This week F&D had our latest entrepreneur event: Growth Game Changers. The executives on the panel represented businesses at different stages of maturity that have followed different growth trajectories.
Modo Modo Agency was named one of the fastest growing women-lead businesses in Atlanta in 2010. The agency’s founder, Moira Vetter, has a bird’s eye view on growth as a serial entrepreneur whose firm focuses on helping other entrepreneurial businesses. She has recently written a book titled “AdVenture: An Outsider’s Inside View of Getting an Entrepreneur to Market.”
Business Wise represented a more measured approach to growth. This 34 year old company, lead by founder Debra Kline, has evolved with the needs of customers and the emergence of new technology, expanding both services and geographic scope.
And finally there was Jenny Bloom, the CFO of MailChimp. MailChimp has experienced tremendous annual growth for five years in a row, rapidly emerging as a leader in the email marketing industry.
So what did this diverse set of leaders have to share? Three themes emerged as they discussed the game changers of growth.
Know what you want to be, and be willing to say “that’s not us.” As your business grows it can be tempting to jump on opportunities that arise along the way that are not quite what you originally envisioned for the company. After all, you can make money in a variety of ways. Adding services makes sense, right?
But what if the new service pulls your focus away from what makes your company unique? Or if it just doesn’t work within an already successful business model? If something requires an approach to service or an area of expertise that you don’t see when you take an honest look at the company, it may be a bad move that erodes your focus and confuses your strategic positioning.
This doesn’t mean you won’t evolve, but rather that your evolution stays true to what made you unique and successful from the beginning. A strong strategy encompasses what you won’t pursue as well as what you will.
Michael Porter, Harvard professor and author of multiple books regarding strategy agrees. As he puts it, “The essence of strategy is choosing what not to do.”
The people factor will make or break your performance. When asked about the greatest challenge they face in growing the business these three very different businesses all cited the same issue: finding the right people.
In a very rapid growth business, finding enough qualified people and getting them properly trained and integrated into the culture is a daily challenge that can constrain growth or erode performance. In a slower-growth business finding the right technical and sales talent remains a critical factor because those people must deliver on the brand’s service quality promise. In a creative agency environment every new person has an impact on the entire culture.
Vetter noted a twist on the people issue as the business grows. The people who comprise the right team for the business in its earliest stages may not be the right team for the next stage of growth. As Vetter put it, “there are different challenges at different stages: the start up, the adolescent, the growth company and the mature company.” Each stage has critical needs, but the needs evolve with the company. Often that means the team needs to evolve as well.
And then there’s culture. How in the world do you manage it?
Creating and sustaining culture is the toughest dimension to the people challenge for every business. But as business guru Peter Drucker famously said, “Culture eats strategy for breakfast.”
Most start up businesses love the work environment they’ve created and they talk warmly about their culture. The difficulty is understanding 1) what the important aspects of the culture are, 2) which behaviors drive those aspects and then 3) taking action to preserve those values as the company grows. If the company grows from 10 to 100 to 1,000 people the way people interact will naturally and necessarily transform to meet the needs of the business.
Communicating values and “how we do things” to the expanding team must become a priority for the top team or you will see the emergence of subcultures within the company that may supplant the original culture. Each person needs to have the same shared understanding of the company’s mission.
One of the tactics the panelists each cited for helping to manage culture was developing a hiring process that included screening for personality factors that indicate a good match with the culture. In some small companies founders continue to interview new hires for as long as possible. Others use a variety of tests and questionnaires to try to understand how an individual would mesh within the organization. Time spent during the hiring process will help you avoid angst and upheaval created by a firing process down the road.
Of course there are an infinite number of actions taken by business leaders that could turn into true game changers. Three of them were the focus of our panel: be willing to turn away from a move that takes you off-strategy, focus on your people and be thoughtful about what you are doing to lead and preserve the culture.
About the blogger. Adelle Erdman is Frazier & Deeter’s Chief Marketing Guru.