What Got You Here Won’t Get You There
CEOs are always looking for growth. It’s one of the truths in life. Many entrepreneurs start companies with a great idea. They have a great product or service, hire really good people, land a few good clients and these companies are off to the races. Then the company reaches profitability and they continue adding more clients. The company is growing and things are going well (although few CEOs are ever completely happy with growth). Then something happens that they can’t explain – growth slows down. Landing new business seems harder. Finding good people that are productive becomes tougher. Quality sometimes slips. This is the all-too-common story of most businesses. Sometimes that growth curve levels out at $1M in revenue. Sometimes it is $5M or $10M. Some companies make it all the way to $50M or $100M before that slowdown occurs, but most companies finally get to the point where they can’t figure out how to get it to the next level. The typical “fixes” often have to do with being more efficient in operations (cut costs) or simply firing people and replacing them with others. But those things typically only get the CEO so far.
Why does this slow down happen? A few reasons.
- Strategy needs to change – When you are a start-up or a growing company, you and your team are full of all kinds of ideas. You see opportunity wherever you look. Your team develops cool offerings to take advantage of opportunities. You do whatever you can to land customers and make them happy. It seems like anybody who has a pulse is a possible prospect and you chase them all. Then as you get bigger, that is not so easy. You need to take care of current clients to make sure they are happy and that takes time and effort. You’ve saturated some markets and there aren’t that many more prospects to chase. Competitors have caught up with you and starting taking market share. Many companies have either a) gotten too focused on current clients and markets to see other growth possibilities or b) try to do way too much by chasing way too many markets. Rather than specializing in a market and becoming the market leader, they try to chase anything and everything and become a jack of all trades and master of none. You need a strategy and focus that will provide direction to your team.
- You don’t have the right people – In the early days, your team was awesome. They worked hard and they understood what the company was all about and were dedicated to its success. But as you grow, the people that you relied upon to “go figure it out” are now really busy managing this great business you’ve developed, and some have gotten over their heads in terms of their ability to grow with the job. You often find the bookkeeper has progressed to the VP of Finance without any of the education or training to do so. Most often, the sales leader is someone who was a good rep and got promoted, but has never been shown how to hire, coach, train, manage, etc. Some of your star employees may have simply left or retired. The “new” people didn’t come up through the business and don’t have the same passion. You’ve tried to hire good people, but they never seem to “get it” like the core team you used to have. Often times, the people who got you here simply don’t have the tools to get you to the next level.
- Nothing is repeatable – When you were growing, people just figured things out through hard work and dedication. You didn’t need to write anything down. However, now you have new people in the company and they don’t know what is in everybody’s heads. There is no road map or playbook to follow, so they often flounder. Sure, you train them, but often times your training consists of two weeks of drinking from the fire hose coupled with shadowing someone who is not a good teacher and the new employee doesn’t learn what they need to be successful. You think you have made bad hires and fire them only to replace them with another person who is subject to the same process. This becomes a revolving door. Sales people never learn the best questions to ask, how to differentiate themselves from the competition, how to negotiate effectively, etc. They were never trained how to do it for your company.
- There is no system – When you were a young company, you could count on people to do the right thing and you didn’t have to worry as much whether things got done. They just seemed to know and took initiative. Now with many more people in the company, that doesn’t work. They are not as connected and they need to understand expectations. Without direction and regular check-ins to provide accountability and to develop people, things seem to fall apart. The execution is just not there like it used to be.
If any of this sounds familiar, join the club of 90% of businesses. The things that got you to where you are today were awesome and you can never forget them. But now you need to change. A new level of growth often requires a new level of discipline in the business. That means evaluating your strategy. It means hiring and effectively training new people, documenting processes that should be followed, holding people accountable, etc. Many companies resist this change. They say things like “We’ve never had to do this in the past. Why do we need to do it today?” The answer is simply that the current system (or lack thereof) is not getting the same results. It’s time to changes things up if you want to revitalize that growth pattern.