3 Underestimated Barriers to Rapid Growth

Runners on a parcourse showing Barriers to Rapid Growth

Too Many Leaders Underestimate Barriers to Rapid Growth
Most companies want to rapidly grow revenues and profits.  High growth helps set the stage to dominate market segments, to win big clients, to make strategic investments and to provide opportunities to attract and retain top talent.  High growth, however, also creates additional pressures on the business and the people to consistently deliver at a high quality at high speed.  These pressures are the barriers to rapid growth.

As one CEO put it, “We are trying to build and fly the airplane at the same time, and we’re not even sure where we are going to land the darn plane or who will be aboard when we do.”

Rapid Growth Can Take Many Forms
You may be expanding into new markets, acquiring or merging with another business, developing new products or simply growing the work force to meet increasing demand.  Regardless of the source, smart leaders pay attention to the impact rapid growth can have on your people, processes and culture.

1. People Barriers to Rapid Growth
While the specific challenges rapid growth companies face differ from company to company, almost all rapid growth organizations face acute people pressures.  It is not easy to attract, develop, engage and retain the right people in the right roles fast enough to meet high demand.  Smart leaders get ahead of the curve and create talent management plans that align with the growth plans for the business by answering some fundamental questions early on:

  • How many people do we need and at what pace to meet growth targets? In what roles?  With what skills?  Which roles and skills matter most?
  • How will we effectively assimilate new hires into our existing culture?
  • Will our current work force need to learn new ways of doing their job or need to take on different roles?
  • How will we support our employees as these changes are made?
  • How can we keep our top talent engaged and reduce the stress as greater demands are made of them?

Talent accounts for 29% of the difference between high and low performing companies.  Make sure you prepare your employees for the changes ahead; otherwise talent constraints may be a drag on growth plans.

2. Structure and Process Barriers
You will need, too, to examine your existing organizational structures and processes.  High growth plans can be stymied by ineffective and unaligned structures and processes more appropriate for smaller companies.  Smart leaders identify the critical few processes that matter most and ensure that they are aligned with their growth strategy by answering a few fundamental questions:

  • What processes and structures matter most for us to execute our growth plans?
  • Will our current ways stand up to the pressures of rapid growth or do we need them to adapt to the new world order?
  • Where are the pain points most likely to be vis-à-vis our growth strategy?
  • Do we need to alter the depth or pace of our growth plans so we don’t reach the breaking point in terms of getting work done?

3. Cultural Barriers
Our organizational alignment research found that culture accounts for 40% of the difference between high and low performing companies. Culture and strategy are inextricably linked.  Successful leaders align their culture (how work gets done) to their high growth strategies by ensuring total agreement and understanding of how work gets done across several key cultural dimensions related to growth:

  • Market Approach – Should your growth be fueled by only introducing new offerings after the market has proven that they work (like Dell) or should you lead the market and consistently develop completely new offerings (like Apple)?
  • Customers – Should you scale the business based upon short-term and repeatable transactions with customers (like McDonalds) or should your growth be based upon intimate, customized and relationship-based experiences with each and every customer (like a 5-star restaurant)?
  • Focus – Do you need to focus more on internal systems and processes to support your growth (like Walmart) or more on external customers and market trends (like Whole Foods)?
  • Risk Tolerance – Should you try to eliminate all risk before making decisions (like Prudential) or should you encourage and reward smart risk-taking (like Goldman Sachs) to meet your growth targets?
  • Operational Approach – To meet your growth targets, should you strive for low process variation and high standardization (like In-and-Out Burger) or should you encourage employees to treat each job uniquely to meet customer needs (like a high-end consulting firm)?
  • Decision Making – Should the majority of key decisions be made by top leadership (like the US Army) or should the front line be empowered to make key decisions in the field (like paramedics) to support high growth?
  • Results – And lastly, does growth at all costs matter most (like Oracle) or is growing the “right” way of highest priority (like Outward Bound)?

Companies that agree upon how to approach these seven cultural dimensions of growth build strong corporate cultures to support and accelerate growth.

The Bottom Line
Leaders who blithely ignore the stresses that the barriers to rapid growth can place on their strategy do so at their peril.  It is the purposefully aligned organizations who can foresee the barriers to rapid growth and adjust accordingly that will win in the end.  Are your people, processes, systems and cultural norms ready for rapid growth?

To learn more about whether your strategy is set up to overcome barriers to rapid growth, download 7 Ways to Stress Test Your Growth Strategy

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