Why complexity is your company’s worst enemy
Presented by TriNet
The more complex a business becomes as it grows, the harder it is to grow. Join this VB Live event to learn more about the symptoms of too-fast growth, plus practical strategies to reconnect to a bold purpose and mission, energize your team, and more.
Reserve your spot here for free.
As we come out of the worst of the pandemic and return to something approaching normal, many small to medium-sized businesses aren’t just surviving any more — they’re thriving. But the one thing a company can lose sight of in the pursuit of growth, is the principle that the bigger they become, the more difficult it is to succeed, says Kristine Gunn, executive director, talent and organizational management, at TriNet.
“We call it the growth paradox,” Gunn says. “The faster you grow, the harder it is to grow. Very few businesses actually succeed over a sustained period of time.”
The symptoms and consequences of too-fast growth
External challenges are obvious, and market dynamics can’t be ignored. But most big breakdowns are not always visible to leaders. They’re internal issues causing a drag on the organization, Gunn says.
Some symptoms of too-fast growth include stalled profitability, slowing sales, increased bureaucracy, and falling behind on the innovation curve. Another hallmark is starting to outgrow infrastructure, and so growth stalls out.
But the biggest problems are internal politics, bad corporate culture, and dropping employee morale. Employees begin to lose sight of their purpose in the organization, get frustrated with the lack of clarity and the amount of red tape, and start to suffer from change fatigue, and talent starts to exit.
Perhaps even more important, she says, is beginning to lose touch with customers, and starting to drift in terms of customer needs. Too often, an organization may just lose sight of customers, getting so busy in the day-to-day operations of the business that they no longer remember their initial big purpose. Bain calls this the founder’s mentality.
“You have that bright founder who came into the business, had a passionate idea and a vision and brought a bunch of people along, but as the company starts to grow, we see that drift,” she says. “Companies can lose touch with their customers. They lose sight of the meaning, the purpose of the company. Why were they in business in the first place?”
They can also start to lose focus on their core competencies, or fall prey to the shiny object syndrome. They think, for instance, we’re so good at making toys, so why wouldn’t we make great performance wear also? In other words, they can lose sight of their core capabilities that made them special and differentiated in the first place.
“Most important, the leadership team just does not have the pulse of the business,” says Gunn. “They’re just putting out fires. They’re working in the business instead of on the business. They may not have the leadership capabilities that they need to take it to the next level.”
How to foster solid, sustainable growth
For real growth, the leadership team has to be asking the critical questions, to make sure that the company is not stepping over some major challenges that could come as they grow or introduce new product lines.
“This is where it’s critical to have what Deloitte calls the symphonic leadership team, where there’s a lot of alignment and a lot of trust along that leadership team,” she says. “They’re having the conversations they need to. They’re also factoring in the complexities of growth. Sometimes growth isn’t the best decision.”
It’s key to be clear on the difference between the ambition of the company and also what it can actually achieve. That means making sure to really analyze and assess the internal and external impacts, and using tools like SWOT analysis, just to start. In other words, what are the strengths, weaknesses, opportunities, and threats? And are these things can be overcome?
It’s also essential to look at the external variables at work in the world, especially now, she adds. A PESTLE analysis is extremely useful for considering the political and environmental nature of new things you’re looking to bring to market. It looks at the political, economic, social, technological, and environmental ramifications of a plan.
Leadership should also sit down and ask some really essential questions.
- What do we need to be really good at in this next phase or next product rollout?
- Do we have the capabilities we need to succeed?
- What internal obstacles might get in the way?
- What principles and strategies are going to be critical to our success?
- Do we have the infrastructure in place that we need to win?
- Are we continuously reinventing or adding to the value proposition for our customers?
- Are we keeping our customer promise front and center, making sure that’s our north star?
- Are we delivering and building capabilities to deliver on that customer promise?
Finally, it’s good idea to do a diagnostic assessment around strategy, leadership capabilities, company culture, and talent processes, to ensure you have the right capabilities to grow and evolve to the next level.
“These are all critical things, and if we’re too busy working in the business, we have a tendency to skip over these things, which is why companies have such a difficult time creating long-term scalable growth,” Gunn says.
In the end, it’s increasingly clear that what really helps a company succeed is human-centered design, or building organizations where people can thrive, by building extraordinary employee experiences. That includes paying attention to diversity, to equity and inclusion, and building cultures where smart people can bring great ideas and really contribute their best.
“These are the organizations we’ve seen thrive over the last year and a half,” she says.
Don’t miss out – reserve your spot here.
Attendees will learn:
- The major challenges of too-fast growth
- How to recognize the complexity that could be undermining your team or organization
- How to adapt the skills and behaviors needed for consistent, scalable growth
- How to build teams and cultures that thrive in a complex world
Gina Hartigan, SVP of Human Resources, MavenLink
Kristine Gunn, Executive Director, Talent and Org Management, TriNet
Stewart Rogers, Moderator, VentureBeat
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