Why “growth strategy for high-growth companies” isn’t redundantly redundant

May 3, 2016

Most people intuitively understand the role of growth strategy in a company where growth has stalled: you’re trying to get things going again.  Got it.  This is neither brain surgery nor rocket science nor the plot line of Game of Thrones.

But in a company that’s already growing fast – what’s the point?  At best, this might be gilding the lily…at worst, it could be a wasteful distraction from more important activities, like redesigning your logo or recalculating the value of your stock options.

But the role of growth strategy isn’t just to ignite growth.  It’s to put strategies and systems in place that make growth sustainable, and to ensure that rapid growth in the present leads to an attractive, defensible market position and a resilient, capable organization for the future.

If this sounds like a fair description of your challenges – congratulations.  Welcome to the strategic equivalent of first-world problems.  Here are five things your chief strategist can do to help set you up for long-term success:

  • Prioritize growth opportunities. If you’re a thriving company in a hot sector, you’re probably in a position to evaluate many attractive future growth opportunities.  Cue the tiny violins…it’s a high-class problem, but a real one.  Which opportunities are worth pursuing, and which are just distractions – or worse, potential pitfalls?  In high-growth mode, you need to prioritize quickly and continually, somehow striking a delicate balance between sustaining the rate of innovation and trying to do too many things at once.
  • Focus and align resources. OK, you’ve identified and prioritized your best opportunities.  Now you need to make sure they each receive the right level of investment, leadership, and support to deliver on their potential.  All without distracting from the core business of course (which might be starved for resources and struggling to keep up with current demand).
  • Untangle the organization. Sometimes growth happens so quickly it’s impossible to implement optimal org structures and processes – you’re just adding warm bodies as quickly as possible to keep up with demand.  At some point though, you need to step back and unwind the unholy hairball you’ve created, or all the knots will start to put a stranglehold on growth.  Untangling the mess won’t be pretty…but much like going to the dentist, the longer you put it off, the more painful both the problem and the cure become.
  • Identify partnerships and acquisitions. High-growth sectors tend to attract swarms of new entrants, each pursuing the same general opportunity from a slightly different angle. Growth may demand that you compete in multiple parts of the marketplace – by adding new capabilities or product/service offerings to create a broader range of options or a more comprehensive solution.  But you can’t build everything yourself, no matter how agile your scrums or lean your ops.  Strategic alliances and acquisitions can help accelerate your drive toward market leadership – assuming you pick the right partners and allocate sufficient time and energy to ensure each combination achieves its potential.
  • Imagine the future. Here’s the dirty secret about small, high-growth companies: they sometimes turn into big companies with merely average growth rates. Some founders hate this, because big companies represent everything they hate: meetings, process, Hawaiian shirt day.  But for the sake of employees, customers, and shareholders alike, someone needs to think about what the scrappy upstart should look like when it’s all grown up.  Because it takes work to preserve the core DNA that made the smaller company so successful: its values, cultural touchstones, and sense of mission.  And when bigness finally arrives, you want size and scale to be the hallmarks of your next growth phase – not signs of imminent decline.  If you can imagine what success – at scale – should look like, you can build that future deliberately.

This is starting to sound like grumpy-old-man advice, along the lines of: Stand up straight, tuck in your shirt, eat your spinach, save for a rainy day, stay here on Dagobah to complete your training, etc.  If you’re still private, you could always try to raise another giant funding round to sweep your troubles under the rug (not that anyone would ever actually do that).

Then again, maybe grumpiness is a virtue here.  The journey from early-stage phenom to enduring industry leader is a long one – and the road is crowded with companies struggling to make the transition.  (Recent cautionary tales may be found here, here, here, and – ad nauseum – here.)  So don’t skimp on strategy during the early days, when growth seems to come easy…because the issues you miss or ignore early on have a tendency, like White Walkers, to come back to bite you.

-Tim P.