “Strategy is the art of foreseeing the inevitable and hastening its occurrence.” It’s a paraphrase of a quote on the art of statesmanship by the legendary French diplomat Charles-Maurice de Talleyrand.
Andrew Green shares perspectives and hard-won lessons on mastering the business growth path