Their growth had been slow but steady up until March, 2007.
They had seemed to remain ‘under the radar’ of larger competitors and the CEO had kept her hands on the operations over the past 9 years, steering a course that brought good profits, creating a working environment that people seemed to enjoy as turnover was low, and maintaining solid sales through customer referrals.
Starting in October, 2007 her world started to shift. Two new clients had come on board and at first glance, she didn’t treat the addition of these two clients any differently than she had in the past. She did add more staff to handle the increased work load – a change that took them from a Stage 4 company, with 54 employees to a Stage 5 company practically overnight.
Subtle challenges had been nagging at the back of her mind for months which she tended to ignore because her ability to handle the company’s growth up to this time hadn’t created any real issues – at least none she didn’t feel they couldn’t deal with effectively.
She started to hire new people and buy new equipment and remodel their space. What she didn’t do was take a solid look at the processes and procedures that had been in place for the past several years. What she failed to recognize was that she was getting ready to experience a Wind Tunnel. She would quickly discover that the methodologies that she had used to navigate her company to this stage of growth were not going to help her in the next stage of growth.
Her staff had started complaining more often that it was harder to manage project work. Seems like people weren’t sure exactly what their roles were or who was responsible for what. Meetings were unorganized and inefficient and it seemed the same client and project, as well as administrative problems kept reoccurring. The integration of new employees into the culture was creating problems because the new employees were questioning how work was done, making the employees that had been there for a long time resentful and defensive.
Two of her managers were struggling – people that had been at the company a long time – seems they couldn’t find time to really manage their direct reports. They felt they weren’t spending enough time in the operations of their divisions, staying hands-on, making sure things ran smoothly. More and more they were in her office complaining about staff issues.
The first sign of trouble came with the recognition that her financial systems weren’t sophisticated enough to handle the reporting and tracking she would need to satisfy the requirements of the new customers. The new customers wanted to receive project updates on a regular basis, showing milestones met financially compared to project milestones in order to evaluate how efficiently the company was managing budgets and timelines.
The next sign of trouble came when projects started losing money. The amount of employees on board made it almost impossible to manage workflow as it had been done in the past. The company was struggling to keep up with the changes required to track the success of projects, allocate resources efficiently and deal with the conflict that was occurring throughout the organization because of unclear roles and responsibilities. Other more subtle issues were surfacing such as an effective hiring process and the ability to store and retrieve information effectively.
This company hit a Wind Tunnel as they moved from Stage 4 to Stage 5. If the CEO had been able to ‘predict’ when that Wind Tunnel was going to hit and even more importantly, know what it meant for the company as it grew, this CEO would have been able to adjust on the fly and accommodate the various changes that the addition of more people created. By recognizing that the company was on the verge of preparing to jump into a new stage of growth, that CEO could have been proactive and intentional as they grew.
By understanding they were moving into a Wind Tunnel, that CEO could have:
- Began the process of identifying ALL the various processes and procedures the company had been using
- Taken the time and energy to ARTICULATE what those processes and procedures were in order to capture the intelligence that existed in long time employees
- Started the activity of EVALUATING all those processes and procedures by asking three critical questions:
- Do we still need all of these processes and procedures?
- Which ones no longer assist us in being successful?
- Which ones do we need and how to we improve upon them?
By taking these three simple steps because this CEO understood the concepts of the 7 Stages of Growth, she could have evolved into a Stage 5 company with little or no interruption in the efficiencies the company had relied upon for so many years.