Scaling High Growth Businesses

The odds are low.

The chances of turning one’s idea into a thriving business are miniscule. Entrepreneurs face countless hurdles from funding to tech design to market fit to timing.  With the cash burn clock ticking, founders must cobble together a strong team, create a valuable product and generate sufficient noise to be heard above the din.

The start-up community attracts the best and the brightest.  Early stage capital flows to the sharpest innovations.  So when the formidable odds stack up against them, entrepreneurs rely heavily on ingenuity and intellectual horsepower trying to think their way out.

For a time, cleverness can be a winning strategy.  Unfortunately, outwitting the marketplace in the long run is implausible.  Consumer change is too quick, competition too vast and business too complex to stay ahead on smarts alone.  As a result, the cunning that got many start-ups through the early rounds may not carry them to profitability.

“Now What?!?”

On the climb to a viable entity, companies mature through multiple stages. 

Much has been written about the earliest phases of their life cycle. The hyper-growth years are exhilarating ride.  Customer adoption and funding from prominent investors provide a stamp of approval.  For many start-up founders, getting this far is the realization of their dreams.

Now comes the hard part.  Later funding rounds bring higher expectations.  Product proof and brand awareness generate stout competition.  Maintaining high growth rates on a larger base is daunting.  Genius from the top or individual heroics can’t always pull a rabbit from the hat.   

The Transition Stage can be the most challenging of all, particularly for founding leaders.  I have witnessed successful start-ups stumble as staff grows from 25 to 50 to 100 plus.

Scaling a business requires a vastly different skill set than building one.  Beyond vision, technical innovation and product design, companies at this stage require strong cultures and authentic relationships to connect with staff.  Success will be driven as much by Organizational Strength as intellectual prowess.

Make no mistake; prosperous businesses require brilliance, imagination and inventiveness.  However, future prosperity is predicated on harnessing the collective wisdom of the whole rather than the exploits of a few.   Organizational Strength is founded on the principle that nobody is smarter than everybody. Collaboration, authenticity and employee engagement are the fulcrums to reach the next level.

Navigating this evolution is tricky.

In the Family Stage, employees are deeply connected. They share a common purpose as well as a desk or office.  Organizations are flat, enabling a highly collaborative workplace.  

Spread thin across multiple functions, the staff is given plenty of autonomy and decision-making authority. Feeling truly valued, teams are highly engaged and thriving. 

Success means growth.  Growth brings more people with diverse personalities often spread across multiple locations.  New customers types demand attention and resources from legacy clients.  Communication and teamwork is not so simple anymore. Conflicts arise.  While everyone is trying to do the right thing, it can feel like chaos is taking hold.

To maintain order, basic structures are established.  Titles are handed out, some for external purposes, others to keep key people on board.  Hierarchy follows.  Larger work groups form naturally along functional lines.  Team leads are anointed. Strapped for time, Engineering, Marketing, Product and Operations groups become more insular.  Silos are born.  Prioritization and decision-making becomes cumbersome without clear procedures.  More structure and processes sprout.  Rules are written and approvals required.  Compliance ensues.

Nobody invites the evils of bureaucracy.  The underpinnings start innocently.  Soon the tide of hierarchy and systemization wreaks havoc on company culture and alienates the team. This organizational friction stymies innovation.  Growth falters. 

“Now What?!?”

In the coming weeks, we will examine advanced strategies to tackle the confounding Transition Stage.  We will explore the nature of Organizational Strength, a means to best leverage the entire team rather than rely on a few individuals at the top.  Progressive companies are tapping this power with the next generation of organizational structures and tactics. 

A Collaborarchy™(as I like to call it) is the assimilation of concepts to boost collaboration, connectedness and employee engagement at any stage of a company’s lifecycle.  In this approach, young firms can stay true to their core values and culture while migrating to more organic processes for distributing authority and aligning teams.  Founders become Catalysts and Coaches rather than commanders.  The proper balance of autonomy and accountability can be created to attract and retain the best talent while enabling the organization to flourish.

The outcome is lightning quick businesses, flexible enough to anticipate customer needs while fostering rapid innovation. Companies with Organizational Strength can weather the storms of the marketplace and scale effectively to accelerate growth and profitability.