Growth Management

How to Manage the Complexities of Company Growth

 

Xavier Lederer shares an evergreen post from his company blog that explains why your management style and communication needs must change as your company grows, and how it can hinder growth if you don’t. 

“My company has great growth potential, but I am so stuck in the damn dailies, I can’t find time to work on my business.  And my team, they just don’t seem to be pulling in the same direction.  I have a clear vision of our future, but they are just not executing.” sighed the 55-years old CEO of this mid-market manufacturing company. He started his company 15 years and successfully grew it – but over the past few years, growth had stalled. His efforts to re-boot his growth engine have failed as well. In short, he felt stuck. How could he un-stuck himself?

His plan was simple: grow the company and then sell it in 5 years. For him, the next step seemed obvious: he needed to hire a new salesperson.

“What happened to the last sales guy?” I asked naively.

“He left! I can’t find someone who will stick with us long enough to have an impact. The same happened to the sales guy before him. I don’t understand this new generation; they have no loyalty.”

Like many other CEOs he identified and focused on symptoms, rather than on the root cause of his company’s issues. His company had outgrown his management approach.

Complexity increases faster than size.

As your company grows, it adds more employees and therefore more complexity. When you started in your garage people management and internal communication was very efficient: your leadership team (of one) was perfectly aligned on strategy priorities, communication was seamless from strategy to execution, and customer feedback went straight from the sales team (i.e. you) to the product development team (you as well). Then you hired a couple of people, and complexity increased: you needed to divvy up work, make decisions together, follow up on other people’s work,… Complexity increased much faster than your team size: When your team went from 3 to 4 people (+33% increase in team size) your complexity doubled!

The larger the team size, the more complex its management. Managing complexity is a challenge – but the biggest challenge is to regularly adjust your management approach to increasing complexity.

 

Key points include:

  • Complexity increases faster than size
  • Management approaches for each stage of growth
  • Roadblocks to growth

 

Read the full article, My Growth Engine Has Stalled! Where Do I Go From Here? on ambrosegrowth.com. 

 

Why a Leading Edge Strategy May Bleed You to Death

 

In this article, Dan Markovitz identifies the problem with striving to be on the leading edge and why focusing on achieving lean operations is a better strategy. 

Don’t be seduced by the siren song of the leading edge. While it’s a nice concept, it’s not nicknamed “the bleeding edge” for nothing. All too often, companies that strive for first mover advantage bleed their products—or their entire organization—to death. 

Peter Golder and Gerard Tellis’s seminal study of 500 brands in 50 product categories reveals that almost half of market pioneers fail. In fact, the greatest long-term success belongs to companies that enter a market and become leaders about 13 years after these first movers. MITS introduced the first personal computer in 1975. Bell Labs brought out the first color TV in 1929. 3M had the first copy machine in 1950. Good luck finding any of those products today. 

In follow-up work, Tellis shows that even now there’s little evidence to support the idea of first mover advantage: MySpace and Friendster were ahead of Facebook, Books.com was online before Amazon, AltaVista (among others) beat Google in search, and Sony, Blackberry, and others hit the shelves before Apple in mobile music, smartphones, and tablets. That’s quite a collection of corporate carcasses. 

Forget about the leading edge. Instead, focus on becoming faster and more nimble, so that you can get to the head of the market quickly, when the timing is right. That means eliminating the bureaucratic barnacles that encrust so many organizations. Here are a few areas that are probably creating lethal operational drag on the corporate ship.

 

Key points in this article include:

  • The hoshin kanri solution
  • Assessing the skills and traits
  • Misaligned decision rights

 

Read the full article, Want To Be On The Leading Edge? Forget About It., on Markovitzconsulting.com