Leading through Rapid Growth

Spring is finally here and it’s time to refresh flowerbeds, plant gardens, and enjoy a green lawn again.  There’s just one annoying thing in the way – weeds!  Well, that’s easily solved with a bit of weed pulling.  With a small hand trowel and about 15 minutes of work, I can have a weed-free flowerbed (temporarily, at least).  That’s the easy aspect of lawn maintenance, but have you ever tried to transplant a tree? That requires getting some help to dig it up, move and replant.  Why are weeds so easy to remove but trees (even small ones) aren’t? Simple – trees may grow much slower than weeds, but they develop deeper roots.

I’ve seen companies grow rather quickly as well and while growth is usually a good thing, rapid growth without planning (i.e., developing deep roots) can be disastrous. I’ve seen the effects of this issue with a company where management decided to pursue quick expansion. They went on a buying binge, picking up smaller companies to rapidly grow their empire. Things looked great for a while from the outside looking in – the company was growing, the stock price started to rise, and the CEO looked like a genius.

Within a couple of years, though, issues started to pile up:

  • Profits fell
  • Earnings reports were consistently late
  • The stock price dropped
  • Clients left in droves

So what happened? All that was visible above ground (acquisitions and rapid growth) masked the lack of deep roots below ground (processes and systems in the back office).

  • They didn’t develop a plan to support the rapid growth.
  • They didn’t adjust what worked for a smaller company to processes and systems that would properly support the new, larger corporation.
  • Their systems were incapable of keeping up with the invoices that needed to be sent out, recording the receivables, paying bills, or properly reporting that information.
  • They didn’t hire enough staff to handle the additional workload, which led to excessive overtime and frustrated employees.

Management tried to stop the bleeding and correct the issues, but it was too little too late. Another company eventually bought them out and several people lost their jobs.  As leaders, we have a responsibility to our employees, customers and investors to plan carefully and think through the potential impacts of rapid growth.

Growth is a good thing to pursue, but it needs to be balanced with proper planning and preparation. Don’t just work with the sales team or operations group on growth strategies. Pull in your leaders in Accounting, IT, HR, and other back-office functions to plan for new growth. Make sure you develop deep roots and have a solid support structure in-place to handle the additional business. Expand your company in a way that ensures it will still exist in 5-10 years by developing a strong, deep root system. Roots aren’t exciting or glamorous, but they are vital to your long-term success. Whether you’re seeking to grow a business, non-profit, or a department, consider who you should involve in the planning process to help you develop those deep roots.

Have you seen this happen in other organizations?  How do you plan for growth and develop deep roots?

Photo Courtesy of (c)iStockPhoto.com/Orla

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