Pitfalls That Slow a Fast Growth Company pt. 1
By VICKY BROWN
Well, congratulations. Everything and everyone is firing on all cylinders; and the business is growing – FAST. This is the time you’ll want to take special care to avoid the pitfalls that have caused many fast growth companies to stumble. Here are a few to watch out for, because they can slow you down (sometimes painfully).
What got you here won’t get you there. Like I said, congratulations! Running a fast growth company is an accomplishment. But it means that you are in a constant state of evolution. You’ve probably enhanced the services you provide to clients; and adapted the way you communicate and interact with them. Fast growth means you have to have processes and procedures, and you have to constantly update them to meet new business demands.
And more importantly, there’s the people. You know the ones. These are the folks who were early adopters. They came on board before there was a board. They are the original employee group. And at that time, they were exactly what the company needed. People who had a broad, but maybe not deep, knowledge of a lot of different areas. That’s because when you are starting out, you need people to fill an any and everywhere they may be needed.
The admin assistant would end up doing social media marketing, and a little bit of IT trouble shoot too.
That salesperson might also lend a hand in getting client invoices out.
The coordinator would help out in customer service.
Everyone was doing everything. And while – again – that was what you needed at the time; the needs of the company has probably drastically changed. Now you need specialists that can bring heft to their areas of expertise. You don’t need broad, you desperately need deep. You need people with deep knowledge, that know way more than you about their areas, and can bring innovative and experienced ideas to the table.
With everything moving so fast, and the demands growing, you need to be able to delegate with comfort. Knowing that execution will happen, and happen in a way that enhances your brand. So what can you do about those early adopter employees?
Well, first evaluate where they’re talented, and figure out if you can grow them in the areas that are most needed. After all, it’s far better to develop a good team member, than hiring someone new. So if you can get them training that grows them in a particular skill set – do it.
Or if you can move them to an area they are naturally talented for – then do that.
The point is – try to get them in the right role; because if you can retain them, it will be a big win.
But there are other options, some harder than others.
“…it’s far better to develop a good team member, than hiring someone new. So if you can get them training that grows them in a particular skill set – do it. “
If Monica just doesn’t have the skills you need to lead the customer service team, you can hire a specialist in to head the department, and have Monica report to the new person.
Now again, I’m not saying this will be all light and roses. Monica will have to adapt to what basically amounts to a role reduction; and you’ll have to show a good deal of leadership and support to make sure that working relationship actually works. After all, you want to set the new department head up for success too.
And while we’re on the subject of people.
Waiting too long to backfill for capacity. This is a huge pitfall, and almost everyone falls into it. You see the issue is cash flow. You’re taking on new clients, and you really should hire more people to service them – that way the team can continue to have a comfortable load. But hiring someone new actually puts more strain on the cash flow, because taking on a new client isn’t a one for one relationship. One new client doesn’t exactly pay for the full cost of a new person or team.
Now, you absolutely know more clients are coming, but in the meantime you will have to stretch the cash a bit to cover getting the new person.
So what do you do – you punt.
Don’t waste another minute trying to figure out how to get your business going and what should come next.
Grab your Free 3-Step Leader’s Journey Business Builder course, and get freedom and peace of mind, knowing you are on the right, proven track.
The team can expand it’s workload a little bit more for a while.
And maybe they can, for a while. But the problem with this solution is that a while becomes semi-permanent. And pretty soon, everyone is overloaded, overworked, and burnt out. Because you didn’t backfill for capacity.
Now, I’m not saying arbitrarily add $250K to your salary costs. But I am saying, you should create a plan. Once that anticipates how much room for capacity expansion currently exists with your team, and where is the tipping point to bring on new team members.
In fact, going through an exercise like this will also help you clearly understand the productivity levels, and target, that make sense for your company.
Remember, what isn’t measured is ignored.
In next week’s episode we’ll talk about the remaining pitfall that you’ll need to sidestep, as the CEO of a fast growth company.