There is ultimately only one
reason to grow your business; to increase its value. Business leaders
like you everyday are entering into, swimming amongst or exiting out of
some stage of their company’s growth. You don’t
have to be a Wall Street resident or even an expert to recognize the
daily stock price fluctuations speculating what will be become the next
stage for an enterprise. Do they predict booming growth based on the
current track record or are they raising red flags indicating someone
or something is potentially locking that growth potential down? Whether
the stakeholders in your business are private or public, unlocking any
door to a stage of growth is an overwhelming and gargantuan task.
However, nothing can create value faster than actual or visualized
organizational growth.
I have had the good fortune of watching hundreds of companies and their
growth patterns as they attempted to unlock the potential growth
envisioned by the CEO and supporting management team. While each
organization possessed similar desires to achieve their projected
results, the actual outcomes I witnessed varied widely. Some started
out well enough, full of enthusiasm and confidence only to lose focus
and momentum eventually forcing them to a plateau. Others, while
starting slow, built steam but failed to push hard enough to create the
required breakthrough. What caused these best intentions to
disintegrate into disappointing outcomes?
One thing was apparent, each organization subscribed to the same two
notions:
- The CEO and his/her supporting
team “wanted to take the company to next level”,
yet they were unaware of what their current level was and therefore
couldn’t identify the next one they wanted to achieve.
- This same leadership team also
declared that “our business is different” and for
that reason the hurdles they must conquer to get to the
“next” level cannot parallel any other
organizations.
What
are these levels to which they alluded and was each company truly all
that different?
The various levels that the management teams alluded to can be
summarized into what I term as The Four Stages of Growth: Start-Up, Initial Growth, Early Growth and Mature Growth.
After spending thousands of
hours with CEOs and their executive teams, you would think that these
theoretical differences between one organization and the next each
attempting to advance would be crystal clear. This was not the case.
Instead five issues creating hurdles to the next growth stage emerged
over and over again; People, Processes, Profitability, Personal
Leadership and Planning.
This concept is the basis of the GrowthSpeed®
formula for company
growth. At each level of growth, the five hurdles appear in a slightly
different form. The company must successfully negotiate and leap over
each of these five hurdles to move on to the next level of growth. The
inability to make a transition over one of these hurdles forces the
envisioned growth to stall at the current level. The company must then
repeat the attempt at that hurdle until it is conquered.
Imagine the thoroughbreds that compete in hunter-jumper competitions.
They are confronted with a series of hurdles or gates as they negotiate
the course. Each hurdle presents a different type of challenge; some
are tall, others wide, several hurdles in sequence, while others
require a landing in water. When a hurdle is not completed it may be
due to a horse and rider which fail to attempt a hurdle and when part
of it is hit, it is not counted as complete. The horse and rider are
penalized and in some cases they must attempt the hurdle again.
As I mentioned, these
hurdles show up in different forms at each growth stage. The Start-Up
level is characterized by the desire to launch a new idea or concept
into a viable commercial venture. This can be the emergence of a new
company, the distinction of a new operating division and/or the
development of a new product or service offering. The focus is on
survival. The predominant activity is proving the concept by generating
sales revenue. Finding a customer becomes paramount. This phase is
often characterized by the founding team exclaiming, “we got
the business, now what do we do?”
During the Start-Up
stage, the People
Hurdle is focused on creating
assistance for the founder. The Process Hurdle
is focused on
identification and documentation of effective processes to provide
clarity for new team members that join the organization in the future.
The Profitability
Hurdle in this stage is focused on staying afloat as
the new venture attempts to sustain itself. This often requires outside
funding, capital infusion or income sources from the owner. The Personal Leadership
Hurdle places the founding leaders each in the role
of the Champion. The leaders must be the Champion for the business, the
concept and the value customers will receive. The Planning Hurdle
represents the need for a business plan that can effectively articulate
the value proposition and the opportunities associated with the new
venture. This document will be the looking glass through which
prospective investors, partners, customers and employees will determine
whether they see themselves as part of this company’s future.
Each one of these hurdles represents a critical juncture for the
organization. If they are not successfully negotiated and conquered,
the company must repeat the attempt until the hurdle is crossed or risk
their possible demise.
As a company navigates their way through the stages, each of the five
hurdles is clearly present, but manifested in different ways. As you
enter the next stage, not only do you need to recognize their new
appearance, your arsenal to conquer them will also likely change. Think
of the garden enthusiast who desires to make an empty patch of land
into a vibrant and bountiful vegetable garden. First they must plant
the seeds and during their start-up growth, snails appear. By using the
latest and greatest repellent, the gardener kills the snails. As the
seeds continue their growth and the garden begins to flourish,
crabgrass appears. It doesn’t look like a snail, it
doesn’t act like a snail same but it is a hurdle nonetheless.
The gardener can’t use the snail repellent this time;
crabgrass is its own animal and requires a different solution. You get
the point.
Regardless of the size
of your business, or the type of business you are in – your
desire to advance through the four stages is most likely present. And
therefore, so is the inevitable emergence of the five hurdles. Take a
look around, what growth level are you at right now? How are the
hurdles expressed in your organization? Most importantly, what level do
you want to be at and how can the GrowthSpeed formula get you over
those hurdles?
A client company launching a new line of business faced these hurdles
recently. While successfully negotiating several hurdles, two presented
obstacles. The founder/CEO was still in the role of Champion and
hadn’t transitioned to Leader. He found it difficult to
recruit, retain and develop new salespeople because “no one
knew the business like he did.” The organization also lacked
clarity in the identification and reliable application of its
processes. What symptoms did the organization possess to reach this
diagnosis?
First, It was obvious the company was growing, yet employees felt they
were working harder and accomplishing less. There was significant time
wasted on re-doing tasks and explaining unsatisfactory work which was
blamed on inadequate processes. Second, virtually all new business
development was still being accomplished by the founder/CEO. This put
the organization at risk of being totally dependent on one person for
growth.
As a result of this
diagnosis, new strategic plans were developed including key objectives
for developing new revenue growth by recruiting and developing
additional sales professionals. An operational plan was documented to
improve effectiveness of existing processes while redesigning others.
The key to these changes and the subsequent growth acceleration was the
application of the GrowthSpeed formula to identify the obstacles to
growth and then implement the plans to address them.
Every organization I have worked with has been confronted by these
hurdles as they navigated their own desired course of growth. Their
ability to identify and subsequently conquer the hurdles is what truly
differentiated them from each other after all. If you would
like to identify your current stage of growth and what might be holding
you back, contact Jim Canfield at 858-449-4207 or growthspeed@aol.com.
Jim
Canfield is the founder of GrowthSpeed®,
a Business
Accelerator focused on increasing the speed at which companies grow.
After founding and leading several companies, Canfield logged thousands
of hours coaching CEOs and their executive teams. In addition, Canfield
was a member of the TEC International executive team serving as Chief
Learning Officer and the leader of the Institute for Executive
Leadership at Rhodes College. Jim can be reached at 858-449-4207 or growthspeed@aol.com.
Contributing Author: Kristy Cornell, kristycornell@yahoo.com.
If you would like additional information on this topic or others,
please contact your Human Resources department, Dana at Lighthouse
Consulting
Services LLC dana@lighthouseconsulting.com, our
website: www.lighthouseconsulting.com.
Permission
is needed from Lighthouse Consulting Services, LLC to
reproduce any portion provided in this article.
Home