The Growth Company's Dilemma

When your business isn't a start-up but it isn't yet acting like a "big" company, your role as CEO must evolve from jack-of-all-trades to team-builder.

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There is no owner's manual on how to run a growing business and there is no job description that defines how a CEO can best grow a company. But CEOs who are able to guide their organizations through different stages of growth do typically share a common trait: they understand how they can contribute and how they can build a team around them to achieve that growth.

"Growing" companies are those that are no longer in the start-up phase but haven't yet become established, multidimensional businesses. Growing businesses are still evolving quarter by quarter, or even month by month, and must continue to adapt to quickly changing circumstances surrounding the business.

The dynamics of a growing company require the CEO to play a different role. In a start-up, the CEO is usually the jack of all trades, grabbing the business by the neck and doing everything he or she can to grow the business into a sustainable company. Growth stems from the CEO, rather than around the CEO.

In an established consistently performing company, the CEO has a clear line of sight into business units and organizational accountabilities. Each of those subordinates and units likely has the capability to operate independently based on established processes. Growth comes from investing capital and resources in specific opportunities. The CEO's job is to set priorities, approve decisions, and oversee management.

The growing company is different. The organization is large enough that the CEO is no longer aware of every action and decision that takes place, but he or she has not yet established organizational processes or sometimes even clear accountabilities. The CEO no longer has the ability to put the business on his or her shoulders. Growth requires a team of people to contribute in a well-coordinated fashion.

As we talk with more CEOs who are building businesses, we find that the key challenge for them is building a team that can create the same growth as a nimble start-up. They can no longer do it alone and create the same growth rate that a smaller business does. They find themselves looking around the room at their team and piecing together an organization structure that leverages each of the individuals' strengths to collectively create the same rapid growth of a start-up.

But it's not easy. When businesses are growing at 30% to 40% or more, they are a different business at the end of the year than they were at the beginning. The CEO needs to stay on top of this evolution and build a structure that achieves the growth. In many cases, their own role will change day-to-day as they build a team around them.

What are your experiences with established, growing business? How have you managed the challenges of different growth stages? Share your thoughts and successes with us at karlandbill@avondalestrategicpartners.com.

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. @karlstark