Think of hypergrowth as those spaceships traveling at warp speed in your favorite sci-fi blockbuster. Everything is bright and exhilarating, but also dangerous if anything goes afoul as you push the laws of corporate physics around you. If you’re just the slightest bit off-course, you could very well end up in the wrong galaxy far, far away. And that’s not cool.
To help keep you on the straight and narrow during periods of hypergrowth, Embark has assembled seven questions to ask as your enterprise bends operational space and time. Keep these in mind while you develop a strategy for your rapid growth, maintain both an open mind and flexibility, include all relevant stakeholders in the conversation, and you’ll safely traverse the financial galaxy with your facilities intact and profitable days ahead.
1. Where Is the Enterprise Heading?
Start with your endgame as you develop a strategy around your hypergrowth. All good things must come to an end and, like it or not, your galactic growth will slow at some point. Look to the end point of your growth streak and make decisions based on what your enterprise will likely look like at that time.
For instance, if you have 25 employees right now but can foresee you having 250 workers when your growth rate slows, don’t make decisions based on 50 employees or even 100. Granted, you don’t have a crystal ball, and there’s a good deal of haziness around that endpoint, but do your best using a combination of intuition and analysis to see where you might be in a couple of years once growth plateaus.
In this case, buying new systems scalable to 100 employees won’t do much good if you end up with 250 employees just a year or two down the road. Ideally, your strategy should be able to accommodate those future states as well as all of the intermediate points in between. This includes technology, staffing, internal processes, and a variety of other operational decisions. Although adequate investment capital is obviously an issue for many organizations towards the beginning stages of hypergrowth and can limit those decisions, at least keep the broader, forward-looking perspective in mind as you make them.
2. What Will Drive Growth?
Speaking of capital, the money to fuel that growth isn’t going to magically appear out of nowhere. You have some big decisions to make, aiming for a transactional source of capital from M&A or investors or, alternatively, relying on more organic growth. The route you choose will inform strategies, so choose wisely and be deliberate with your planning.
Outside investors or M&A require a host of planning points, including an often complex due diligence process, greater reporting/compliance requirements, and several other processes that are likely unfamiliar and sometimes overwhelming. We’ve discussed these topics at length in the past, so use our previous guidance to help you navigate those turbulent waters and, when things get especially perplexing, your experts here at Embark are only an email away.
Organic growth requires meticulous planning as well, just from a different angle. Your operations are fueling your growth, making it self-contained and, in many ways, more susceptible to mistakes. Going back to the previous question, short-sided decision-making can have long-term detrimental effects.
Likewise, organic growth also depends on a finite number of customers, so identify and pursue segments that can provide enough fuel to not only drive your current hypergrowth, but also sustain you in the future. A blue ocean strategy, for instance, leads you to open waters without competitive clutter. Such a technique is easier said than done, however, harkening back to the need for meticulous strategizing when relying on organic growth.
3. What Will Support the Growth?
How you allocate your resources, particularly in an organic growth model, is another critical decision on your plate. Essential components of your operations like technology, marketing, accounting, and several others depend on that capital, so you must decide if you’ll handle them in-house or outsource them. Those foundational decisions will have long-lasting repercussions on your organization once your hypergrowth is behind you.
In a perfect world, you’d have the resources and expertise to absorb each of those essential components in-house without sacrificing efficiency or effectiveness but, as you know, this isn’t a perfect world. Know your limitations and find a balance between cost efficiency and performance. The thought of a brilliant team of accountants sitting just down the hall might be tempting, but that brilliance comes at a cost.
Sure, once your business is mature and realizing more tempered and predictable growth, in-house accounting is probably a very sound decision. During hypergrowth, though, diluting your resources, time, and attention by establishing a squad of elite in-house accountants could do more harm than good.
From a broader point of view, this also speaks to your overall staffing strategy. Rapid growth will require a constant inflow of new talent which, just as in the accounting example, isn’t necessarily best-served in-house. Outside expertise can fill knowledge and talent gaps during rapid growth, providing you with the needed know-how while letting you focus on growing your business. And, yes, Embark just happens to be a perfect example of such outside expertise.
