For the last 8 years I have been a parent
to my two teenage boys and I've watched with proud admiration as my sons have
faced into the plethora of challenges related to being a teenager and still managed
to grow physically, mentally and emotionally.
It is miraculous to watch, a joy to behold and can have its very funny
moments (which I’m under strict orders from them not to share); it can also
have its less funny and very painful moments too. As a conscientious parent you can’t help but
be aware of the range of physical, emotional and mental challenges that your
teenagers are facing and whilst your hearts may go out to them, you are as a
powerless as King Canute before the tides of the sea to prevent the raging
torrents of hormones, the intrigues of friends and the rigours of tests and
exams from impacting on your children.
I suspect it is, at least in some part, the very personal impact that
these visceral growth challenges have had on me that has fuelled my fascination
with the growing pains of rapidly expanding businesses.
Unlike children, some businesses are born
small and beautifully formed and stay that way throughout their lifetimes, other
businesses grow consistently over a number of years. However, there are also not an inconsiderable
number of businesses that start small but grow rapidly – moving from start up
to aspiring big business within a few years.
Unsurprisingly this rapid growth can cause a range of issues as
predictable as spots and revision angst are for teenagers. Much as many parents struggle with the notion
of their babies growing up, so can many entrepreneurs struggle with their
business growing up. The secret to
navigating these difficult times – is, like with any functional family, talking
about it openly – preferably before it happens.
It won’t stop organisational puberty being painful at times but it could
stop it being disastrous.
I’m currently working with one of the
UK’s most successful high growth digital businesses. It has rocketed up from being a precocious
start up to being a billion pound sterling business in just 6 years. The success has been undeniable but it now
faces a suite of standard problems that are all too familiar to my teenagers –
physical pains, emotional pains and mental pains. Of course, this business isn’t alone - many
rapidly growing businesses face the same set of predictable growing pains. How it deals with these growing pains will
determine whether or not it successfully makes the transition into a mature big
business or whether it will dither, wither and die.
Over my next few blogs I’ll outline 10
of the most common “Growing Pains” I come across when working with rapidly
expanding innovative businesses. I’ve also
added thoughts on how the “Pains” affect the business and have offered advice
on what can be done to ease the passage through the “Pains”. In this first blog I’m going to look at two
of the “Pains” the rapidly expanding businesses will hit first – Changing the
Starting Line Up and Building the Business Infrastructure.
1. Changing
the Starting Line Up –
as a business rapidly expands it is almost inevitable that the people that
started the business will not be the people who are best placed to see the
business through to maturity and beyond.
The transition from the initial team/leader to the new team/leader can
often be painful and can on occasion be crippling. It is rare that people want to be dropped
from a position of power, influence and success in a booming business they
helped start. It is also highly unlikely
that the same talent that set the business up is going to be the right talent
to oversee its development. This is a
difficult circle to square. The drama
that unfolds in the excellent “The Social Network”, a film that charts the rise
and rise of facebook, fabulously demonstrates the vitriolic fall out that can
ensue when an entrepreneur just changes the team without discussion. Many fledgling business leaders fail to
navigate their way through these highly charged emotional waters and end up,
like the proverbial insecure teenager, determined to win the argument, driving
their fledgling vessels onto the rocks made of their own bloody mindedness,
greed or vanity, all too often simultaneously destroying long standing
relationships too.
How can you ease the pain – in
addition to talking about the inevitability of the need to change the team
early in the businesses development it is worth ensuring that the “who owns
what” of the business is properly documented.
It is unrealistic to believe that all the key players are going to make
the entire journey with the business – especially if the business has external
investors. However, it is realistic to
believe those who took the risks and that started the business are properly
acknowledged and rewarded. Talk about it
– get in a facilitator and take the time to thrash it out properly – then get
the paperwork sorted. Parting on good
terms with no hard feelings and fair reward is massively preferential to the
animosity of a legalistic court battle.
N.B. for entrepreneurial leaders -
There is nothing more painful and likely to destroy a relationship than the
perceived betrayal of a friend/partner/colleague/boss who had made a verbal
promise they didn’t hold too.
N.B. for an early contributor - If
you can’t get the debate on “who owns what” had or you can’t get the agreement you
think you have written down and signed, then prepare yourself for
disappointment and start looking for another job.
2. Building
the Business Infrastructure –
for many entrepreneurs building the necessary business infrastructure (finance
functions, risk functions, HR functions etc) is as exciting as watching paint
dry and about as important. Their
business is growing rapidly, people are loving their products and wanting more
– why focus on anything other than product enhancements and marketing
strategies – “infrastructure is a drain
on the business, a cost that will only slow us down and kill the culture.” This is a view that is particularly
prevalent amongst the digital start-ups.
It is, of course, wrong. Anyone
who has played any kind of strategy game like the Sims, that seeks to ape real life
conditions, will know that building infrastructure at the right speed is what
helps you win the game in the long run.
So what makes our entrepreneurs so averse – quite simply, like being
made to do your homework it can seem a bit dull and a bit of a chore. Business infrastructure is also likely to be
an area that they are not an expert in and will not naturally be at home
recruiting the right people and making the right decisions. It’s not what excites them and gets them
leaping out of bed in the morning.
However, like a failure to revise properly for an exam, ignoring the
need for infrastructure can seriously hamper your long-term performance.
How can you ease this pain – well, a
bit like exam revision, building business infrastructure requires a plan and a
bit of self-discipline. The good news
for the single minded, easily bored leaders of rapidly growing businesses, is
that due to the massive proliferation of infrastructure services available on
an on-demand basis, via the cloud, building business infrastructure is no
longer as big a pain as it used to be. Almost all business Infrastructure is now
readily available to rent on an as needed basis, allowing fast growing
businesses the flexibility to ramp up and down the provision as required. For example, in HR, every service from pay
roll management to business partners can now be easily sourced from 3rd
parties. There is absolutely no need to
directly employ any HR people unless you decide you want to. The additional good news is that as the
services are delivered by third parties the dilutionary effect on the growing
businesses culture is massively reduced.
Whilst this approach to building business infrastructure doesn’t remove
all the pain it does, at least, lessen it considerably and it leaves the business
leaders relatively free to get on with what they are good at. So my advice, take the time to figure out
your business infrastructure requirements, build a plan and then employ or
deploy a COO (they like doing this stuff) to source them and bring them online
for you.
That’s all for now – hope you enjoyed
this introduction. In my next blog I’ll
cover more of the Top 10 growing pains that are faced by rapidly growing
businesses and explore what can be done to alleviate the pain. If you or anyone you know needs support and
advice for their rapidly expanding business then do get in touch. You can reach me at rickfreeman@addonova.com
