The Organizational Challenges of Growth

May 1st, 2007

Many entrepreneurs running small growing companies find themselves at some point suddenly fielding a series of complaints from frustrated or angry employees. These unexpected conflicts might be viewed as a major distraction, but they are not the sorts of issues that will go away on their own – they are symptoms of “growing pains.”

Some of this dissent is a natural result of growth. When there were five or ten people in the company, everyone could be involved in key decisions. But when the company grows to 20, 50, or 100 people, it’s just impractical. Thus, some of the original employees who used to sit at the “strategic table” may no longer be senior enough to do so. Sheer size of the team has forced a reconfiguration of the table, and this tends to leave out loyal, long-time, enthusiastic – yet inexperienced – team members. The restructuring cannot be avoided, but making an effort to reach out to loyal employees can alleviate their disappointment.

Another example of growing pains is the emergence of a lack of clarity around getting things done. When everyone sat in the same room, it was easy to discuss who was going to do what. Everyone wore many hats, and things got accomplished through sheer force of will and known common goals. As a visionary for your company, you may not want to stop and take time to think about issues like process. But in the absence of such thought, balls will absolutely begin to drop, customers will be disappointed, and morale will suffer.

By nature, entrepreneurs are externally focused – their success has come from acquiring customers, partnerships or market information. It’s also common for entrepreneurs to expect that each employee shares their vision, and is as committed as they are to the success of the company. When this commitment is taken for granted, little attention is paid to setting internal expectations. Employees become more and more unclear about where the company is headed, how decisions are being made, and who is responsible for getting things done. In the absence of such direction, people will develop their own expectations and ground rules – and they don’t tell you about these expectations until you have violated them. Then, you’ll have the unhappy revelation that people are bitter, feel unappreciated, are threatening to leave, and worst of all are beginning to under-perform or disappoint your customers.

As a company evolves, people need regular redefinition of their roles, of the roles of others, and of how they make an important contribution to the success of the company. Additionally, the mission and core strategy of the company must be constantly clarified and reinforced. This is the only way to ensure that everyone is focused on doing the right things at the right time. Ask your employees to tell you what they would say if asked about the mission of the company. Do they all say basically the same thing? You may be surprised to learn that the answers vary significantly, with some employees articulating a vision you discarded eight months ago.

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