A while back I was talking with a manager at one of my clients. He had been part of the company as it had grown quickly from less than 100 people and $12 million in revenue to a public company that was at least ten times larger. He was fondly recalling the company’s “early years” when it was a scrappy, freewheeling software startup. He seemed to be struggling with some of the new "rules" and formalized structures that had been put in place. We discussed the trade-offs that usually happen as a company grows.
Ah, growing your business. For many of us that has a really nice ring to it. But over the years I’ve seen enough companies grow to know that it’s not all roses all the time. Every phase of a business has its challenges. As I recalled that conversation and my experience seeing a number of companies grow I thought you might find it helpful to think about the less-glamorous, sometimes challenging side of business growth. Here are a few things to look for.
Balancing Control With Freedom
If I've heard it once, I've heard it a million times. "We can't keep doing things this way." Let's face facts. As a business grows you can't continue to operate in the more haphazard way you did as a startup. For your team, this is going to be a very noticeable shift in perspective. Spending they had previously done without checking with anyone now may require management approval. They may be called upon to produce financial and management reports that they didn’t do before. A more formal HR process often gets implemented. Some may find all this a shock.
More formal procedures are simply required to maintain the proper level of information and control over key parts of the business. A company that tries to continue doing business the same way they always have sounds nice and even somewhat romantic, but it lacks realism.
Another aspect of control and clarity involves job responsibilities. As someone who’s been part of several startup companies I know how in the early days basically everyone does everything. Job definitions are pretty vague and fluid. If an order needs to get out the door EVERYONE rolls up his or her sleeves and gets it done. As the company evolves it’s important to focus people into more defined job responsibilities. New employees will want that level of clarity. And the skills sets you will be looking for for a specific job are more targeted. In the startup phase you might need someone who can be the organization’s receptionist and also someone who provides customer service. Your programmer might need to also have solid design skills. Your CFO might also be your COO. Overlap is common. Over time that organization chart evolves and becomes more specific about roles and responsibilities.
Action Item for You: Identify ways to allow employees as much autonomy as you can. Trust their judgement. Adopt only those policies and procedures that are necessary.
Finding and On-boarding New People
As the company grows, often so does the need for staff. As a leader, you will find that one of the more challenging parts of growth is identifying the people who are the best fit for the company. It’s one thing to bring on 1-2 solid people during your startup phase. It’s quite another to bring in 5-7 or 10-20. When you bring in an early employee they quickly become a member of the team. They get integrated swiftly and learn the company’s values and goals. It’s relatively easy to bring 1-2 people up to speed. A larger number of people (possibly more geographically dispersed) takes more care and consideration.
A very important (and often under-appreciated) part of this “on-boarding” process is how to incorporate the new people into the culture. How do you instill the company’s values in new staff members? Having clarity about what those values ARE is a place to start. If you haven’t taken the time to really explore this, do it sooner rather than later.
A great way to communicate these values is by stories. You should always be on the lookout for stories that truly represent what your company is fundamentally. Collect these stories. Weave them into any training and even interviewing. Trust me, people remember stories better than just about anything else. They are a great way to communicate the behaviors that best show who you are.
Action Item for You: Carefully develop an “on-boarding” process that incorporates the company’s history, culture, values, unique value proposition, and training.
Another significant issue that many growing companies face is how to maintain customer knowledge, interaction, and service. When the company is smaller, business leaders know pretty much everything about every customer. As the company grows the company’s leaders can become more distant from the customer and their experience. The customer’s primary points of contact often change. Instead of dealing directly with the CEO or the CFO, they now deal with an “account manager” or a salesperson with whom they have less of a relationship and a history. This transition may feel disruptive. How you manage this makes a ton of difference. You cannot underestimate a customer’s concern through this time. Be aware of it and deal with it directly. Minimize disruptions.
Also, how information about your customers and their needs is maintained and shared is critical. When a company is small that information is easy to track and share. (Spreadsheets anyone?) When you have tons of customers and lots of employees the challenge grows dramatically.
Action Item for You: Define ways to stay in touch with customers. Implement tools and processes to maintain and share customer knowledge. Provide customers a clear way to stay in touch. Build customer needs into how you measure employee success (and clearly define accountability and responsibilities).
Keeping Employees Happy – and not too distant
One problem that often pops up during business growth is that employees start to feel a sense of distance from leadership and perhaps from the organization’s core mission. Consider how an early-stage company’s employee feels a sense of responsibility for a customer’s satisfaction. Now consider the same employee when there are a dozen people who service customers. Or twenty-five. Often they feel less critical to the company’s success. They feel that what they do is not as important to the customer’s satisfaction as well. They feel like a small cog in your company's wheel.
Distant employees feel less loyal, less connected to the company. To be honest it’s just a fact of life. In a way I think this is more of a challenge for leaders than it is for employees. I’ve seen it numerous times. In a company’s early days, every employee is significant to the company and each one typically has a close tie to the company. Early employees are more committed, more loyal, more invested in the company. As the number of employees grows, each one can feel more distant from the core of the company. Their job is merely that, a job, a paycheck. And that’s okay. But as a company’s leader you have to be aware of this. You must get comfortable with it. Not everyone will be as committed to the company as those first employees; but that doesn’t make them bad people. They are people (assuming you’ve hired the right ones) who still want to succeed, still want to do a good job. They often are just not as invested in the company as you and your first employees are.
Action Item for You: Clearly tie employee responsibilities to the company's success. Make sure they understand and appreciate the role they play.
The growth of your business can be an exciting time. It can also be a stressful time - for you, for your team, for customers. Appreciate the challenges that can come with growth - and mitigate them as much as possible. By consciously making the right decisions you can grow in a healthy and controlled way. Let's make business growth a positive experience!
Please feel free to reach out and get in touch and let's explore how I can help you and your business succeed. No pressure. Just an informal discussion to explore some ideas. You can reach me at (713) 907-8429 or BCohen@IDiscoverConsulting.com I hope you are enjoying these blog posts If so, please help spread the word. Tell others about IDiscover Consulting Group and IDiscover Journal. Share these posts. Comment on them. I’d really love to hear your ideas!