With Success Comes Crisis

Business growth is multi-faceted and can bring in a raft of both positive and detrimental impacts to your organisation. Sure, with more clients you’ve got more resources to pool together to expand the scope of your business – either with staff or operations – but you’re also entering one of the most perilous phases in the lifespan of your business. The conundrum is this: you need to at the very minimum maintain, hopefully, expand upon the promises you’ve made to your existing customers, and ensure the level of service you provide never goes south. This becomes trickier as the business expands, as the focus of management and indeed the CEO can be in other areas; be them future products, improving existing systems, or searching for more capital to continue the expansion.

This is a particularly vital time for the founder and/or the CEO. Following a period of growth, their ability to engage in all aspects of operations are going to diminish. While at its genesis the CEO might have been management, marketer, product designer and everything more if the business is chugging along nicely – expanding – that same attention to detail will become unachievable. As he or she is physically unable to monitor, and in turn adapt the business’ operations, quite often a void opens up between the promises made by your company to your clients and the operations that are required to act upon those promises.

This is the identity crisis we’re talking about. That shift in paradigm between your operations – and the promises you’re making to customers – as a small business that is moving toward bigger things. Those bigger things are not necessarily better though, as you’ll discover.

For inspiration, we’ll look to Doug Tatum’s work in “No Man’s Land”. Tatum talks of growth being something that can spur a business’ misalignment with the market; something that could ultimately prove the demise of your company. He opens up a chapter in his book with the statement that “growing out of touch with customer needs – or ‘market misalignment’ – is the most fundamental peril facing firms.”

Tatum adds that “recover[ing] something of this original strategic vision” is an absolutely non-negotiable imperative. Customers were initially drawn to your business because of these principles, and it operated on an exchange of these customers buying into your vision. With the growth of your business, the plethora of obstacles and obligations grow exponentially, and it’s important to acknowledge this as you grow, and attempt to keep some of that original vision intact.

If you need to pivot, go right ahead. But if you are pivoting your core business principles and operations, you need to make it clear to your existing companies of that change, and market your new focus to future clients.

In “No Man’s Land”, Doug Tatum pauses between chapters with a ‘reality check’. One of the more significant reality checks in regard to a possible identity crisis in your business goes as follows: Ask your management team whether your firm has made promises to customers that should not have been made. Then ask whether the firm has neglected to make promises that should have been made.”

Asking your management teams these questions will help you refine your alignment with the market. Misalignment can prove fatal to businesses that are expanding, and without noticing become misaligned from their customer base, often with a new focus, or a new set of operations that were put in place to improve profitability, but ultimately harmed existing customers.

The key, as Doug Tatum explains is “for you as the leader to make the right decisions that lead to a growing and profitable customer base. Deciding which promises to make to which customers are strategic planning in its essence.”

Peter Drucker elaborates on this point in his book Management: Tasks, Responsibilities, Practices with the statement that: “Management has no choice but to anticipate the future, and attempt to mould it, and to balance short-range and long-range goals.”

Quite often, part of the stress on to the CEO can be alleviated with the delegation of some responsibilities to existing management, or perhaps the recruitment of more staff to lift the weight of that burden from the CEOs shoulders. If that visionary in the company is becoming bogged-down with bureaucratic, red-tape elements that are part and parcel of the expansion, it might be time to delegate some new responsibilities to existing staff, so that visionary-figure in the business can better focus on that role, rather than minutiae.

Identity crises such as this are an almost inescapable reality of doing business- particularly for those that are expanding. Facing this identity crisis head-on is one of the best means for your business to stay true to its original guiding principles, and make sure that the list of promises your first set of customers bought into remains intact. Businesses need to evolve to the needs and desires of new customers, and you need to be aware of this, particularly if you’re entering a stage of growth that puts your existing set of operations and guiding principles to the test.

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