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How To Manage Your Organization’s Growth

By Michael VanBruaene, Big4.com Guest BloggerGears interlocking

Growth, particularly when it’s steep and occurs quickly, can substantially strain your organization; and negatively impact customers, finances, business processes and employee effectiveness and morale.  And you may find yourself continually compelled to resolve too many daily problems resulting from the growth.  To effectively manage your growth focus on the following organizational areas:

Why You Started Your Organization/Company.  What did you/do you want to achieve; what is your vision; what was your big idea?  Why this is important and what is the value you want to deliver?   Are these objectives still relevant or do you need to rethink your objectives and intentions?

Reasons You Have Been Successful.  What caused this fast growth to occur?  What have you done well?  How have you/do you satisfy and delight your customers?  Can you continue and improve on these reasons?

Essential Processes And Activities.  Keep your attention on your fundamental processes and activities.  Do not become distracted.  With fast growth there can be exhilaration and excitement with the growth per se that creates dangerous distraction from organization basics – processes, priorities, organizational values, core competencies, service deliver, etc.

Current Services/Products.  Ensure that all of your services / products continue to be high quality; do not neglect them as you focus on new services/products, even if at some point in the future they may be dropped.  If you are intending to drop certain services and products it should be done in a planned and deliberate manner that includes informing your customers in advance.

Current Customers.  Be sure to take care of your current customers.  Even if a customer’s strategic importance will diminish you do not want to be perceived as lacking in customer service, even if you have superior products.  Eventually, poor customer service, even for unimportant customers will be communicated to the marketplace and this will affect the desire for your services/produces by new customers.  It also indicates that in the long run you are not really focused on your customers; which can provide an opening for your competition to take away current and future customers.

Keep your customers informed of the growth and assure them that service/product quality will not be impaired – and make sure you back this up with your actions.  Your messaging to clients/customers should include the theme that the growth is due to the high quality of the organization, its services/products and its customers, and that they can feel good being associated with you.

Costs.  Expansion normally includes higher expenditures in advance of increased revenue.   It’s important to pay close attention to your operating costs, know what they are and effectively manage them.  However, keep in mind that too much focus on cost control can unnecessarily dampen your expansion opportunity.  In general, it’s better to focus on increasing revenues and accept that there may be some expenditure mistakes or excesses.  This also includes the working capital you need for your daily operations.

Other Financial Indicators.  Closely monitor revenue, including cash available, status of accounts receivable, inventory, and other metrics specific to your business.

Long Term Perspective.  With fast growth it makes sense to be focused on near term objectives and taking advantage of immediate opportunities.  Nevertheless, you should develop a long term perspective.  For example, what are practical scenarios as to how your services/products will evolve, how will your organization evolve; how will your customers evolve?  What / where is the end result of the growth? Will there be a plateau in the growth?

Employees.  They are a very important organization resource, and in most organizations you’re largest.  Keep everyone informed- all of your employees, not just those directly involved in the growth, on the status of your growth and related organizational changes.   They will be more effective and efficient, and willing to accept change if you keep them informed.

Also monitor employee energy/stress / fatigue for those employees directly involved in the growth; many times there are employees who really enjoy the rush of the fast growth, but eventually they may fatigue along with diminished decision making and effectiveness.  In general employee weariness should be expected and may occur at different points in time and different ways depending on the specific employee and related circumstances.  And keep in mind that their personal lives will also be a factor – positively and negatively.  As necessary, you must address employee issues with one-on-one discussions or organization wide initiatives.

Do a good job of on-boarding new employees who become key participants in the fast growth.  Do more than just on-the-job-training and orientation. You want to make sure that they can quickly make a strong and positive impact on your growth.

Board Functioning (If there is a Board).  Fast growth can affect Board processes and its relationship with the CEO.  With the fast growth the Board may now need to reevaluate the responsibilities of certain committees, particularly those focused on organizations services and products.  With the fast growth the organization may now have more employees and locations; and more services and products for which the Board has to adjust it perspectives, focus and assumptions.  In the past the Board may have been able to intuitively know about organization operations; however with the fast growth this may no longer be possible.  How will it continue to provide effective governance with this broadening of its required attention?  Will its priorities have to be adjusted?

Board and CEO Relations.  The relationship between the Board and CEO may require an adjustment.  For example, the content of reporting by the CEO at Board meetings may have to be at a higher level, with less detail, to accommodate Board meeting agendas.  The hard copy of a report may have necessary detail; however the verbal presentation would be at a “higher level”.  And there is simply for information to read and digest.  Also, the increase in information related to the new growth that has to be discussed at Board meetings can become overwhelming and lead to misunderstandings between the Board and CEO.   The Board may also become concerned that there may too much new growth and that the organization may not be sufficiently focused on its fundamentals, even if the CEO is effectively managing organization fundamentals.   To counter these challenges, consideration should be given to having special Board meetings at which the Board and CEO consider and discuss organization status and also address mutual concerns that may have arisen.

Measuring Organization Performance.  Keep your focus on key metrics that you have been using for current operations; measures that you used prior to the fast growth phase.  Continue to confirm that they still serve their purpose.  Also, make sure that the data you are using is valid and accurate.

Accountability.  Maintain accountability throughout the organization at all levels.  Everyone must hold themselves accountable for their responsibilities and commitments.

Technology.  Your IT department is important for your success.  Organization technology systems, applications and hardware must keep pace and be ahead of your growth.  Make sure IT is a key member of the management team and included in your entire decision making in its initial stages, not just when the decision has been made.

Risk/Problem Identification And Management.  It’s important to know that all organizational mistakes and problems are not equal and all of them do not require the same attention and organization resources.  You need to develop some guidelines for identifying and resolving these problems.

Make time to identify “what could go wrong”, its likelihood of occurring and the size of its potential impact on your organization.  The results of this effort can help you determine the extent to which you address problems that arise.  For some problems you will want to commit substantial organizational resources to resolving them, other problems will require minimal resources for their resolution; or maybe pretty much ignored.

Michael VanBruaene was a KPMG Director and blogs at  Michael VanBruaene – Working With CEO’s And Executives To Improve Their Organizations.  (www.AdvancingYourOrganization.com). He can be contacted at mvanbruaene@pacbell.net.

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