Simply put, hypergrowth is an iterative process that requires you to be nimble and, from lack of a better term, roll with the punches. Maybe you best support your growth by outsourcing your accounting but hiring in-house marketers, SaaS for one system but an outright purchase for another. Every company is different and, just as importantly, changes with time. Build on each decision you make, maintain a longer-term view, and don’t box yourself in with short-sightedness.
4. What Fits Within the Budget?
Adding to the previous question, maintaining flexibility and a broader point-of-view is all fine and dandy in theory but, unfortunately, your budget doesn’t provide financial carte blanche on your strategizing. Once again, things like accounting, marketing, technology, and HR play critical roles in your enterprise, but there’s only so much money to go around. You have to pick and choose what to spend on and determine exactly how much you have available for every need, prioritizing some functions over others.
If your team is working 90 hours per week and beginning to look like vampires, investing in systems that streamline certain processes might deserve some financial acreage within your budget. Relieving stress on your staff will enhance productivity, the employee experience, and minimize attrition, leaving you with the framework needed to build on your hypergrowth in the future. Weigh the importance of every potential expense and maximize what your budget provides to your enterprise.
5. How Will Management Stay Informed?
Ultimately, enduring success that extends past your rapid growth depends on giving your people what they need to be successful, managing with a distinct focus on the team that is propelling that growth in the first place. That highly-attuned brand of people-oriented management relies on accurate, immediate data -- financial, performance, employee & customer feedback -- to steer your decisions.
Such information stems from systems and processes that meet your current needs while retaining scalability for the future. Between cloud computing, mobile technology, SaaS, automation technology like RPA, and seemingly countless other innovations, your operational and people data can go where you go, always keeping you apprised of the internal and external variables that impact performance.
6. How Will Management Collect & Analyze Employee Feedback?
We place so much importance on the employee experience and culture at Embark, it’s only fitting to give employee feedback special attention. Your people are the ones on the frontlines of your hypergrowth, having a particularly detailed knowledge and familiarity with both your organization’s strengths and pain points. They know what’s working, what else is failing, and are an indispensable source of guidance.
While it’s easy to isolate yourself from those frontlines under the guise of intense pressure and time constraints brought forth by rapid growth, the farther you remove yourself from your people, the less you’re in touch with your actual business and any issues impacting it. Therefore, you need a feedback strategy that provides you with authentic, relevant, and immediate insights from your staff.
At Embark, we certainly have our preferred feedback solutions that give us those very insights, but we encourage you to do your own research and see what fits your needs and budget best. Whatever you choose, your employee feedback system should empower your people, giving them an impactful voice that management takes to heart and uses within the decision-making process. When employees feel important and appreciated, the entire enterprise benefits through lower burnout and turnover rates, improved engagement and culture, and greater productivity and innovation.
7. What’s the Competition Doing?
Last but not least, don’t forget what is happening around you. Your growth doesn’t occur in a bubble, the marketplace dynamic and active with perpetually evolving customer segments and competitors. Build your strategy with a sufficient degree of agility to react to changing demand, customer affinities, and your competition. Depending on your industry, even short periods of rapid growth can entail sudden shifts in the market. Remember fidget spinners and Pokemon Go? Things can change on a dime, and enduring success is built upon flexibility.
As for your competition, an old adage comes to mind -- keep your friends close and your enemies closer. At the risk of getting a bit too Sun Tzu on the topic, always maintain an accurate and timely pulse on your competitors. Obviously, you have to understand whom and what you’re vying with to effectively compete but, on the other side of the coin, your competition can also provide invaluable guidance on what not to do. Remember, you don’t have to reinvent the wheel at every turn. Learn from both the successes and failures of other enterprises to streamline and guide your own efforts.
Naturally, every organization and industry is different, so take your own market and circumstances into account when developing a strategy for periods of rapid growth. Yes, such times are exciting and dizzying, perhaps a once-in-a-lifetime phenomenon. However, what goes up must come down, and business won’t always be so dynamic. Leverage the insights you gather from these questions, ask others that might be particular to your own specific needs, and transform your hypergrowth into lasting success. As always, Embark will be here to lend you our experience and expertise every step of the way.