Of all the mistakes that growth companies make, here is one of the most common: you think your growing pains are unique. Think again. Your services may be exclusive; your products may be innovative. Your problems, well, those are the same issues facing every company at your particular stage of growth. And that’s good news; it means that you can stop wasting your time and resources floundering for answers and start focusing on proven solutions.
Stages, and Challenges, of Growth
James Fischer, founder of the Origin Institute, spent six years researching growth, interviewing over 700 CEOs in 35 different industries. He discovered that just as there are seven predictable stages of growth, there are 27 common challenges businesses face as they become more complex entities. It’s a crystal ball: it tells you exactly what you’ll experience before it happens.
Figuring it out as you go won’t cut it as a strategy, and it won’t help you create a sustainable organization. If you take steps to identify where you are in your growth and what issues typically crop up during that stage, you can take action to overcome obstacles.How do you get over the growing pains?
- Identify your top five challenges. Among the laundry list of growth issues, where does your company struggle most? Is it employee retention? Cash flow? Unclear values or a culture that resists change? Choose your five most pressing pain points. Does your management team agree that these are the highest priority challenges? Use this insight to develop a strategic plan to overcome them.
- Know where you are in your growth and determine your “Gate of Focus.” It’s all about people, processes, and profits – just not all at the same time. At any given time in your business’s evolution, you will have to put the focus on one of these areas. The key is knowing when.
- Assess your stage of growth to determine where the focus should be. In phase 1, for instance, the emphasis is on profit. You can’t hire people without cash. In phase 2, the focus begins to shift to processes, which will help you shore up your company’s foundation. Where are you? What are the challenges? And where do you need to concentrate your attention? The great part of using the Stages of Growth model is that you don’t have to guess.
- Make sure your leadership modality is aligned with your stage of growth. The CEO, owner, or key leader has to operate in the right modality. When you’re starting out with between 1 – 10 employees, for example, you have to roll up your sleeves and get to work. You don’t have enough profits to hire more people, yet.
Your role is hands-on, but it won’t stay like that forever, not if you want to continue to grow. By stage 3, if you’ve still got your hands in every pie, you’re going to run into trouble. Your stage of growth helps you determine which mode of leadership is going to guide you through this phase and get you to the next.
One of the benefits of using Stages of Growth is that it helps you get your executive team aligned. You can say, “Ok, we agree that these are the challenges we’re facing, and we’re going to create a road map together to address these problems.” Everyone’s on the same page. Or not. And in that case, the CEO or owner can determine who’s not on board and make a decision about their future with the company. If you don’t address the challenges at your specific stage of growth, you won’t be able to move on or achieve success. Identify them, get your management team aligned, and move forward. You don’t have to make the same mistakes over and over; you don’t have to repeat the missteps of other growth companies. Using the Stages of Growth model, you can predict challenges and save your energy and stamina for taking your company to the next level.