Oy, oy, I'm growing...for entrepreneurs
A roadmap to recognize and leverage growing pains.
As an entrepreneur, you probably recognize it: what worked yesterday is stalling today. Your business is growing, but it’s going by fits and starts.
In this article we look at what really happens during the different stages of growth and how you can best deal with them. Our focus is on the people side of growth – the challenges you and your team face. Because although every company is unique, almost all growing companies go through the same phases.
(based on the Greiner Growth Model).
The pioneer phase
Laying the foundation
You started with an idea and tremendous drive. With a small team — often no more than 2 to 8 people — you work extremely hard to get your product or service to market. Everyone does what is needed, roles are intertwined and lines of communication are short. The energy is palpable. The team is small and close-knit, but often lacks structure and clear responsibilities. Everyone tackles what is needed, as do you. The atmosphere and way of working are strongly determined by your personality. Of course you sell. You know your product like no other and you are your company.
The main challenge
This startup phase is all about you as an entrepreneur. You are involved in every decision, know every customer and are the heart of your business. This works perfectly, until it doesn’t. The initial growth spurt causes your schedule to overflow and you risk losing control.
How do you move forward?
- Start writing down how you do things so that knowledge is not just in your head
- Consider which tasks you want to hand off first and to whom
- Set the foundation for your sales process so that not only you can bring in customers
- Make sure your financial records can grow with your business
- Build a small but strong network of relevant LinkedIn contacts, peers and recruiters, so that when there is sudden growth, you can switch immediately for the right candidates. Establish these contacts now, before you need them.
The management phase
Creating the initial structure
You are no longer a startup. The team grows to 10-25 people and revenue increases. You get more and more customers and the first specialist functions emerge. This phase can feel like a roller coaster: high highs and deep lows alternate rapidly. The atmosphere changes subtly but dramatically. What used to go without saying because everyone was in one room now has to be spoken out. New people do not know the history and want to know what is expected of them.
Your sales team is becoming more professional. Where you used to do everything yourself, you now have salespeople who lack your selling power and product knowledge. The financial picture also becomes more complicated. Simple bookkeeping is no longer enough; you need to know your cash flow, what you earn per product or service, and what to expect to make smart decisions about where to put money.
The main challenge
Now that you can’t be everywhere, you need structure and division of labor. The first layer of team leaders emerges — often people who were specialists before but now suddenly have to manage teams. You must learn to let go, which is easier said than done.
How do you move forward?
- Put time into developing your first team leaders — they are indispensable for your continued growth
- Set up a simple but working system to track customer data and sales opportunities
- Find a financial advisor who looks beyond accounting and helps with larger decisions
- Think about what your company stands for and how you work – that’s top of mind right now
- Create a plan for onboarding new people so they get up to speed quickly
– Paul Bettonviel
The decentralization phase
Struggling with independence
Your organization has grown to 25-50 employees with multiple teams and team leaders. The methods introduced are bearing fruit, but at the same time everything sometimes feels uncomfortable — just like an adolescent.
In this phase, everyone struggles with freedom and responsibility. Managers are stuck; they have responsibility but don’t really get to decide for themselves. This feeling flows throughout your organization. Your sales team is becoming more professional and specialized, but struggles with freedom in customer approach. They want to set their own goals but still need your approval. Financially, too, you’ve outgrown your simple accounting. You want to know where you are making money, but doubt that team leaders can already have their own budgets.
This is also the time to start thinking about human resources. Good people walk away if they cannot develop. In addition to recruiting new colleagues, advancement opportunities are becoming increasingly important. And even with international expansion, the same question comes into play: how much freedom do you give that foreign team?
The main challenge
Like adolescents, your team leaders and departments struggle with independence. They want to make their own decisions, but don’t always have the complete picture or experience yet. You, in turn, struggle with letting go. How much freedom do you give? What frameworks are needed? This is the phase where many entrepreneurs get stuck because they have to switch from day-to-day operations to setting larger lines.
