Patterns – Crisis of growth

I have worked with two startups in the past. One does not exist today and the other one is still growing, and may either grow further and crash or get into a sustainable growth path if the senior management learn faster than their work force. There are lot of similarities between these organizations.

  1. The growth of these companies were very rapid till a point
  2. There were ample opportunities for everyone to learn and experiment
  3. They all had a very informal work environment
  4. When they touched a 100 plus strength, the management started looking for ways to standardize things – killing the informalism
  5. The key leaders (founding members), started to distance themselves from the rest, by bringing in senior executives from other organizations (very often these senior executives had pre-set mind sets – they knew just one way of working, and thought that is the right thing – and this was in contrast to the company’s informal structures – creating a turmoil within.
  6. Bringin in senior exceutives from outside prevented growth opportunities of some very senir insiders. This created resentment within and sometimes even resignations, giving wrong signals.
  7. The founding members got little bit over confident and arrogant, becuse they are successful till that point.
  8. While all others are continuously lerning, the founder members did not learn anything new and at the same time they need new skill sets to manage a large organization with diversity. This is more like the parents failing to change their approaches towards their kids, as they grow. They still feel that their son or daughter is still that small baby.  In the startups I have seen, the promoters did not have neither the time nor inclination to go to a training program to gain new skills.
  9. They start to treat employees as cost not as resources. Till a point of growth, all were friends and colleagues, and at some point in time this changes to – cost to the company !
  10. The senior management did not have a concrete growth plan for their organizations, which they could share with the team memebers. This in turn created ambiguity about future in the minds of fellow professionals, thus demotivating them.
  11. The senior management failed to point out one single external enemy to their organization, leading to lack of teamwork and fighting spirit among the workforce.
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One thought on “Patterns – Crisis of growth

  1. Handling growth is a challenge for every organization. Do you have any suggestions from your observations?

    In my opinion, You need to do ‘right’ things. What you mentioned as 4, 5, 6, 9 may be right things to do from management perspective.

    One important thing to do is to maintain ‘trust’ with the team. This can be achieved by a good communication strategy.

    Communication of why different things are being done and how these changes will impact the organization in a positive way is needed on regular basis.

    Constant reaffirmation of goals, values will be important too. This is where experience of senior management comes handy. They are likely to make mistakes first time but should learn and take steps prevent in subsequent attempts.

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