Growing with Intention: The 7 Stages of Growth
Unique to our programs is our laser-like focus on
the 7 Stages of Growth companies move through as they grow. What
works for your business when you have 20 employees is far different
than what will work for you when you are staring at 125 employees.
And even more critical to a company's success is the leader's attitude
about growth.
The 7 Stages of Growth were developed by James
Fischer, Founder of Origin Institute, a research and consulting
company out of Boulder, CO. The Stages of Growth are based on a
6 year study of entrepreneurial companies in the Front Range
and Silicon Valley and interviews with over 650 CEOs to understand
and decipher the patterns, the behavior and the characteristics
of growth in entrepreneurial enterprises. As a founding partner
with Origin Institute for the past four years and one of only two
licensed Growth Curve Specialists, I am now utilizing the stages
of growth as one of the 10 key components in FlashPoint!'s executive
training programs.
What Stage of Growth are you in?
Stage 1 - Start Up: 1 - 10 employees
Stage 2 - Ramp Up: 11 - 19 employees
Stage 3 - Delegate: 20 - 34 employees
Stage 4 - Professional: 35 - 57 employees
Stage 5 - Integration: 58 - 95 employees
Stage 6 - Strategic: 96 - 160 employees
Stage 7 - Visionary: 161 - 500 employees
Creating a sustainable, thriving enterprise takes
time, patience and planning. And it takes practicing the art of
intentionality and knowing how to navigate through the various stages
of enterprise growth.
As a business owner who recognizes and understands
these powerful stages of growth you are better able to:
- Initiate, manage and complete your change initiatives
- Improve the outcome of your decisions
- Calibrate the impact you, as a leader, have on
your company's performance
- Manage and advance the forces driving your
company's profitability
- Resonate and respond to the hidden agents
influencing your work community

How to take the guesswork out of growing your
business
The honeymoon is over. You have your start up capital,
you ramped up to 4 - 6 employees pretty quickly and now the fun
begins.
Getting out of the gate with a new company isn't
easy but it's a cake walk compared to creating a consistently profitable
business that you can run and not have it run you.
I talk to business owners every day. They are struggling
to keep their focus on the constant barrage of issues they have
to deal with in a fast-growing enterprise that has quickly grown
beyond the owner's ability to manage everything.
That happens, by the way, as soon as you start adding
full time employee to the mix.
In a six year research study of entrepreneurial
company's along the Front Range and Silicon Valley, the trigger
to growth trauma wasn't brought on by an increase in revenue/sales
or profits. It was brought on by an increase in the number of people
in a company.
Intuitively, business owners know when growth trauma
is occurring. I knew it as I grew a company from 2 employees to
over 100 employees. I recognized the signs of growth impact early
on in our company's life cycle when we watched profits dip, customer
satisfaction decline, morale issues surface.
What I didn't understand was the exact reasons, except
for a general belief that it was harder and harder to keep pace
with the requirements the additional people we brought on board
demanded and the feeling that what we did last week no longer was
working this week.
Wish I knew then what I know now.
The complexity of any organization is created because
of the number of people, not the amount of revenue, you have. Money
and processes are easy to manage compared to the dynamic impact
that people bring to the table.
This entrepreneurial research study turned into an
enterprise development model that I use daily in my consulting practice
with business owners.
This model helps business owners get ahead of growth
issues, actually allows them to predict growth impact and helps
them understand what they have to do to manage their company as
they add more people.
A Stage 1 company, (there are 7 Stages that cover
companies up to 500 employees) or Start Up, has 1 - 10 employees.
A Stage 1 company is CEO centric - meaning the CEO
is likely the 'specialist' who has created a product or service
and is now getting their idea to take shape. Therefore, 50% of your
time should be spent as the technician or the specialist while only
10% of your time will be spent as a manager.
The Five Non-Negotiable Leadership Rules for a
Stage 1 company:
- You must generate, track and preserve cash
- You must focus 80% of your resources on selling
the 2 - 3 offerings with the best margins
- You must hire for 'how the person fits in with
the team' first and second, for how competent they are
- Waste no time trying to 'stabilize' your company
- embrace chaos - command the team and inspire the employees
- Establish regular one-on-one meetings with each
employee designed to build a company-wide performance mindset,
feedback loop and employee development
As a company grows, so must the leader. Each stage
of growth will require something different from the leader. Understanding
what is required of you as your company evolves can either propel
the company forward or cause the company to become 'stuck' - profits
never materialize; sales suffer; there is high employee turnover.
