The Ride of Your Life

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So adaptability and opportunism are the keys to fast growth, yes? To win, one must embrace the long-held notion that, in business as in life, the only constant is change?

Well, not exactly. Almost a decade ago Jim Collins busted that myth in his best-selling book Built to Last. "A visionary company," he wrote, "almost religiously preserves its core ideology -- changing it seldom, if ever.... The basic purpose of a visionary company -- its reason for being -- can serve as a guiding beacon for centuries, like an enduring star on the horizon." So what gives? We know from the past two decades of research on Inc 500 companies that the majority of the organizations are hardly fast-growth stars that burn out after a few dazzling years. Rather, they stick around, and many become the household names at the heart of the American economy. So, if Collins was right, how can the bulk of Inc 500 companies change so much and yet do so well? Indeed, how can we possibly claim the reason for their outstanding growth is their embrace of change?

There are two clues to the answer. One, of course, lies in the bold ways in which the companies adapt to change, both the kind forced on them and the kind they choose. The other may well be even more important: it is that the Inc 500 CEO is by definition a persistent animal. Moreover, he or she instinctively knows where to direct that persistence: toward the survival of the company, not to the survival of the first big idea. Visionary CEOs, wrote Collins, must "be prepared to kill, revise, or evolve an idea ... but never give up on the company. If you equate the success of your company with success of a specific idea -- as many businesspeople do -- then you're more likely to give up on the company if that idea fails; and if that idea happens to succeed, you're more likely to have an emotional love affair with that idea and stick with it too long, when the company should be moving vigorously on to other things."

Progressing vigorously on to other things was just what Nolia Brandt wanted to do in 1998, when she persuaded her husband, Bill Brandt, to let her take the helm of their Tallahassee, Fla., information-technology company. Brandt Information Services (#481), which Bill had founded in 1985, had been chugging along fine since then with a solid customer base of Florida government agencies, 10 employees, and steady, if unimpressive, revenues. Here was a classic case of an idea that worked well -- but whose time had probably come and gone. Nolia had bigger things in mind.

Nolia Brandt took over her husband's role as CEO. He got a backseat, a bruised ego, and a rapidly expanding company in return.

Nolia, then a part-time vice-president at the business, had been pushing Bill for years to grow the company. Now that they were approaching their fifties, the time seemed right. The government market, which was interested in harnessing the power of new technology, was hungry for their services. Nolia, a perpetual student, was completing a Ph.D. program -- a multidisciplinary melange of studies in human-resources development, organization theory, and economics -- and she was eager to apply what she had learned. "If we ever want to grow this company," she declared to Bill, "we should do it now."

There was just one ticklish problem: Bill was, by his own admission, ill suited to company-building tasks. "He's technically brilliant," observes Nolia, "but he doesn't like handling personnel issues, recruiting, strategic planning, and organizing." Nolia does. The couple agreed to switch roles; Nolia became president and CEO, and Bill became director of technology and a vice-president. They even restructured the company's ownership, putting a majority of shares in Nolia's name (a strategy that would also allow the company to qualify for government contracts for female business owners).

Not surprisingly, the couple struggled with the transition. "There are certain ego issues you have to get over," says Bill, who admits to having a stomach pang the first time he had to tell his longtime employees to "check with Nolia."

The company, which was then bringing in approximately half a million dollars in revenues, had been plagued by thin margins but had always operated debt free; Nolia was determined to grow it on cash flow. A government conference on supplier diversity opened her eyes to outsourcing, which she saw as a cost-effective way to add functions that the company had previously done without. She found companies to help her with financial forecasting, marketing, and strategic planning; she also outsourced payroll and human resources. To help her navigate Florida's government bureaucracy, she hired a political adviser, who taught her how to keep abreast of legislative changes that would affect how she sold her consulting services to government clients. She went to the Jim Moran Institute for Global Entrepreneurship, at Florida State University, and asked its executive director, Jerry Osteryoung, to teach her how to analyze a spreadsheet, market her company, and price her services. "If you have to learn just through trial and error, it's going to be very slow," she says. "If you can take a course or hire good advisers, then the learning curve is shortened."

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Donna Fenn

Inc. contributing editor Donna Fenn is the author of Upstarts! How GenY Entrepreneurs are Rocking the World of Business and 8 Ways You Can Profit From Their Success (McGraw-Hill, 2009). Both this blog and the book examine the ways in which GenY is changing the entrepreneurial landscape with new approaches to starting, growing, and managing their companies. Learn more at http://www.upstartsrock.com/.

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