Managing Growth

David Jones, Peak 10 -- February 19, 2004

Depending on your perspective, growth has different meanings and different implications. To a chief financial officer, growth might represent increasing revenues and profits. For the human resources professional, growth may be defined in terms of head count or benefits structure. For me, growth is the process, leadership and approaches required to create a sustainable business. How organizations manage growth is critical to their ability to become a company of long-term value.

Below are some things that I’ve found effective in my years as an entrepreneur and most recently in building Peak 10.

Effective leadership.
The need for quality leadership is critical to the future of any business. Over the years I have found a direct link between customer value and employee commitment. The main driver for employee commitment is the initiative and innovation provided by an organization’s senior leadership. Effective leaders need to instill a value system and philosophy that is based on financial accountability and market awareness. But the true mark of effective leadership is the ability to keep employees focused on the task at hand while providing the vision for them to be creative and find new and innovative approaches to growing the company.

Set goals and make predictable progress.
I like to use the words “predictable progress” when talking about growth. In a rapidly changing environment, predictable progress is measured in short-term milestones and is the best way to know that your business plan and strategic direction are working. It is critical to state short-term goals and proliferate them throughout the enterprise. This enables the entire organization an opportunity to align individual goals with those of the company. This is especially important in a down economy, where setting achievable goals based on market drivers is critical to employee motivation. To summarize, setting goals and checking progress keeps everyone in the organization moving forward together instead of on disparate paths towards individually perceived objectives.

Effective utilization of resources.
When I talk about resources, I’m referring to capital and people. It’s important to operate within a sound financial plan and ensure that you have the right people in the right positions. Deploying capital in a conservative manner that either directly supports customer needs or is used to invest in programs and people that generate revenue is a recipe for a sustainable business. Although capital investment and operational plans may lay the foundation for growth, people are and will always be the building blocks for long-term success. It is important to realize that organizational fit is one the most important aspects of hiring in high growth companies. Unless the proper expectations are communicated, managing human resources can become an all-consuming task. With that said, if you don’t have talented, motivated people you don’t have a business.

Listening and hearing customers.
Most businesses in growth modes understand the connection between customer satisfaction and future success. Some companies even implement programs to capture customer satisfaction information but very few make use of this data properly. I liken it to listening but not hearing. Sounds strange but it happens to be rampant in organizations large and small. To manage growth and provide long-term value for your customers, organizations must not fail to act on the valuable information they gather from their customers. And whether you have a process in place or not, pay a visit and get in front of your top ten customers. You will be amazed at what you’ll learn.

Create corporate culture.
Growing companies have innovative business ideas and products, conduct market research, create detailed operational plans, and spend time on budgets and ROI scenarios. They often cover every aspect of running a business except culture. Somehow it has become popular to think culture just takes care of itself. Take a moment and think about SAS, the Duke basketball program and Red Hat. They may not be perfect, but each has a distinct culture that is an integral part of their long-term success. Culture may be intangible, but by playing an active role in its development it will support the organization’s strategy, mission and goals. Furthermore culture becomes a cornerstone to consistency and how your organization approaches the challenges of your business and economic environment.

Develop business partnerships.
Meaningful partnerships are a driver for growth. They enable organizations to gain a competitive advantage through access to a partner’s resources, markets and technology. Partnerships give growing organizations new revenue opportunities without disrupting their focus. They also provide the ability for companies to test and expand their product and service offerings without having to invest their own capital.

Public relations as the great equalizer.
Managing what people think about your company, its products and people is important. Sound public relations programs that build visibility and generate credibility are a must for any growing organization. Public relations isn’t just about press releases and news stories, it’s about generating brand awareness through effective communication, thought leadership and community involvement. However, for public relations programs to be effective long-term, they must be created from a well-defined strategy that is able to change as your business changes.

Celebrate success, no matter how small.
Finally, don’t take progress for granted. Celebrating doesn’t always mean throwing a party or even holding a company lunch. Take a few moments to acknowledge achievement and success along the way as it builds camaraderie, loyalty and culture. Yep, there’s that culture word again…

---------------------------------------

David Jones is a co-founder, president and chief executive officer of Peak 10, the leading independent data center solutions provider. He has more than 20 years of executive management experience in high growth companies. David can be reached at david.jones@peak10.com

Back