Are You Hardwired For Growth?
A sudden surge in demand for a product or service can be overwhelming for a business. The company's focus often will shift from building long-term ideas and vision to the challenge of delivering for customers day-to-day. Management teams look for any crutch to help them deliver for customers in the moment. They buy software, hire contractors, and put heavier demands on existing staff. These quick fixes enable the company to deliver a quality offering without disappointing customers. Each of these fixes, however, begins to change the company in small ways. Taken together, they can have a big impact on the way the company operates.
We think of it as a hardwiring of the organization. Imagine you have built an aircraft. You want to make it go a little faster, so you add some new wires and components to the engine. Then you want it to carry more passengers, so you add a few seats. Then, you need to expand the fuel tanks to carry the extra load. Eventually, you have an aircraft that is substantially different than what you started with. Is this plane still airworthy and capable of taking you across the country?
We recently talked to a friend who is in the process of transforming a $600 million company that was built from a start-up. He said,
"When I came in we were a bit like the wild, wild west. We constantly added and moved people around to meet the needs of the time. I found that over time, many people were in the wrong roles. They were an imperfect fix for a time, but overtime we became hardwired in the wrong way. We had to break some of the wiring to position ourselves for growth."
This effect is especially true when you grow through acquisition and try to assemble various organizations into one. This is what our friend said about his company's acquisitive growth path:
"We did 10 acquisitions over a few years in an effort to assemble a new business line. It was if we threw a bunch of parts into a bag, shook up the bag and hoped that the pieces would assemble themselves into a cohesive unit."
The takeaway is that a company needs to rewire from time to time to take on the next phase of growth. How the business evolves organically is not necessarily the best way to design the organization for success going forward.
At Avondale, our business is cyclical, which requires us, during a slow cycle to reassess our business and scale back to the pieces that are essential for the next phase. If we didn't do this occasional rewiring, we would eventually end up with a tangled mess that inhibits the firm's growth.
Share your thoughts with us about building a company for the next growth path. E-mail us at email@example.com.
KARL STARK AND BILL STEWART | Columnist | Co-founders, Avondale
Karl Stark and Bill Stewart are managing directors and co-founders of Avondale, a strategic advisory firm focused on growing companies. Avondale, based in Chicago, is a high-growth company itself and is a two-time Inc. 500 honoree.