Fast-Growth Companies Survive and Scale: How to Balance Short- and Long-Term Business Strategy

Short- and Long-Term Business Strategy: How Fast-Growth Companies Survive and Scale

If you want to learn how fast-growth companies survive and scale, imagine your executive team has been shipwrecked on a deserted island.

People are scared and out of their comfort zone.  You have limited resources, incomplete information, and dozens of urgent problems.

What should your team do first? What mistakes should you avoid?

Survival experts know the answer.  Ship passengers and executive team members generally do not.

Strategic decision making simulation participants know this dilemma all too well. Survival requires more than a collection of good ideas. The group must create enough strategic clarity and alignment to:

• Make difficult tradeoffs.
• Focus on the critical few priorities.
• Collectively commit to answering one deceptively simple question:

What must we do to survive today — and what must we build today to ensure we can survive a year from now?

Fast-growth companies survive and scale when they essentially conquer the same challenge. They must simultaneously survive the pressures of today while building the capabilities required to survive — and thrive — tomorrow.

Short-Term Survival Requires the Critical Few

Like an executive team, a shipwrecked group cannot afford to treat every problem equally.

The immediate objective is survival. That means identifying and rallying around the critical few priorities that matter most.

Everything else becomes secondary.

The biggest mistake is to start behaving as though the challenge is finding food. Initially, it isn’t. The real challenge in the first 24 to 72 hours is preventing injuries, securing potable water, protecting people from exposure, and making yourselves easy to rescue.

The useful principle to remember is:

• Immediate survival = stabilize, protect, signal, hydrate.
• Long-term survival = systematize water, shelter, food, sanitation, safety, and group cooperation.

And one strategic principle should govern almost everything:  Don’t optimize for living on the island. Optimize for staying healthy long enough to get off the island.

High growth executive teams need the same strategic discipline during strategic planning retreat facilitation.

Short-term survival might require launching a new product, gaining regulatory approval, protecting key customers, hitting cash-flow targets, retaining pivotal employees, solving capacity constraints, or stabilizing an underperforming operation.

The problem is that fast-growth companies typically have far more attractive opportunities than they have resources.

That creates a dangerous temptation: do everything.

When everything becomes strategic, nothing truly is. Resources get fragmented, leaders become overloaded, and teams struggle with competing priorities.

Long-Term Survival Requires Different Choices
Now imagine that rescue does not come.

The survival strategy must change.

Finding enough water for today is no longer sufficient. The group needs a sustainable water system. Temporary shelter must become durable. Food gathering must become reliable. Sanitation matters. Team roles and responsibilities must be established. Resources must be managed. People must learn specialized roles.

Short-term survival depends on solving immediate problems. Long-term survival depends on building sustainable capabilities.

Stephen Covey calls the balance between short-term results and long-term sustainability the P/PC Balance (Production and Production Capability).  That distinction is critical for companies trying to scale.

The informal processes, heroic individual efforts, rapid decisions, and flexible roles that helped a company reach $50 million may prevent it from successfully reaching $500 million.

Don’t Survive Today at Tomorrow’s Expense
Here lies the strategic trap that action learning leadership development participants face with their action learning projects.

Imagine the survivors become extraordinarily good at finding enough water each morning to survive another day.

Everyone works harder. People become increasingly efficient. The immediate problem keeps getting solved.  People feel like their contribution matters.

But nobody builds a rainwater collection system.

They are successfully surviving today while jeopardizing their ability to survive tomorrow.

Fast-growth companies do this constantly.

Executives become consumed by today’s customers, revenue targets, staffing shortages, operational problems, and competitive pressures. Important investments in leadership development, talent, technology, infrastructure, workplace culture, and scalable processes continually get postponed.

Today’s urgency (Production) cannibalizes tomorrow’s success (Production Capacity).

Research on organizational ambidexterity by Charles O’Reilly and Michael Tushman aligns with our change management consulting experience that highlights this fundamental strategic challenge: organizations must exploit their existing businesses while simultaneously exploring and developing capabilities for the future.

Your Strategic Plan Must Protect Both Horizons
A strong executive team should therefore force every strategic planning conversation through two lenses.

• Short-Term Survival
  What are the critical few things that must happen over the next 6–12 months for us to remain healthy and successful?
• Long-Term Survival
  What must we start building today so that we can successfully operate at two or three times our current size?

Project postmortem analyses find that the second question often exposes uncomfortable vulnerabilities.

Is the executive team aligned?  Can your leadership team scale? Will your systems hold? Can you maintain customer quality? Do you have the necessary talent? Are decision rights clear? Will your culture reinforce or undermine your growth strategy?

Then comes the hardest strategic question:

Given limited resources, what will we deliberately not do?

Our organizational alignment research emphasizes the importance of tradeoffs. Strategy requires choosing where to allocate scarce resources — and accepting that worthwhile opportunities must sometimes be sacrificed.

The Bottom Line
A shipwrecked group that focuses exclusively on the long term may not survive the night. A group that focuses exclusively on today’s emergencies may survive for months without ever becoming sustainable. Fast-growth companies face the same challenge. Your strategic plan must identify the critical few priorities required to survive today while simultaneously building the capabilities required to survive tomorrow. The goal is not to choose between short- and long-term strategy. It is to make disciplined strategic choices that protect both — because sustainable growth requires knowing what you must accomplish now, what you must build next, and what you must deliberately leave behind.

To learn how fast-growth companies survive and scale without allowing rapid growth to outpace their people, culture, and strategy download, Is Your Culture Built to Scale — Or Will It Break Under the Weight of Your Strategy?

by Tristam Brown: CEO

Tristam Brown is an executive business consultant and organizational development expert with more than three decades of experience helping organizations accelerate performance, build high-impact teams, and turn strategy into execution. As CEO of LSA Global, he works with leaders to get and stay aligned™ through research-backed strategy, culture, and talent solutions that produce measurable, business-critical results. See full bio.