Tomorrow's growth won't resemble today's, especially if you're growing at a rapid pace.
All of us who manage rapidly growing businesses are faced with the
continuous problem of sustaining that growth. The problem is that, even
for companies that are engineered for growth, growth going forward looks
nothing like the growth we've already experienced.
Let's take the Inc. 500 companies as an example. Over the past few
years, the cutoff for the 500 fastest-growing companies in the U.S. was
around a 10x growth rate over a three-year period. Most companies
started their three-year run as small, nimble teams, with revenues in
the six figures. They were able to shift as customer opportunities
surfaced and they put maximum effort into every growth opportunity that
came their way.
Once a company grows at a 10x rate, however, it's in a completely
different boat, and often the boat is in an entirely different ocean.
The current revenues of the Inc. 500 companies range from a few million
to more than $100 million. These companies have dozens or even hundreds
of employees and may be building businesses in multiple markets.
We've seen a number of companies successfully sustain growth past the
initial 10x push into the Inc. 500 list. In each of these cases, they
were able to make three key adjustments to propel their growth into the
next horizon.
1. Customer Focus: Wide to narrow
As a small entrepreneurial company, you need to adapt quickly to your
customer needs across a wide spectrum. But as companies get bigger,
sustaining growth often means narrowing your focus. This allows you to
scale the business around a key strength that fuels your growth.
2. Organization: Unstructured to structured
A small entrepreneurial company needs to break down barriers and
move the team toward the highest-value activities. But once a company
gets to a certain scale, this lack of structure becomes a hindrance to
growth. Larger growth companies need structure to define roles, create
clear accountability for results, and ensure that they can scale the
business beyond a few customers, locations, or products.
3. Leadership: Brute force to visionary and operational
Every small company needs a motivated and charismatic entrepreneur,
or two, who can take personal responsibility for building the company.
In contrast, a larger organization needs a visionary who can get the
team on the same page--without forcing them to do so. They need a
coach, rather than a star quarterback. In other words, they need a CEO
with operational skills who can engineer growth by piecing together
goals and targets and holding each individual in the company accountable
for their contribution to the overall value growth of the company.
We've seen a number of businesses adapt their organization in these
three ways to sustain growth over the long term. We would bet that many
of you have made one or more of these shifts in your business--if so, we
want to hear from you.
Over the next few weeks we will be sharing more stories about each of
these three adjustments. Please send us an email with your success
stories, so we can include them in our upcoming columns. Or send us some
examples of businesses you've seen exhibit these shifts. We can all
benefit from the success stories of growing businesses.
We can be reached at karlandbill@avondalestrategicpartners.com.
SOURCE: www.inc.com
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