A few weeks ago I was consulting with the CEO of a small business who was bemoaning the fact that his company no longer felt like "a family." He pondered out loud, posing the question "What happened?" He was puzzled as to why the old ways were no longer working. 

"That's an easy one," I replied. "You are in the predictable breakdowns of a growing company." 

When startups, small businesses and even mid-cap companies begin to experience significant expansion, they often notice a distinct point at which they pass a plateau in their growth where what worked below the plateau --no longer works above it. 

For a number of years I worked with Inc. Magazine as a judge in their Positive Performer Awards and had the opportunity to study how growing companies deal with the changes that come with progress. Time and again I saw that the challenges occurred in four specific areas: culture, strategy, structure, and management. 

Left unattended these areas can interfere with healthy growth and have a negative impact on morale, employee retention and profitability. The key is to identify when your business has reached this critical point and address these four pillars of growth so that you can build a solid foundation upon which your business can continue to develop with excellence and ease. 

Culture

As a company grows, the transference of culture --which happens naturally when small --requires a good deal more definition and formalization.  

One of the important actions to take in order to address this issue is to create an agreed-upon company vision statement that fleshes out the core values, brand value and purpose of the business. 

As simple and obvious as this may seem, many companies don't formalize their mission, because when small, culture happens by osmosis. The problem is that as you add more staff, and more layers between the founder(s) and the employees, the message can become diluted--and corrupted. Other critical actions for addressing culture in a growing company include: 

  • Revising and/or creating reward and recognition programs that mirror your values.  Remember the old saying "What gets rewarded is what gets done." Failing to acknowledge and reward staff who work consistent with the vision, or allowing those who don't to keep working on as if nothing is wrong, undermines the company culture you are looking to create. 
  • Creating formal feedback channels. When your company is made up of five people who all work in the same room, feedback is not a problem. But as companies grow, the need to create a more formal network for the sharing of information is paramount.  Lunch-and-learn sessions, all-hands meetings, employee attitude surveys and other means of keeping the communication flowing keep you close to the real stuff going on inside your business. 

Strategy 

As a starting point, it's critically important to make a clear distinction between a mission or vision and goals and strategy --and their relationship to each other. Growing companies require the formulation of long-range organizational goals, as well as a short-term strategic plan.   

Structure 

Of all these areas, structure is often the one that requires the most intensive effort.  

Everything from how you hire and create job descriptions to conducting performance reviews and your organizational chart needs to be designed as needed to support company growth. Some of the most common areas for evaluation and development include: 

  • Review and redesign of job descriptions and accountabilities as necessary to ensure that clear, focused criteria are established.
  • Design and implementation of standards.          
  • Designing performance reviews that support and encourage a combination of efficiency and quality and mirror the company mission, values and goals. 
  • Putting problem solving teams in place to address the processes and policies that may have outlived their usefulness. 

Management              

Just as a company can outgrow its current structure, individual mangers and even the founder can outgrow their management capabilities. Several key actions are necessary, including: 

  • Conducting an individual assessment of each participant's management style and its impact on the organization, learning gaps to be addressed, and overall suitability for their current role within the company. 
  • Identification of each manager's departmental commitments, barriers to accomplishing them, and the development and initial implementation of a plan to resolve these barriers.
  • Establishing clearly defined accountabilities throughout the organization to foster increased communication and cooperation between departments and their leaders. 
  • Development of the core management group into a stronger, more unified team aligned on the corporate vision and goals. 

In my experience the sooner a company sets out to address these issues, the less of a deleterious impact they have on the overall business health. The trick is to recognize when your company has hit that plateau, that place where the cultural, strategic, structural and managerial ways that have worked in the past no longer serve you.

Embracing these changes as the natural and normal approach to the growing pains of your business puts you one step ahead of the game, and on the path to continued expansion by design instead of default.