Survival is the name of the game in a Stage 1 company.
As you grow closer to Stage 2 (10 - 19 employees) it shifts to being
about growth. Stage 2 is about supporting higher sales levels and
making a profit.
The bottom line in understanding the 7 stages of growth
that all companies go through is that the complexity of an organization
will always extract its due. Understanding what's coming is the
real value in understanding each stage of a company's growth.
All of FlashPoint!'s programs are designed to focus
on your stage of growth. If you are a stage 1 company, we can provide
you with the top five challenges for your stage of growth. We can
get you focused on the 'rules of the road' for a company with 1
- 10 employees. And we can help you get ready for the day you add
that next employee and flip you into the next stage of growth.
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Keep the Momentum: Focus on These Critical Challenges
You aren't sure when it happened. But without really
being cognizant of it, you have 14 employees. Fourteen people who
now rely on you to 'bring home the bacon' so they can fry it up
at home.
Ouch. You knew things were getting more difficult
to manage. It was getting harder and harder to keep up with the
flow of work. Your employees were sending you 'not so subtle' messages
that unless you did something soon to ease their pain, it was you
they might be 'frying'.
You are now the proud owner of a Stage 2 company with
between 11 - 19 employees. You just experienced what is referred
refers as a Flood Zone, one of two 'chaos zones' that companies
move through as they grow. A Flood Zone requires you to bear up
to an increase in the quantity of activity. Your first reaction
to a Flood Zone is to add more people. Don't.
Instead, as you Ramp Up in Stage 2, you need to be
focused on Profit/Revenue, getting critical processes in place and
avoid the trap of just 'throwing people at your problems'.
This mistake alone has accounted for too many businesses
imploding too soon. There are five critical challenges you face
as a Stage 2 leader. In talking to leaders who have made it to Stage
2, they are almost completely overwhelmed.
You probably haven't spent time thinking about 'managers'
or shifting the responsibility of managing these 14 people - you
are not only trying to keep them on target with projects, but you
are still doing everything you've been doing since you started your
business.
Based on recent research, getting focused on five
specific areas of your company will help. I know you have more than
five things you have to worry about. I get that. I'd just offer
up this approach to the following five top challenges of a Stage
2 leader.
When you get out of bed every morning, spend time
organizing your day around these five activities. Make the commitment
that you will address each one, at some level, every day.
Challenge #1: Hiring Quality People.
But, Laurie, you just said: Don't throw people at your problems!
I'm not asking you to hire more people, I'm asking you to hire quality
people. My guess is you have one or two people on your staff right
now that the company has outgrown. They are good people but the
company has moved on and they haven't. Let them go and hire someone
you can begin delegating specific tasks to.
Challenge #2: Improve Sales. You
are no longer in survival mode. You have moved into growth mode.
That's why generating revenue through sales is so critical. Follow
the money. Enough said.
Challenge #3: Manage Cash Flow. Track
it daily if necessary but no less than weekly. Don't let your expenses
get ahead of you. When thinking about spending money on something,
take time and 'inquire' as to the WHY of your decision. Ninety percent
of CEOs think they make good decisions - 60% of them are a bust.
This isn't time to squander resources.
Challenge #4: Recognize the Leadership/Staff
Gap. If you aren't talking to your staff, individually, on a weekly
basis - and I mean having a dialogue about how they are doing, what
they need, how you can help them - you are looking at the beginnings
of a communication chasm that you won't be able to bridge. Start
talking now - payoff is in spades.
Challenge #5: Limited Capital to
Grow. This is a challenge that has dogged you potentially since
day one. It is reality for companies in Stage 1 and Stage 2 who
haven't received venture funds. Have you looked at your business
model? Do you have a model that creates a recurring revenue stream?
Passive income? Have you recently evaluated your pricing model?
Don't get complacent. Worse, don't spend all your time working IN
your business. Intentionally think about your business.
