I’ve been fortunate to be a part of two companies that have experienced a lot of growth over time. I’ve also spent time discussing this subject with other executives and I’ve found the same organizational challenges exist in nearly all high growth companies. It boils down to this: Every growth company will experience certain inflection points along its growth path. It is very important to recognize when these inflection points are developing because it means your organization is going through a “growth spurt” an you need to be prepared for coming out the other side. Sometimes this means you need new IT systems, or upgrades, sometimes it means facility upgrades or expansions, sometimes it is industry driven or customer driven. That said, the one thing that I’ve found that is consistent is the fact that your organization will need more people to step up into leadership roles and lead people. This sometimes means stepping into management roles, but it can also mean simply being very good at what you do such that others want to emulate your work. I’ve seen great engineers, sales people, accountants, etc that don’t want to manage people, but still lead by their actions.
As a high growth company, you will also need many people to step up and take more responsibility. Herein lies the challenge – some people can expand, grow, and adapt well to the changes occurring at this inflection point. However, you will find that some people reach their limit and hit a plateau yet the company has a need that some people cannot or will not adapt to meeting that need. My experience is that when a person has plateaued, 4 out of 5 times the person thinks they can and should should step up and fill the role – they don’t realize that they are not the right fit for that new or expanded role. Coaching and mentoring before you get to that stage can help, but it is not always effective and sometimes the speed of the growth is such that many people can’t adapt quick enough.
My experience is that many people CAN adapt, change, and grow with the company and some want to but can’t. But, for example not every VP of Sales of a $20 million company can effectively perform the same role in a $100 or $200 million company. The same can be said for a CFO. Frankly even the CEO or President may not be able to do so. It is very important to give people the tools and room to grow with the company, but you have to recognize that not all will be able to match the company’s changing needs. Then you have a choice – find a spot where that person can thrive with their skill sets or let them go. I always will look to find a solid landing spot for them, but the challenge is simply this – Can that person’s ego handle it? Some can, some can’t. I always do the best I can to explain the reasons we need a certain skill set and what that person has to do to develop that skillset. Many people don’t want to hear that they are in over their head or out over their skis or otherwise out of balance.
I have to say that these kinds of decisions are some of the most difficult a person can make – not in terms of logic or whether or not it is the right thing to do – but emotionally it is extremely difficult. Many of these people were very instrumental in helping the company grow and expand from say $10 million to $40 million, but then start to level out while the company needs someone in that position or a new position that can lead the growth to $100 million. It is hard having these types of conversations with people, even though the coaching sessions you have had along the way lead the same place. They are loyal people and great team members. That is why I always try to find a place for them to stay and thrive in the company.
In my experience, in growing a company from $15 million to $100 million, you will have at least two major inflection points, maybe three. Then growth from $100 million to $300 million you will have at least three major inflection points. The points at which you have them will likely depend on your industry, your team, and numerous other factors. But you can be assured of one thing – you will have them. And a second thing – how you deal with them and the speed at which you deal with them will determine whether or not you reach that next major revenue milestone.