Dynamics of Growth for SMBs Part 3: Overcoming Growth Challenges


Business growth proves the old adage that you can never rest on your laurels. Even if you’re experiencing success today, you won’t necessarily succeed tomorrow by doing the same things. In fact, without careful management, growth and success can actually create their own unique set of problems. 

When growth goes wrong, you may find your business facing some serious challenges. Learn how to evolve and overcome them from Tolar Systems.

This article is the final installation in a series of three articles that looks to identify how to help small businesses identify their goals, create a growth culture, and evolve with the dynamics of growth so that you can stay successful over the long term.

Click below to read parts 1 and 2 of this series.

The Dynamics of Growth

In part 2 of this series, we talked about the stages of growing a business to scale according to Les McKeown’s Predictable Success Scalability Model. Those stages include:

  • Early Struggle—Also known as the start up phase, companies in early struggle are building a foundation for future growth.
  • Fun Stage—When your processes are working, employees and customers are happy and your bills are paid with cash to spare, business is fun. But if you keep growing, you eventually hit a phase that’s not so fun.
  • Whitewater—Growth leads to problems. Processes break down because of increased demand. Employees may become overworked, and customers may feel they’re not receiving the level of service or quality they were promised.
  • Predictable Success – This is the stage of a business beyond Whitewater when goals are being met consistently, teams and processes are working together well, and there is a balance between vision and goals, analysis and action.

However, once you achieve Predictable Success, there’s no guarantee you’ll stay there. Remaining successful means avoiding some of the common challenges that can come when a small or medium size business – or organization of any size – achieves growth.

Challenges of Business Growth

Collaboration Communication Peopleoffice aboveSuccess doesn’t mean your job is done – growth must be maintained, or decline inevitably follows. In fact, maintaining success can sometimes be almost as difficult as achieving it.

The Predictable Success model also addresses some of the challenging times your small or medium size business may face after achieving Predictable Success. These include:

  • Treadmill – Companies may become so reliant on process and procedure that their employee’s creativity and initiative begin to be stifled. Sure, things are running smoothly now, but when new opportunities such as investing in a new technology or process arise, your company may be slow to respond. This is especially true if your employees’ sense of ownership and drive is being squashed by top-heavy bureaucracy.
  • The Big Rut – When a company is on the Treadmill too long, they can end up in a Rut. They may appear successful from the outside – with significant market share and revenues – yet internally, it’s a different story. Creativity, innovation and drive are being stifled, revenues start to shrink and key employees leave. Worst of all, management is in denial of the problem. Eventually, this leads to:
  • The Death Rattle – When a company is unable to step off the Treadmill or out of the Big Rut, death is inevitable. It may take the form of bankruptcy, acquisition or slow fade into irrelevance, but the company that can’t evolve must eventually die.

The key, if you want to continue growing, is to recognize when these challenges are beginning to occur, and take action as quickly as possible.

Solving Business Growth Challenges

Maybe you’ve noticed your company is becoming slower to make decisions. Maybe you want to take advantage of a new business opportunity such as investing in technology that will make your processes more efficient or allow you to communicate more easily with customers but you’re not sure you can afford it so you opt to do nothing. Maybe you’re feeling competitive pressure.

Regardless of how it comes to your attention, as soon as you sense that your company may be stepping onto the Treadmill or has landed in a Rut, it’s time refocus and address some of these common growth challenges:

Hierarchy Stifling Innovation 

When a company becomes overly reliant on processes and hierarchy, with too much top-down decision-making and a “not invented here” attitudee toward new ideas, innovation and creativity are stifled.

What to Do? This is sometimes a consequence of the role an organization’s Visionary (often a founder) plays as chief innovator and decision-maker in early growth. However, as you grow, your employees’ innovation, initiative and creativity are increasingly important to continued success. That’s why it’s important to train and empower them to evaluate opportunities and provide tools for taking action when they arise.

Leadership Identity Crisis

This one is for the founders. Many, if not most founders have Visionary and Operator characteristics. In the beginning, this person had a vision for the company and was also the person who carried it out. However, continuing to wear both hats can lead to what McKeown calls “The Artisan Trap,” a cycle of “sell/do/sell/do” which inhibits growth.

What to Do? Leaders in a growth culture need to decide which role they’re going to play and delegate the others. There are times when owners and executives need to be involved, such as long-term strategic planning and/or hiring for key roles. Other times, leaders should step back and trust the team to do their jobs and make decisions.  Knowing when to step in or step back is a skill that may take some time to acquire, but is necessary for your business and people to succeed and grow.

Cash Flow Issues 

As the second most common reason why small businesses fail, businesses must strike a balance between spending that fosters growth, without allowing spending to leave your business in a financial bind. The challenge in many small companies is that the team that initially achieved success (often composed of a Visionary, an Operator and / or a Processor) may not know how to maintain healthy financials over the long term.

What to Do? This is one reason why having a Synergist on a team is crucial. Visionaries, Operators and Processors tend to be less focused on financial matters, whereas the Synergist recognizes financials as the lifeblood of the business and will work to ensure that financial expertise has a voice in the organization. This delivers confidence in the organization’s ability to make sound financial decisions, thus enabling the company to invest in its future.

Challenges will come in any business. But they can be overcome when your team is empowered with the tools they need to innovate and make decisions that reflect your business’s values and unique strengths. There will certainly be ups and downs, but by knowing what it takes to achieve success and maintain it, your company can define success by its own terms.

Innovate and Grow With Tolar

In today’s business environment, innovation and the ability to evolve are the key to continued business growth, making the ability to manage and leverage IT effectively a crucial skill for any business. If you need help with your technology and growth strategy, contact Tolar Systems today – we can help you evolve your technology so your business can grow.