Business development 29 July 2015

How to prepare for growing pains if your business is thriving

There are various measures you can take to make the growing process easier
There are various measures you can take to make the growing process easier

There are certain things to be prepared for if all goes to plan and your firm starts taking off – here’s some advice from Profusion’s CEO Mike Weston on how to brace yourself for future growing pains.

We have a guiding principal in the way we produce work for our clients: “What was brilliant yesterday won’t be good enough for tomorrow.”

It’s an axiom that’s proved every bit as true for how we need to think about our own growing business.

You see, at Profusion, we live in interesting times (which in our world we think is a good thing). Over the past three years, the business has bloomed from 20 people to a team of more than 60 and we are planning for that pace of growth to continue. After all, we are good at what we do and at creating demand for it. But as we grow, we’re finding tripwires in our growth path – tripwires linked to team size.

There are a couple of much discussed friction points in company growth curves that tie in to how, as humans, we cope with groups. One is around 30 – 40 people, the second at 120 – 150 – or Dunbar’s number. The latter figure is baked into the maximum factory size W L Gore & Associates allow and the structure of Sweden’s tax authority. Evidently, Bill Gore found that “if more than 150 employees were working together in one building, different social problems could occur”.

As we work our way through these challenges, we will learn some lessons that I think are universal, and that can guide other CEOs who hope to negotiate similar paths, from small to medium and then finally to large businesses.

Your culture will change – embrace it

The first signs came when one of my team leaders came to me, tired and stressed, flopping down into the chair and declaring, “I have too many direct reports. We have to do something!”.

“Too many” for her was 13, and “something” was promoting two of the team to managers, and start creating the inevitable pyramid hierarchy. Her case was well argued and the timing was good – she had two team members who looked great prospects for promotion, so away we went. Almost immediately, her peers were tapping me on the shoulder and asking for the same expansion of team structure.

That change signalled a shift in culture as well. We’d always been a hands-on, flat structure with only the bare minimum of process. With the additional management tier, we suddenly had “managers of managers” and a whole new range of issues to confront. For the first time, some people were now three steps away from the CEO in the organisational chart. What would that do to communication?

The type of people we were interviewing for new roles was also beginning to change. It was time to embrace different personalities and different backgrounds. How could we adapt our culture to make sure we kept the essence of what we’d started out for, while adapting to the new, larger community we were becoming?

Be ready to spend money invest

Bootstrap – to get started with minimal financial resources. The very language of early stage businesses instils a culture of scarcity. However, as a business starts hitting these tripwires, under-investment is as big a risk as profligacy. Our 50th employee was an HR manager, and I’m still trying to work out why I left it so long. The opportunity cost of my time that used to be consumed by HR matters (hiring, retaining and other cultural matters) far outweighed the cost of putting this role in place. This hire was quickly followed by a director of communications. I no longer shuffle embarrassedly when asked if we are in “stealth mode”.

And don’t get me started on office space

Tempting as it is to leave these things to the last minute, the risk of a “panic buy” because you’ve left it too late to plan properly is just too great. So one of the biggest, and toughest, mental shifts is to stop thinking of it as spending and start thinking about it as investment. Ask yourself: “What is the damage to my business’s prospects of under-investing and letting my competitors overtake me?”.

Challenge everything

I’ve heard of startups that don’t have any managers and some that open up all emails for anyone in the business to read. Whatever your policies are, the questions you need to ask are whether they are still effective, will they be effective next year and could they be better? It’s very tempting to stick to a way of doing things because it is part of a corporate identity or a personal philosophy, however, you should constantly test whether they are still fit for purpose. Every business develops bottlenecks and pinch points as work mounts up. Examine how everything is done and don’t consider any process too precious to change. As Apple co-founder Steve Wozniak put it: “think different.”

Don’t be afraid of outside help

Asking for help is not a sign of weakness. Few CEOs have all the answers or even enough time to break-down the nitty-gritty of how everything within a business is running. Getting a skilled outsider’s perspective is can help you leapfrog steps other businesses have been through on their growth path. Yes, your problems are unique, but that’s no reason to run aground on the same reefs on which other businesses have foundered.

A changing business necessitates a flexible and pragmatic CEO. Rigidly sticking to a company culture or processes that are no longer fit for purpose will severely hamper growth. Being willing to change everything to continue to push a business forward should be the only constant.

Image: Shutterstock

Mike Weston is CEO of data consultancy Profusion.

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