It’s not uncommon for an entrepreneur who has grown her businesses without any significant interruption to suddenly discover that a lot of what made her company successful before may not work going forward. As with so many who have come before her and will come after her, it is probably the harsh reality of what it will take to move beyond the $10 million revenue mark that breaks the proverbial camel’s back. That number is debatable, but quite frankly if an entrepreneur doesn’t experience at least one growth-related breakdown a day, then she’s probably not challenging herself or her company hard enough.
Until that inflection point, life has been relatively straight-forward for our successful entrepreneur, although it often involves a 24/7 commitment to her business and unflagging energy. By dint of sheer will-power, a positive attitude, good instincts and advice from friends and colleagues she has achieved many of the goals she set for herself. The company has a small but effective sales force, a healthy list of clients for her well-designed services and/or products and a dedicated staff to deliver on her company’s Value Proposition. She talks about the great culture she has built while admitting that she’s not perfect and in the past has had to get rid of a few bad hires. She has made some smart investments in marketing, PR and advertising and has probably recently brought on back-office finance and HR personnel to prepare her for future growth.
And yet, that future doesn’t seem to be arriving.
If she’s smart and/or lucky this business owner will quickly learn one of the key lessons of entrepreneurship: a strong short-term revenue stream doesn’t guarantee long-term growth. In the wake of that ah-ha moment she’ll begin to realize that she needs to stress test her strategy as well as business and operating models while considering options she has never entertained before or finds distasteful. She may even have to reevaluate the goals she once set for herself and her business. She has now started the process of solving what I call the “Rubik’s Cube of Growth”.
And like playing with the multi-colored puzzle from the 70’s, our formerly intrepid entrepreneur quickly learns that should she make a major change in one area, other parts of her business model will be affected and may have to change or transform as well. It will take a lot of mental effort, not to mention emotional and psychological gyrations to get the colors to line up again on her Rubik’s Cube of Growth.
If she runs a professional services business she may decide she needs bigger clients with larger budgets. But as she turns that wedge on the cube around, she instantly realizes she has the wrong sales force and not sophisticated enough offerings. She might discover she will have to invest at least $1 million in new marketing and ad campaigns to build her brand with those future clients. She plays with a variety of organization and financial models hoping an answer will pop out and yet the colors just don’t line up anywhere on the cube.
Or maybe her supporters are telling this particular CEO to find new distribution channels to sell her unique protein and power bars. But after one of her friends does a thorough analysis of her product line and alternative paths to market, she has to face the truth that her products aren’t really as unique as she thought and retail prices aren’t holding up in the face of high competition. Suddenly she questions the wisdom of having locked herself into long-term contracts with her current suppliers. The new manufacturing facility isn’t looking as bright as when she finished renovating and outfitting an old warehouse she leased two years ago in Yonkers. She shudders to think how confusing the Rubik’s Cube will look if she has to find new and cheaper suppliers and or sublet part of her manufacturing plant.
Should she bring on an investor to help finance the changes she needs to make? But that might result in losing a certain amount of the autonomy she enjoys. Should she consider strategic partnerships instead of locked-down contracts with her suppliers? But she has no idea how one goes about doing planning and forming such ventures and what that means for her organization. She’s worked so hard on finding the right people and training and developing them. Are there going to be messy lay-offs and a disruption to the prized family-like culture she has built? And how much will it cost to put together new training and development plans?
But slowly our happy-go-lucky entrepreneur begins to understand how great the opportunity is ahead of her. Even though the sides of her Rubik’s cube are as colorful as Christmas ornaments, she knows that once she has realigned the whites with the whites and the reds with the reds, she will have laid the foundation for something more sustainable that will require less of her time and energy. Her obsession with generating revenue at all costs will be replaced with an organization that aligns incentives with performance, attracts and retains the best talent while simultaneously offering new roles and opportunities for her team as the business grows. And most importantly, her fear of becoming just another faceless corporation will dissipate once she realizes she can make it happen just the way she wants it to, just much better and stronger.
And like the physical Rubik’s cube, the one business leaders play with when making decisions about growth can and will be used over and over again.