Copyright Exigent Ventures Ltd 2010-
Simply put sales can grow discretely and tends to be quite smooth as shown as the red curve. Organisations growth, by contrast, tends to be much more lumpy. This is because a certain staffing complement has a finite growth capacity and beyond that point just adding people doesn't help. In fact at some point adding people reduces performance. What is required is an organisational restructure which will create a step change in a companies ability to support its growth. However this is not easy to accomplish because most businesses address this problem too late. This often results in business growth reverting to the typical "lumpy" organisational restructure rather than a smooth increase. The reason for this is that sales now have to wait for the organisation to catch up so you tend to end up with a year of rapid growth followed by a year of of no growth or even negative growth.
Smaller Businesses tend to rely too heavily on a few key people, this results in a stagnation of performance of the remaining staff who have little or no chance to develop their skills. So when the time comes to reorganise the business owners or management are reluctant to make the step change necessary to reorganise the business because they cant see who, apart from the usual suspects, who will be able to take on additional responsibility. What this results in is either a re-
"Stay ahead of the Hammer!"
What does this mean in organisational terms? Below are some suggested key actions:
First; Always! Always Always! Implement a reorganisation ahead of its need. This gives you time to fine tune; it is also the only way you can maintain that rapid growth.
Second; Establish a model for organisational growth. That is how will your business deal will sustained and rapid growth. Your plan must also be able to estimate at what point (size of revenues) will you be needing to consider the next reorganisation.
Third; Reorganisations must have longevity. Typically a major reorganisation should last about 24 months, with interim adjustments taking place yearly. Recognise that reorganisations get bigger and more complex as you grow, so put in place a post reorganisation quality control process.
The challenge for a business in maintaining high growth is to grow the organisation consistently over time to match sales. In supporting businesses to understand and undertake this challenge in a knowledgeable way we are much more like to provide sustainable high growth businesses.
Organisational Growth is falling behind sales growth
|Definition of High Growth
|High Growth Challenge
|Strategy and Planning
|Financial Management and Control
|Systems and Processes
|The High Growth Challenge
|Matching Organisational and Sales Growth
|The Impact of Badly Managed Growth
|Its All About Culture
|Healthy Culture Delivers Better Business Performance
|Using Your Culture for Competitive Advantage
|Good Culture and Return on Investment
|Are You Winning on the Cultural Battleground?
|How a Strong Culture Improves Your ROI with New Recruits
|The Importance of Planning
|Getting Your Vision
|Building A Structured Sales Process
|How To Ruin Your Sales Efforts With One Question
|The 6 Signs of a Dysfunctional Board