The Stresses and Challenges of Managing a High Growth Business


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Choosing to follow a path of high growth is not always a
conscious decision. I have met many businesses who find themselves in a phase
of high growth and whose owners are looking around wondering how they got
there. However in order to continue to achieve high growth they must get to
grips with the business and understand why they are successful. This can be stressful
in its own right because, if they don’t know why they are successful, they won’t
know what to do to rectify the situation if things suddenly start to go wrong.

Operating in a high growth environment is living with
relentless pressure, as high growth will seek out any weakness in a business
and magnify its defects until resolved. The pressure for all high growth
businesses owners is akin to that of patrolling the perimeter of a large
defensive position, where one is constantly on the lookout for breaches and
attempting to repair them as quickly as possible to prevent further problems

One of the most common causes of stress is where the owner
is not in full control of the business. I often recognise this when the owner
comes out with statements like “I feel the business is running me” or “I’m
running through treacle, the harder I work the less progress I make”. As
decisions and issues pile up, the business owner starts to become more and more
reactive and as such, loses the ability to direct the business. Sadly this
situation, if left unchecked, has only one result. There will come a point
where the backlog of issues create a tipping point and the wheels come off; often
in the most spectacular way, with growth hitting a virtual brick wall resulting
in little, none or even negative growth in the following 12-18 months.

Another common reason for stress in high growth businesses
is that the underlying rate of growth in the business tends to towards a
similar rate of change as new positions, recruitment, and management structures
are implemented to support the underlying growth. This means a lot of decisions
have to be made to drive the business forward and the business owner will,
without doubt, make some bad decisions. This in itself creates the need to take
more decisions to correct mistakes. Many business owners need to realise that
it is more important to make a decision even though it might be wrong, than to
sit on it and hope the problem goes away. It never does, and like many things
in life, consciously doing nothing only makes the situation worse.

The key challenge for any high growth business is for the
management to be able to look forward and foresee potential issues and
problems. In order to do this effectively a number of things need to be in
place, the business needs sufficiently detailed information to understand and
monitor the key linkages in its business and that this information is available
in a timely manner. By that, I mean very quickly. In the business I worked in,
for example, we had what we called a flash (rough cut) sales figure for the
previous month available on 1st of the following month. Detailed
management accounts were available by the end of the first week of the
following month. For many businesses
this might either been seen as the Holy Grail or unnecessary, but it is
fundamental to the success of a high growth businesses.

One of the less obvious but nonetheless significant
challenges to assist management to look forward and make the appropriate
decisions is one of culture. A healthy culture is absolutely fundamental to a
successful high growth strategy, as individuals and teams need to grow rapidly
to support and continue to promote the strategy of business growth. Staff and
management will be in an almost continuous state of learning and development –
that means more mistakes. In order to learn and develop, the culture must
promote a team approach and not condemn people for getting things wrong. In a recent
I explained at last that there were hard numbers which reinforce
what we always suspected; that healthy cultures deliver better business

article might have given you the impression that you would have to be slightly
mad to want to choose a high growth strategy. There is no doubt that a high
growth environment is a challenging place to be, it does however have its
rewards for those who successfully master the conditions. Those who succeed in
a high growth environment represent the best of business leaders and managers
and whilst successful high growth businesses represent only 6% of all
businesses in the UK, they contribute 45% of UK employment growth. Such
companies are a vital resource, that need to be supported and encouraged and
whilst difficulties are many the potential rewards are much greater.

Republished with author's permission from original post.

Laurence Ainsworth
Laurence Ainsworth founded Exigent Consulting in 2002 and since then has performed a number of successful turnaround more recently he has worked with businesses to utilise Social Marketing to drive sales performance, customer loyalty and brand recognition. He is skilled at working with, and getting the most from, owner managers.


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