Congrats on making it to Stage 2!
All of FlashPoint!'s programs are designed to focus
on your stage of growth. If you are a stage 2 company, we can provide
you with the top five challenges for your stage of growth. We can
get you focused on the 'rules of the road' for a company with 11
- 19 employees. And we can help you get ready for the day you add
that next employee and flip you into the next stage of growth.
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No Longer CEO-Centric: Time to Start Letting
Go
Hang on to your sanity, your world just shifted.
The dynamic that occurs when a company moves to Stage
3 with 20 - 34 employees is unlike anything you've been through.
Up to this point in the company's history, it's been CEO-centric
- your passion, your vision, your blood, sweat and tears have carried
the company successfully to this point.
With the addition of employee #20, a strange phenomenon
occurs. We liken it to when your preteen, who use to think you walked
on water, now thinks you're dumb and dumber. You are just a few
months away from a staff revolution. You've felt the subtle change
- your employees are a bit harder to manage, they push back more
often, their attitude hits you in the face when you least expect
it - you seem to be at odds with them on a daily basis.
Here's a hint. Don't look at them - look at yourself.
Your company just hit a wall in how you manage it and it's you who
has to make some changes -- quickly.
A couple of critical forces are hitting at the same
time. In Stage 1 and Stage 2, a company is CEO-centric. When you
move into Stage 3, it becomes Enterprise-centric. It's too big for
you to continue to 'wear all the hats'. It's time to start 'passing
those hats' around to the incredibly talented people you have hired.
You have also just come through a Wind Tunnel - a
chaos zone that requires you to let go of methodologies that no
longer work and adapt new ones that do.
That's a lot for any CEO to deal with.
Stage 3 has the highest incident of CEO-burnout of
any stage of growth and it's not difficult to understand. Suddenly
you have to start managing, delegating and team building like there
was no tomorrow. The top 5 challenges for a Stage 3 company
include:
- Staff buy-in
- Leadership/staff gap
- Weak business design
- Unclear core values
- Staff is resistant to change
Four out of five of your top challenges center around
people issues. If I've heard it once, I've heard it a thousand times
from business owners - the lament that starts with 'If I just didn't
have to deal with employees'.
It's no wonder that as a company moves into this critical
stage of growth that many CEOs lose some of the enthusiasm, the
passion that was their 'life line' up to now. You could always call
on your 'life line' to get you through those tough times. Now you
have to start relying on your people - relying is a bit soft. You
have to start 'trusting, believing, managing, training, teaching,
coaching, rewarding, caring and communicating' with each and every
person in your company. And you have to do it daily.
Want to know how to avoid the 'staff revolution'?
One word: Communication.
And lots of it. Now. Today. Tomorrow. Next week. Next
month.
In a workshop the other day, I mentioned that a manager
should meet with their direct reports once a week for at least 30
minutes. One participant quickly did the math for their 9 reports:
'You want me to spend 4 1/2 hours a week talking to my employees?
Who has that kind of time?'
There's your staff revolution.
Your employees are just as excited about the success
of your company as you are. Give them a chance to succeed. As a
leader, you have to evaluate your leadership style and ask yourself:
is my style hindering the success of this company? If you tend to
lean on the micro-manage, command and control approach to managing
people, you're in trouble.
Stage 3 demands that you start letting go and start
bringing your key people into the fold. Many companies never make
it past Stage 3 - the revolving door starts early. When you hire
smart, capable people and they aren't allowed to be smart or capable,
they will leave. Wouldn't you? Put yourself in their shoes. Tap
into the intelligence of every single person in your company.
Now you know how to avoid the revolution. Good luck!
All of FlashPoint!'s programs are designed to focus
on your stage of growth. If you are a stage 3 company, we can provide
you with the top five challenges for your stage of growth. We can
get you focused on the 'rules of the road' for a company with 20
- 34 employees. And we can help you get ready for the day you add
that next employee and flip you into the next stage of growth.
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Complexity Level Increasing: Focus on Experienced
Managers
This isn't the time to think about saving money by
hiring inexperienced managers. In Stage 4, with 35 - 57 employees,
you are in need of managers who 'have been there, done that'.
