Examining Organizational Growth: Successfully Crossing the Chasm

Untitled design (29)80% of businesses survived their first year of business. 

70% of businesses survived their second year of business.                       

50% of businesses survived their fifth year of business.

Organizational growth is challenging. With a 50% chance of failure entrepreneurs MUST know how to manage through cultural, operational, financial, people, infrastructure, and governance/risk/compliance challenges. These are “chasms” business leaders must cross in order to realize long-term success. This takes intentional planning, intestinal fortitude, and an ability to adapt. 

Below are present ways business leaders can maximize their chances to “cross the chasm.” These are not fool-proof guarantees, but they increase the likelihood of success.

Here are a few best practices organizations can implement to successfully “cross the chasm”:

Cultural Best Practices

  • Be intentional about clearly defining your purpose—Clearly defined mission, vision, and value statements must go beyond wall decorations and off-site retreat file folders. They must be the core of the why, what, how, where, who, and when of the organization’s existence. They must have the power to say “yes” and “no” to questions, challenges, and opportunities. These anchoring statements can guide an organization through turbulent times.
  • Be intentional about building, nurturing, and protecting your culture—Culture exists whether leaders acknowledge it or not. Leaders must do hard work to build/nurture/protect a healthy culture. When people, processes, structures, and/or governance threaten the culture, leaders must act quickly. Sometimes this means dismissing “toxic” all-stars, restructuring leadership teams, or abandoning outdated processes. This is hard but necessary work.
  • Tell lots of stories—Stories are powerful. Stories grip people and ingrain ideas. Look at Hollywood’s success. The film industry pumps out movie after movie following similar plot lines. A character(s) is introduced…s/he faces a problem…s/he goes on a journey to confront the problem…s/he battles internal and/or external foes…s/he overcomes problems…s/he resolves the problem. Organizations have similar stories. The “characters” (team-members) face internal and external challenges. When they overcome these, they become bigger, better, faster, and stronger. These stories make up the fabric of organizational culture. Tell and retell these stories to deepen cultural norms and expectations. Great leaders tell great stories.  

Operational Best Practices

  • Rethink policies, processes, and procedures as you grow…don’t just tack on quick fixes—There is danger in simply adding a step or two to this process or a one-off policy to that problem. When this is done without company-wide impact to overall organizational processes, policies, practices, and procedures, a hodge-podge of misaligned actions takes place. This creates confusion. Great leaders recognize the need to rethink how business is done. Sometimes, this requires overhauling entire systems. 
  • Be responsive to changing market winds…be ready for “luck” events—"Return on Luck,” as discussed by Jim Collins in Great by Choice, is the idea that “great companies are not generally luckier than the comparisons—they did not get more good luck, less bad luck, bigger spikes of luck, or better timing of luck. Instead, they got a higher return on luck, making more of their luck than others. The critical question is not, ‘Will you get luck?’ but what will you do with the luck that you get?” Opportunities will arise. Are you ready? Luck favors the prepared.
  • Know when to pivot—Sometimes, the market no longer wants what an organization must sell. Recall some past products that are no longer in high demand—horse and buggy, landline, VHS rental companies. Great organizations recognize when to pivot from one product or service to another one. Failure to recognize this leads to businesses closing or missing opportunities. 

Financial Best Practices

  • Cash flow management—Without cash, companies will not meet payroll or have money to produce products. It is essential to have a handle on how the organization makes, collects, accounts for, and spends money. As an organization grows, it must have people with high financial acumen to identify adverse cash trends early. 

