The 4 Stages of Company Growth

Continuing on from previous post the following brief descriptions set out what each of these growth stages looks like.

Create Stage:
Take an idea and experiment. Get feedback, lots of feedback from lots of people and make adjustments. Are you sure there is a problem that needs solving? Understand deeply who needs to solve it and why. What options are there to solve the problem and which ones are you best placed to offer? Do sufficient numbers of the people with the problem value your solution over alternatives enough to pay you for it? Test how they would pay you, how much and how often. Decide on a creation (product and/or service offering) that you are ready to verify in a chosen market.

​Verify Stage:
Prove you have a sustainable business (the business model). Do you know how to attract the right talent to help you today? What actions are needed to provide an ongoing stream of paying customers? Secure paying customers; the innovators and early adopters you need to help prove your idea. Do you see a point in the future where your returns will exceed your costs and what options do you have to bridge the gap between now and then? Do you have a workable plan that differentiates you from current competitors and do you understand what future competitors will do in your market? What are the most important measures you’ll track over the next 12 months? Execute your plans, monitor and adapt.

Cultivate Stage:
​The things you did yesterday gave you knowledge but are unlikely to be what you’ll do tomorrow to ensure growth. Your creativity now needs a level of order to enable it to move from proof of concept into growth mode. This order and coveted repeatability needs process structure to turn inputs of labour/time and materials/code into quality, desirable outputs. These processes need to be coordinated and aligned to well-articulated goals by teams. Teams and the individuals that make them up need to be accountable to each other as hierarchy in growth companies is kept to a minimum. However teams need to be supported by passionate leadership that have an intimate understanding of where the company is going. This leadership communicates regularly about what success looks like to maintain excitement about the future. Phases of revolution and evolution will be triggered by growth in revenue and consequential growth in team numbers. For example increasing leadership, likely to be a disruptive revolution for a creative team, will provide direction but limit autonomy, autonomy can be improved by delegation but this limits central control which in turn can be resolved by more coordination. 

These phases are natural as an organisation grows, anticipating them, making decisions about what you will and won’t do and the actions you take will determine your path to growth. Growth by definition consumes cash, the more ambitious the plan the higher the need for cash. Track its use, forecast future needs and verify every decision needed to spend it for a tangible goal-achieving return. Good cost management often just needs an innovative approach to acquire what is needed at a lower price, ingenuity is the key.

Scale Stage:
Time to pick up the pace and get serious but you are already feeling the stretch that your growth to date has created. To execute scaling up successfully, focused steps are now needed. Every movement forward builds on the last with a relentless quest to push the organisation forward toward the achievement of the next big goal. This change can impact culture and unsettle people as their roles begin to narrow and the reasons they joined the journey look to be disappearing (See Steve Blank’s excellent post on founding employees feelings of loss).

It’s critical that every stakeholder understands what the big goal is. This means framing the narrative for each audience; internal teams, customers, partners and even positioning this for your competitors. Each next step needs to be intimately understood internally with it being the focus of the next 90 to 180 days of effort and measures while still remaining focused on the big goal the company is shooting for. There will still be many things that need fixing but each of the steps you decide to take must matter to customers and build on your position and resilience in your chosen market.

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For larger companies that have already achieved scale the next stage could be to evolve using a blend of these four stages to support their ongoing attempts to move beyond surviving to a continuous state of thriving.

What do you think, where are you at, and what do you recognise in these four stages from your own growth journey?Stay tuned for my next blog if you are interested to read about some of the models and tools that will help you navigate through these stages.