And the CEO is now spending at least 70% of their
time 'managing'. Getting the right people on board to take your
company through this stage of growth is all about bringing on experienced
managers, creating management systems and maintaining your market
position.
Still hanging onto your need to control everything?
Still playing specialist or out there 'visioning' your next opportunity?
Sorry - wrong time, wrong focus.
Stage 4 is all about Internal Focus, it's all about
Internal Processes. If you need to be convinced, here are your top
5 Challenges for a Stage 4 company:
- Weak project management
- Difficulty diagnosing problems
- Employee turnover
- Not getting systems in place
- Your organization is uniformed about company growth
Remember Stage 3? It was all about delegation, all
about you, the CEO letting go. The necessity of that lesson will
become painfully clear if you head into Stage 4 looking like a cat
dangling from your living room drapes - you have to LET GO!
Why is one of your challenges 'employee turnover'?
Because if you haven't started getting 'strong, experienced managers'
in place, your employees will leave. Remember, people stay at a
company because they respect their manager. If you can begin to
provide your employees with managers who know how to manage the
work of the company, as well as manage the people, your employees
feel less frustrated, work fewer hours, are way more productive
and receive solid input on their performance on a regular basis.
Stage 4 is also about helping each manager feel confident
about their team, about their work, about their own identity as
a team. Your job is to help them gain that confidence. Don't worry
about integrating these managers across the company just yet. Help
them find 'their own way', work with them to be accountable as their
team evolves and matures. You will avoid a lot of finger-pointing
and department disputes if you let each manager build a stronghold
and develop their own sense of commitment and team-ness.
Are you getting the message here?
This isn't just about 'training' qualified people
to move up in your organization. Yes, that can be done, however
experience tells us that it's generally just an easy way for a CEO
to avoid doing the harder work - finding experienced, already trained
people already hardwired to help them grow their business.
Successful CEOs surround themselves with knowledgeable,
experienced people - they want to be challenged on decisions, knowing
that the more diversity of ideas and even attitude they bring on
board, the more depth they create in their organization.
As you moved from Stage 3 to Stage 4, you also went
through another Flood Zone: an increase in the level of activity.
Because you are teetering on shifting the major control of your
company over to experienced managers, remember to focus on key processes,
key systems that will provide you foundational building blocks to
manage that shift.
Your company is growing up. The biggest question to
ask yourself is 'are you'?
All of FlashPoint!'s programs are designed to focus
on your stage of growth. If you are a stage 4 company, we can provide
you with the top five challenges for your stage of growth. We can
get you focused on the 'rules of the road' for a company with 35
- 57 employees. And we can help you get ready for the day you add
that next employee and flip you into the next stage of growth.
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Alignment, Integration: Stage 5 is All About
Synergy
You've moved beyond 50 employees. I remember experienced
business owners telling me as President of a growing company, "Watch
out. When you get to 50 employees, everything changes." My frustration
was that no one would tell me exactly what those changes would be.
Because of the 7 Stages of Growth enterprise development
model, I can shed some light on exactly what those business owners
were cautioning me about and hopefully save you hours and days of
frustration.
As a Stage 5 company, you have 58 - 95 employees.
The company is beginning to align itself - sales and marketing understands
and is involved with product development. Customer service is tied
into every aspect of your operation. As the CEO, you are operating
in a proactive, systematic approach instead of a reactive, scattered
approach. You have trained and/or hired qualified managers and their
divisions are operating on solid ground.
There's a subtle difference now that you have 'breached
the 50' - while managing this dynamic organization is your number
one priority, you have to shift ever so slightly into a more visionary
role. No longer invisible to the outside world, your competition
is heating up because you are now playing in a larger fishbowl.
Your top 5 challenges include:
- Improving sales - Of the three
gates of growth: Profit/Revenue, Process and People, your #1 priority
is Profit/Revenue. Because you are entering a larger competitive
domain, you need to focus more of your energy developing new opportunities
and cementing key relationships with current customers.
- Difficulty forecasting problems- Larger
is harder and in Stage 5 it's easier for problems to simmer underneath
your radar and create cracks in your armor. Staying alert, not
allowing mediocrity to set in, paying attention to the little
things (never assume your vision and values are safe), will help
you continually stay ahead of the tidal waves that can sink your
ship.
