Who would not want to be part of an organization that is growing quickly? In the life of an organization, one of the most interesting, exciting, and yet stressful times can be when the organization is booming with growth, expanding in staff, and processing orders and rolling out product or services as quickly as possible. I am describing the “Go-Go” stage of the corporate life cycle which is also sometimes referred to as the “wild west” stage. In this post, I want to specifically examine the normal problems you should expect to experience in the Go-Go life cycle stage and also discuss the dangers that may arise if these normal problems go unchecked and become abnormal problems that threaten the health of the organization.
Arriving at the Go-Go Stage
When an organization arrives at the Go-Go stage, this means that the business concept has proven to be quite viable and is well beyond only gaining traction. It’s “game on” time for the business and the wheels are starting to turn faster and faster. The focus is no longer surviving through the difficult times of trying to gain sales while maintaining some form of financial health. In the Go-Go stage, ownership and current leadership starts to see what seem to be endless opportunities for additional sales, additional ideas, and certainly additional resource needs that require investment. This creates a crucial period in the life of the organization where decisions regarding priorities, focus, investments, leadership, and true mission and vision become uniquely critical.
Predicting, Embracing and Addressing the Normal Go-Go Problems
The good news is that if you are currently in a Go-Go stage company, or if your company is not quite there yet, there are predictable normal problems that you will face and, in fact, you must face, in order to continue to transition through the life cycle towards PRIME. There are also some traps that your organization may fall into that may prematurely age the organization (i.e., aging and possibly early death) or lead to abnormal problems that cause the organization to flounder and stall at this stage or fall back into the adolescent stage. Let’s take a look at some of the common problems and traps that might exist at the Go-Go life cycle stage.
Every Sales is a Good Sale
In the Go-Go organization, sales are a given. Sales are happening and moving quickly. It is easy in this stage to forget that not all sales are the same. At some point, someone has to start paying attention to sales margins, delivery capacity as it relates to customer satisfaction, and certainly quality. No one wants to wake up and suddenly discover that you can’t deliver what you are selling due to a lack of capacity or resources. Also, no one wants to discover that while chasing what seems to be a never ending demand to purchase that the company is cash-strapped because of a lack of attention to pricing, sales expense, and cost of goods. If this “wild west” of selling everything possible goes unchecked by the creation of analytics, controls, and proper management, early success can quickly lead to an implosion due to a lack of quality or delivery. If the organization leadership over-reacts and adds too much capacity or additional human resources, not considering the delay that may exist between supply and demand, a different type of implosion may occur where too much inventory or capacity exists.
Eagerness and Plural Priorities
Another common problem in the Go-Go stage is that there is so much going on and so many priorities and the growing organization is eager to do everything. Everything seems important and there is so much excitement in the organization that people simply attempt to do too much. The founder, or key founding members, will need to bring some focus to what is really important for the now and future of the organization. This is the time to ensure that the organization stays true to its mission and pays attention to tasks and goals that are adding real value to the organization and furthering the success of the organization. Failure to bring some order to the madness of plural priorities can easily lead to such a lack of focus that truly key priorities get half-done or simply fall through the cracks. With multiple priorities, cash are resources are being spread so thin that it presents a true danger to the growth that truly needs investment.
Lack of Structure
The founder and key early leaders in the organization run from priority to priority and struggle with delegation. They over-delegate and then want control, or they just try and do everything themselves. When delegation does occur, many times this is done based on just who is available to handle a task vs. a real structure for delegating based on accountability or departmental responsibility. It is imperative that some true structures start to emerge within the organization and that the founder and founding leaders truly empower leaders of those structures to manage and be accountable for their priorities. The work simply cannot be done or approved by a few people and the answer to “who is in charge?” must start to evolve into true operating structures that work together. Failure to bring structure to the organization will fuel more chaos and allow far too much room for poor decision making that lacks the bigger-picture view of the organization.
We Have the Money to Spend
Members of a Go-Go organization likely believe that money is always available to spend. I mean, sales are always upward, so we need to keep spending money to generate more opportunity, keep people happy, and demonstrate our success to anyone watching. The Go-Go stage is that stage of development where true financial management must start impacting the business. Without putting too much control in place that squelches the excitement, the founder needs to ensure that the financial professionals are being integrated into pricing decisions, investment decisions, and implementing some financial controls that protect the growth of the organization. The failure to do this well usually results in over-compensation, over-staffing, out of control T&E, over spending in technology (everyone gets new STUFF), and reduction in the expected or desired profit margin.
Confusing Communication Channels
“Who said that?”… “I didn’t know that.“… “Are we supposed to be working on this?”… – these are sentences that might reveal a common problem in a Go-Go stage organization. There is simply not enough focused communication. There is a lot of communicating going on indeed, but usually the communications is very informal, not organized well, and lacking focus. The Go-Go stage is fun, so why bog that down with meetings, formal communications, etc.? The Go-Go stage is exactly the stage where you must ensure there are regular and structured meetings so that people get on the same page. This is the right stage to learn how to consistently communicate the shared vision of the organization and keep people focused on that vision. This is the right stage to coach and mentor leaders to communicate (talking and listening) effectively so that everyone takes steps forward together vs. a lot of running around. Failure to communicate well will again lead to chaos, many different disconnected activities going on, and confusion about who is doing what and why.
Founder’s Trap
By far, one of the biggest threats to the Go-Go stage organization is the founder’s Trap and this relates back to the discussions above on priorities, delegation, and structure. By the time the organization reaches the Go-Go stage, the founder generally is feeling uneasy about maintaining control, but also likely does not have a clear sense of how to handle this. The founder may announce that the organization is too big for one person to control and that he/she is now delegating to others based on the new structure, but then at the same time the founder may still want people to check in with him/her on decisions. You can see the trap. The founder is losing control, but still wants to control. The organization may start to feel that the founder is a bottleneck and that things can’t get done as quickly as possible. The founder is trapped in wanting to be as involved with his/her “baby” as when the organization was smaller but knows this is not really possible. If this issue is not resolved, the organization can indeed get choked by its very founder. Another side of this trap may be felt if the founder simply checks out. Some founders get more and more remote and losing control causes them to simply put all trust in a new management structure while disengaging from the organization, or even selling the organization (divorce). The results of this move will vary greatly based on (a) the new management structure, and (b) the value of the founder’s entrepreneurial spirit and skills to the organization. They key for success here will be whether there is ample and active entrepreneurial skill left in the organization. If not, this might cause the organization to move too fast towards “controls” and without the entrepreneurial force present, age prematurely, limiting the growth of the organization.
One important note on this discussion of the Founder’s Trap – for every organization founder, this will occur. It is predictable as an organization outgrows the desire, capacity, or both, of one person. The outcome of the Founder’s Trap will rest in the ability of the founder to either (a) find the balance of involvement and true delegation, or (b) find the right person or team to replace the founder.
Growth Can be Painful
Organizational growth can indeed be painful and difficult, just like our experiences in growing up as humans. Each stage of the organizational life cycle has unique challenges. The Go-Go stage is no different. The Go-Go stage is exciting, full of growth, and likely one of the most dynamic stages in an organization’s development. At the same time, the problems discussed above will occur and must be dealt with in order to ensure growth is not limited, stifled, or so unbridled that the consequences are overly harmful to the development of the organization. Of course, the good news is that as these Go-Go stage issues are anticipated and met with realistic solutions, the organization can grow to the optimal PRIME stage where everything is working at its best.
