When a new company faces a period of fast growth, it faces happy problems. The foundation of the business is in order and the challenges are about enabling scalability. But even they are happy, the problems and challenges are real and in worst case can lead to decline of the company, and the sooner they are addressed, the better.
I have been lately working with a company that is growing over 150 per cent a year and has passed 10 million euros of revenue. I have faced an interesting phenomenon in the company’s management: they are resistant of changing anything, e.g. firing a non-performer, because they are afraid of the confusion that results. “We do not want to rock the boat right now.”
I am of totally different opinion. The companies that are successful in scaling up, are not afraid of rocking the boat, and they even prefer doing it before it is necessary.
As I have written in my earlier blogs, successful start-up companies do not want to spend their precious investment money on scalability, before the existence of customers and demand is proven. Thus, typically, when a company succeeds, and enters fast growth period, its technology, processes, and even employees start to become a bottleneck for growth. This would reduce the speed of growth, if the bottlenecks are not opened fast.
But a very human characteristic, and many times even a good one, is that we do not want to change still functional hardware, software, systems and people. “Do not fix it, if it is working”, is a common an in many contexts correct advise. But in a situation, where something still working is a bottleneck, the common wisdom does not hold. It is usually less expensive to remove the bottleneck early than later, when the company has also many times spent money on repair kits on failing technology.
Also a very human characteristic is to hope that a problem disappears or becomes irrelevant, if we do not do anything about it. But in growth companies scalability problems do not fade away, but get worse every day. This applies also to people: growth companies are not places where underperformers can learn new skills and attitudes. They are just performing worse every day.
People, who have worked for larger and more stable companies, have learned that the most effective approach to problems emerging is to try to isolate them and first to ignore them. The too fast attempts to change tend to create more harmful turbulence than beneficial results. In stable environments in large organizations underperformers can improve their performance by learning and by organization either changing their position or narrowing their area of responsibility.
Unfortunately the frames of references on how to react to problems in large organizations tend to be wrong in turbulent fast growth. Thus, it is a good practice to support rocking the boat as soon as possible to ensure the continuation of growth.