- Cost of lost expertise - Your second priority
of the gates of growth is People. It's harder and harder for your
employees to feel 'valued'. It's more difficult for you, the CEO,
to 'touch' every single person in the organization. You need to
maintain a constant vigilance to stay on top of how your managers
are aligning employee performance to company goals. That's the
hard part. The easy part is for your employees to disengage because
they aren't feeling 'valued' and decide the grass is greener someplace
else.
- Weak profit design - Focusing on Value Exchange,
Organizational Structure, Business Development, Operating Systems,
and Knowledge Management is a good place to start in evaluating
your profit design as you move into Stage 5. Assuming what worked
before will continue to work is a mistake many leaders make as
the company grows beyond their capacity to manage all aspects
of their business.
- Staff training - Do each of your departments
have their own budget with spending discretion? Do they understand
gross margins, how the company makes and keeps money? Is there
an intentional training program in place for all employees that
is focused on company goals? How much of your budget have you
allocated to training? For my money, training your staff on Company
Goals, Company Issues and Company Priorities is far more productive
at this stage of growth then sending them to expensive conferences
and outside training programs.
Where Stage 4 was all about developing strong independent departments,
Stage 5 is all about Integration. Because you took the time to develop
strong fiefdoms, the art of integration will be much smoother.
You lead by showing that you value people's input and you work to get
commitment through participation, not dictation. Having spent the
time and energy to build a great team, look to them for guidance
and advice in their areas of expertise.
Teamwork and collaboration is crucial as you lead
your team into the future.
All of FlashPoint!'s programs are designed to focus
on your stage of growth. If you are a stage 5 company, we can provide
you with the top five challenges for your stage of growth. We can
get you focused on the 'rules of the road' for a company with 58
- 95 employees. And we can help you get ready for the day you add
that next employee and flip you into the next stage of growth.
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Compete from Strength by Developing a Strategic
Perspective
There's a rhythm now.
Patterns of behavior have been established, processes
are in place, the morning walk through your company has an air of
familiarity that feels good. Feels comfortable. Your confidence
in your staff is strong.
If you've captured the imagination of your managers,
they now provide the stability to make good decisions, connect with
their direct reports, and provide sound input that keeps you updated
on critical issues.
This level of engagement is critical in Stage 6 because
it's time for you to, once again, shift your view, your attention
and your energy. The company must pay strong attention to its strategic
orientation in the market place. With 96 - 160 employees, it's time
to look beyond the arena you have built and prepare to take the
company into a more challenging competitive environment.
You must set in motion the longer view, move from
an annual planning perspective into a multi-year strategic perspective
and drive the organizational culture as a visible leader. Emphasis
is once again on people as your top growth gate with profit/revenue
as a second priority.
Your top 5 challenges include:
- The need to have better staff-buy in
- The impact that staff satisfaction has on the company's
profitability
- New staff orientation
- Strengthening a weak profit design
- Hiring quality staff
As a leader of a Stage 6 company, you must engage
a unique blend of managerial and visionary styles. Orchestrating
a company's move into Stage 6 requires a leader who believes strongly
in the power of effective and consistent communication. Your leadership
style must help create synergy by connecting people to each other,
be able to heal rifts in a team, and motivate during stressful times.
It's also time to revisit some areas that you might
assume are okay:
How's the vision? Still clear? Just make sure
you've revisited this with your management team to make sure there's
not been any erosion. This doesn't happen because people don't believe
in the stated vision, it happens because you've trained and developed
strong-minded staff - they will be testing and questioning the direction
of the company.
Values still driving behavior? Again, check
in frequently with how these are being adhered to in your company.
Are the values still a part of determining who gets hired? Are people
making decisions based on those values?
If your vision and values have survived the complexity level you've grown
to, then your culture should be well defined. Any erosion of the
culture you wanted to create will manifest itself clearly at this
stage of the company's growth.
Do you have a powerful strategic plan in place? More critical than
ever is your ability to put a strategic plan in place that focuses
the company's resources on opening up new markets, refreshing products
and/or services and directing the company's future growth.