How do you move forward?
- Make clear what teams can decide for themselves and where they cannot
- Schedule regular meetings with your team leaders to keep everyone on the same page
- Give team leaders their own budgets with clear goals
- Provide advancement opportunities within your company
- Give your sales team the right tools and training to become more effective
The standardization phase
On the right track
With 50-150 employees, you are now a true scale-up. Multiple layers have emerged in your organization, and perhaps you work in different regions or countries. Growth is no longer the problem — managing that growth is.
Your senior managers must not only lead their own department, but also be able to work well with other departments. Those walls between departments have to go. That’s why developing talent now becomes really important. You need new leaders all the time to keep up with your growth, and by having people work in different parts of the company, you break that pigeonholing spirit.
You see this in sales as well. Without proper coordination, teams sometimes approach the same customer with different proposals. And that becomes even more difficult when you go abroad. Then you always have to consider: do we stick to our standards or do we adapt to the local situation? At the same time, your finance department changes from accounting club to strategic partner. Your CFO becomes your right hand that helps you see where you are creating value and which investments are smart for further growth.
The main challenge
The different parts of your company become islands with their own ways of working, atmosphere and priorities. What is missing is the connection and cooperation between all those parts. Returning to central control is not an option, but more cohesion between the parts is desperately needed.
How do you move forward?
- Form teams with people from different departments for important projects
- Develop leadership programs focused on collaboration and shared results
- Make sure you put the customer at the center of marketing and sales to avoid confusion
- Standardize key practices without holding back innovation
- Invest in international talent development to cultivate local leaders who understand your corporate culture
The collaboration phase
Staying agile in complexity
With more than 150 employees, your company is starting to get big. The structures and processes are in place, and now the challenge is to keep the flow in and not get bogged down in bureaucracy and inertia.
Your leaders need to change from managers to coaches who help others excel. Without this change, you get an unwieldy company where no one takes initiative anymore. It is challenging to maintain a culture of ownership and entrepreneurship in a large company, but it is precisely this that keeps you from getting bogged down. You also see this unwieldiness in your sales and marketing teams. They have to deal with longer decision-making and more people involved in each decision. They get frustrated when they can’t respond quickly to opportunities in the market, whereas this very speed was your competitive advantage when you were small.
That tension between formal processes and flexibility is exacerbated when you work internationally. You face challenges around cultural differences, local rules and market conditions. Finding the balance between global efficiency and local effectiveness becomes crucial. You have to find a way to have standards that work everywhere but also leave room for adaptation to local needs.
Ultimately, it’s about being able to make your organization big without becoming unwieldy – combining the advantages of scale with the agility of a smaller player.
The main challenge
Key Challenge
The systems you put in place to survive the scale-up phase can spill over into stifling rules and procedures. Innovation and entrepreneurship are crowded out by forms and control mechanisms. The trick is to maintain structure without losing flexibility.
How do you move forward?
- Make room for innovation by exempting teams from normal rules and procedures
- Regularly critically review which procedures really add value and which just slow down
- Build a culture of ownership rather than control
- Train leaders to inspire others and encourage innovation
- Set up knowledge groups where people from different parts of the company can learn from each other
Growing without growing pains?
Growth pain is inevitable. But you can limit its impact by understanding where you stand and what the next challenge will be. Being prepared is half the battle.
The most important insight: each growth phase requires a different kind of organization, different people and a different way of managing. What got you where you are now will not get you to the next phase. Take an honest look at yourself: are you ready for the next phase? Many entrepreneurs find it difficult to grow with their organization. The human factor remains critical at every stage. Technology, processes and structures are important, but it is always people who make the difference between growing successfully or getting stuck in a crisis.
Do you recognize your own business in any of these phases? Do you recognize any of the challenges described? In our next articles, we will explore specific topics such as leadership, internationalization, personal development, sales and financial role during these growth phases.
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