People Best Practices

  • Hire great people (some that have been down the road before)—Everyone knows that hiring “top talent” is key to a prosperous organization. When growing, it is essential that organizations hire some people that have “been there and done that.” When marching from $25m to $100m in annual revenue, it is important to have some operational, financial, and people leaders, who have walked that road. They will be key players in identifying pitfalls, opportunities, and minimizing drastic mistakes before they happen. Growing from a small business to a corporation is fun, but if everyone is a novice than the potential to falter becomes more real. There is value in having some “veterans” on the team.
  • Keep great people—During times of growth and change, organizations risk losing top talent. Recruiters contact your “A” players. If people do not see how they are part of something big and have a strong sense of belonging, there is a great chance they may leave. Leaders must reinforce the role each “A” player has on the team and how that person is paramount to growth.
  • Build a strong talent bench—Growth necessitates new roles. As organizations grow, new types of positions will emerge. In the past, there was no need for a Chief Talent Officer, Chief Financial Officer, or VP of Customer Experience. Due to growth, these may be realities. Simply “posting and praying” that the right person will emerge rarely results in good outcomes. Rather, knowing people, who could join the team is essential. The quicker hiring well takes place, the faster the organization can run.
  • Create a strong leadership team and know when to restructure it—Aligned, united, and dedicated leaders must exhibit high-energy, competence, and positive character to the organization. Sometimes, leaders outgrow leadership positions. Other times, the way leaders structurally lead needs to change. This is hard, and the best leaders recognize their short-comings and do not have egos. Sometimes a great number two recognizes that s/he would be a better number ten. At large, it is important that leadership teams have the right people to grow the business. Such teams will look different at $10m in annual revenue versus $100m in annual revenue. Knowing when to restructure is essential.
  • Utilize multiple communication channels and “blast” out a common message—Clear and consistent communication is always key. Nothing will derail and/or delay growth efforts more than confusion. Confusion results due to poor communication. Remember, “communication” and “information sharing” are not the same thing. Just because someone “says” something does not mean the audience understands it. Leadership groups must develop “cascading messages” that each team member embraces and shares with his/her team. That team then must share that same message with their teams. Also, it is important to utilize multiple communication tools such as intranets, newsletters, team meetings, 1:1 meetings, et cetera to ensure consistent and holistic communications. 
  • Learn to delegate…but do not take your eye off important details—It is vital that leaders pass along certain duties to well-trained team-members. It is impossible for leaders to hold onto every aspect of the company. However, leaders must create feedback and accountability loops that allow them to know where the organization is at all times. For instance, leaders should receive regular reports highlighting key performance indicators in the areas of finances, operations, people, infrastructure, and governance. Furthermore, there should be regular checks to ensure the data is accurate and timely.

Infrastructure Best Practices

  • Invest in right-sized infrastructure—IT, equipment, office space, and other infrastructure needs must keep up with organizational growth. It is easy to grow and fail due to not having the right tools to remain efficient, effective, and secure. For instance, without the proper IT oversight and tools, cyber-attacks can cripple operational aims.
  • Combat cyber risks early and often—As an organization grows, cyber-attacks will increase. Organizations risk losing valuable data and find themselves needing to repair their reputations. Addressing cyber-attacks proactively helps to minimize lost time, money, resources, and reputation. 

Governance, Risk, and Compliance Best Practices

  • Build proactive GRC policies, best practices, and procedures before a legal or compliance event surfaces—Legal issues will arise. Complaints will be filed. Assessing, building, and testing various governance, risk, and compliance items is essential. Having outside consultants and auditors test the organization’s current state and help build a stronger future state is needed. Not only must an organization build strong processes and practices but also train supervisors and workers accordingly. Not doing so opens the door to distractions, which could lead to fines, lawsuits, and penalties. If not dealt with properly, these could shut an organization’s doors.

With the right planning, follow-through, and assessment, organizations can prepare to weather inevitable storms caused by growth. Yes, organizations have a 50% chance of closing their doors after five years. BUT, they also have a 50% chance of flourishing! Do not just take a “leap” to cross the chasm. Rather, take a calculated and planned leap that improves the chances of long-term, sustainable growth. Have fun and go cross those chasms! 


Need assistance with addressing short and long term HR needs for your business? Contact me at steve.black@brixeyandmeyer.com, and we will address them proactively.

Disclaimer: This blog is not legal advice, but merely informed opinion or general information meant for no particular purpose. Issues addressed in this blog often implicate federal, state, and local labor and employment laws. This blog is not intended as a substitute for legal advice. Readers should consult labor and employment counsel to determine whether their particular policies, procedures, decisions, or courses of action comply with such laws. 

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