I remember when I was running a company at this stage of growth the overwhelming
feeling that a shift was needed in our thinking, in our planning,
in our ability to look ahead and plan for the future. We brought
on a Board of Directors. We brought in outside resources to help
us evaluate and challenge our current status. We got uncomfortable
again.
Remember that rhythm we talked about? Time to orchestrate a new score.
All of FlashPoint!'s programs are designed to focus on your stage of
growth. If you are a Stage 6 company, we can provide you with the
top five challenges for your stage of growth. We can get you focused
on the 'rules of the road' for a company with 96 - 160 employees.
And we can help you get ready for the day you add that next employee
and flip you into the next stage of growth.
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Even If You Don't Think It's Broke, Shake Things Up
What a view. From where you sit, as the CEO of an organization with 161
- 500 employees, you have the right to be proud.
How many of us ever sit back and simply bask in the pleasure of being
successful? If you are like most CEOs, you spend very little time
in reflection of where you have come from - you move quickly on
to your next challenge, your next successful endeavor.
Stage 7, the Visionary stage of growth, offers great opportunity while
throwing even larger challenges your way.
The phrase "You can tame a wild duck but you can't make a tame duck wild",
speaks volumes about a CEO's challenges in Stage 7. Management's
efforts to professionalize the company often crush the entrepreneurial
spirit that is so necessary in order not to be left behind by other,
newer entrepreneurial firms.
Because of your size, your company has started to form layers of bureaucracy
that quickly impede performance and growth.
As you 'listen' to your direct reports and employees talking around the
proverbial 'water cooler', are you hearing:
"That's the way it's always been done, I don't know why they want us to
change."
"We really don't have the right people on board to make that change."
"No one cares about what I'm doing, so why should I care?"
"I don't know what's going on - they never tell us anything anymore."
If there is one thing I know from experience, if you aren't telling your
employees what's going on, they are making it up on their own. And
their 'fill in the blanks' verbiage is MUCH different than yours.
Theirs is full of fear, uncertainty, negative speak and 'attitude'.
Your primary role as the leader is to spend 75% of your time as the Visionary.
You need to engage, excite and empower your employees to think about
and see the new vision of where the company is going from here.
Spend time communicating the vision, the strategic plan, and your desire
to maintain the entrepreneurial spirit of the company that got you
where you are today. And then make sure you are 'walking your talk.'
Don't let your company fall prey to the 'invisible employee' syndrome.
You now have enough employees in your company that the mediocre
ones can simply 'fall through the cracks'. You know what I'm talking
about. You have employees in your company that just aren't performing
at the level they should.
It's sometimes easy to overlook them, allowing these employees to become
'invisible' and if you do, you are making a mistake. Don't let them
become an invisible negative force in your company - either focus
on raising their performance level or part ways.
A company in Stage 7 will have an overwhelming tendency to gravitate toward
safety and equilibrium. It will start to act like a large company
- its decision making is slower, the product innovation is slower,
and the bureaucracy is formidable.
It's harder to respond as quickly as a younger, more agile organization.
Your job as the leader in a company of this size - along with sustaining
and propagating the vision of the company - is to create a degree
of disequilibrium and chaos within the enterprise.
Your goal? Create a corporate culture that supports entrepreneurial endeavors.
How? Start by going through your company lighting fires of inspiration
and innovation. Be relentless in allowing mistakes in the pursuit
of new endeavors.
Get out from underneath the strategic and operational challenges in order
to identify and carve out new opportunities.
Your top 5 challenges include:
- Weak product/service development and differentiation in market
- Profits are inadequate to grow the company
- Too slow getting new products/services to market
- The need for an improved profit design
- The marketplace and your customers change too quickly
Recapturing the entrepreneurial spirit that you had when you were a much
smaller, much more nimble company is critical. Identifying new opportunities,
fostering exploration, developing action plans and assigning the
necessary resources to manifest those plans is your new paradigm.
All of FlashPoint!'s programs are designed to focus on your stage of
growth. If you are a stage 7 company, we can provide you with the
top five challenges for your stage of growth. We can get you focused
on the 'rules of the road' for a company with 161 - 500 employees.
And we can help you get ready for the day you add that next employee
and flip you into the next stage of growth.
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