The Irony of Growth: Will Success Keep Your Business Small?

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. 

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It’s not to say that this is the result of bad management or bad managers….the problems have a tendency to sneak up. Teams in growing companies are, naturally, focused on how to keep growing.  Then all of a sudden the problems become serious enough to put the brakes on any further growth - and, worse, begin to wear down the very organizational foundation. The companies have hit a wall.

What they need is a Growth Leap.

Just as companies are successfully Crossing the Chasm, they also need to make the Growth Leap (my section of the webinar and focus of my client work).  From my experience, when companies hit 50-60 employees (not a magic number; symptoms could appear earlier – or even later - on), the unmistakable warning signs that a Growth Leap is required begin to emerge. 
Knowledge is power, and management teams that are on the lookout for warning signs of practices and structures that can’t keep up with their growth have an advantage over competitors.  These are some warning signs to watch for:

• Everyone seems to be constantly in firefighting mode. There are companies who believe people work harder under pressure; however, firefighting as S.O.P. is in fact damaging to employee culture and increases churn rate.
• People complain about feeling out of the loop and unsure of their roles. Management begins to find task completion, customer service, project benchmarks falling through the cracks.
• People complain there’s just not enough time in the day to get things done. Productivity and morale begin to slip, mistakes are made, absenteeism increases.

​The warning signs represent symptoms of underlying root causes that must be addressed to make any Growth Leap possible:

• The CEO may still be making all the decisions – big and small – and has become a decision bottleneck.
• New, growing departments aren’t getting or sharing out the same data and information to make effective decisions. Communication channels are breaking down.
• Current organizational planning processes can’t keep pace with growth demands, so there is a lack of follow-through.

Enter the irony of growth: what brought the company to this level of success won’t take it to the next level. 50% of growth-stage companies don’t survive past year 5. They find that to sustain their growth they need a combination of new approaches, new talent, new capabilities and revised structures – all at the same time and quickly to keep growth momentum on track.
The first step toward tackling your Growth Leap challenge is to build a game plan...one that prioritizes and sequences the key actions needed, with milestones, accountabilities and resources. It also likely means taking an unvarnished look at the bottlenecks - even at the founder/CEO level – that are holding the company back in order to take it forward to sustainable, next-level success.

Are you detecting Growth Leap warning signs in your organization? Schedule a chat with Andrew to get some clarity, test your ideas and share concerns. And ask about our free Growth Leap Assessment.