What Does Advanced Growth Look Like?

My firm works with companies that are in advanced growth.  Advanced growth is characterized as rapid customer acceptance of a company’s products and services to the point the organization is  scrambling to build more fulfillment capacity to meet demand.  Advanced growth looks different from being in start-up mode in that products and services are understood by both employees and the marketplace, the organization has practices to market and sell them, and customers are eager to accept the company’s offers without a lot of tailoring for each sales situation.

For example, we have one client that sells IT infrastructure products and services.  They are hiring about 20 people a month.  They have seven recruiters that work for them full-time.  They have determined that they want four complimentary roles to help in the sales process.   They also have four different product lines within their business.  They have a vision for how they are going to produce customer loyalty by offering a mixture of products and services from these four lines.  They work together to build practices to serve customers without producing a lot of costs and drama.

It’s about Capacity

What characterizes this company from others that are struggling to grow is their willingness to make investments.  They understand that to grow, they must get more capacity, and the only way to get more capacity is through making bets by buying what they need before the revenue is there.  Of course, they believe the revenue will be there but they understand the basic principal of capacity.   What is capacity?  Consider this example: if you want to serve a large dinner party a lot of coffee, your day-to-day coffee maker isn’t going to cut it.  You’re going to need a large urn to produce the volume needed to meet demand.  Capacity though can be wasteful.  Having a large coffee urn for a single cup of coffee is just too much hassle.

Capacity shows up in your business software tools.  QuickBooks is good software when you are in start-up mode.  But the way it is designed will choke your growth as you try to scale your business.  See this article on how QuickBooks produces pain with 15 or more employees.  Software is a fundamentally a tool which represents capacity.  In the hands of the right actors, it produces power by amplifying their coordination and measurement efforts.

Break-Fix or Invest Mentality

When I meet with prospective owners and executives of companies seeking to obtain better business systems, such as NetSuite, I look for the way they think to determine if they are prepared to succeed.   The best way I can describe the “sure-to-stay-small” mentality is “break-fix”.  Something is broken in the business, fix it.  The phone is ringing and customers need help,  let’s take Sally off of warehouse duties and put her on the phone.  She can help because she understands why products are being returned.   How about this one: we need more leads so let’s buy a list of prospective names and Hank and Melisa in sales can make calls.  The formula is: switch people’s roles, buy something quickly, and directly attack what is in-front of us.  This patchwork mentality is like building a car while driving it down the road — a recipe for many crashes.

When a company is prepared to get to their next level of growth, they make investments.  The story is more grand.  Most important is an investment in better management.  High caliber management will design the action and practices needed to successfully grow.  They will reconfigure the organization and produce roles that take advantage of the power derived from the division of labor.  They may invent new products while working to generate stronger focus.  Most often, management will demand more capacity to drive practices and measure what is happening in the business so they can make better steering course adjustments sooner versus later.  It’s at this point that offers like NetSuite for fully-integrated business systems make sense.    See this article about Four Questions to Ask if Your Business is Ready for Advanced Growth with NetSuite.  I often step into situations where a company has a dozen software applications that don’t work well together because the break-fix mentality brought forth point solutions during the crisis du jour.  Be careful though, even when you think you are doing the right thing with new business systems,  you may be just playing the same game with more expensive tools.  Salesforce.com, the leader in CRM, plays right into this thinking.  See this article.

Do you have a challenge producing quality growth?  Have you contemplated that the fix-it approach may be getting in the way of what is really needed: a good investment?

Marty Zigman

Holding all three official certifications, Marty is regarded as the top NetSuite expert and leads a team of senior professionals at Prolecto Resources, Inc. He is a former Deloitte & Touche CPA and has held CTO roles. For over 30 years, Marty has produced leadership in ERP, CRM and eCommerce business systems. Contact Marty to set up a conversation.

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