The leadership mindset for growth.

Two questions that could define your future

A couple of years ago I worked with an entrepreneurial business that had doubled in size between 2013 and 2016 and was planning on doubling again by 2020. The help they wanted from me was less about how to get that growth – they already had some pretty good ideas that just needed some shaping – but more about how they, as a leadership team, needed to change to be able to manage a business of that future size.

We worked hard on their infrastructure, management strength and leadership, and I wrote about the lessons learned at the time here. When I caught up with them a few months ago, they were happy, thriving, and still on track for that 2020 goal.

But around the same time as that catchup, by pure coincidence, I started working with another business, who’d also pretty much doubled in size between 2013 and 2016. The difference with the second business was that, in 2017, in their own words, they “hit the wall”. With flattening sales, declining margins and a big spike in staff turnover, by the time they spoke to me morale was falling, and the management team was severely overstretched just trying to keep the business on track and customers happy.

Both sets of owners were passionate about what they did, cared enormously about the quality of what they produced, and would do whatever it took to delight their customers. There wasn’t a great deal of difference in the markets in which they operated, or, back in 2013, in the relative sizes or complexities of their businesses. So, why, in 2019, were their situations poles apart?

The first business had recognised very early that their rapid growth was putting increasing pressure on their people, systems and processes, and themselves as owner-managers. They’d already recruited and trained a bunch of new front-line staff and started investing in a new core system by the time we began working together.

I helped them redesign their structure and working practices to suit a bigger scale operation, but more importantly, to recognise the management and leadership gaps that would need filling if the owners themselves were to avoid becoming the main constraint on the organisation’s growth. Since then, they’ve recruited three top-flight managers into their leadership team and delegated much more of the day-to-day control, which has empowered the rest of the team to step up, and allowed the owners to focus on developing the business further and working out their next big sources of growth.

In contrast, the second business had aborted its work on systems replacement having failed to find a solution they liked. They’d recruited more front-line staff but no more managers, and the owners had ended up working 80-hour weeks, with almost all the business decisions still flowing through them. The reason that their 2019 situations were so painfully different, was that, way back in 2015 the first business accepted that they were going to need help. It really is that simple.

They realised they needed help from specialists to find and customise a core system that worked for their unique needs; help from a stronger, more empowered management team to recruit, develop and lead the growing workforce and take more ownership of business operations; and help, as it turned out, from an external advisor to show them how they and their people would need to evolve, to be able to run a business four times the size of the one they’d been running just a few years before.

Fortunately the second business has now recognised that same need for help and we’re already well on the way to building the infrastructure, capability and management capacity not just to cope with the scale of the business they have today, but to prepare for the size they intend to be in a few years’ time. Over the coming years they will need more help from more people, both internal and external, and they’re starting to understand and accept that reality.

The biggest challenge in any high-growth business is building the capacity of the organisation fast enough to keep up with the growth: planning for the people, skills, systems and cultural challenges that come with doubling, doubling, and doubling again. It’s a challenge that all entrepreneurs discover, either quickly or painfully, that they need help with. And it’s one that, from my own experience, can never be addressed too soon.

So, here are the two questions that could potentially define your future: how well prepared are you to sustain your growth? And how easy do you find it to reach out and ask for help?