Like me, you probably had growth-envy of companies who experienced serious enough expansion to land on the Inc 500’s Fastest Growing Company List. Well, hold onto your jealousy while you read this: Several studies and follow up studies conducted on these winners showed that 2 out of 3 of these coveted companies experienced negative growth (shrinkage as on Seinfeld) or outright bankruptcy. They significantly underperformed companies who, 5 years previously had 1/10 of their growth rate. I was as surprised as you probably were to find this out but it confirmed a lot of what I was seeing myself when I met these companies.
Here is what I see is happening with these hot shots:
Emotional Decision Making
When CEOs can’t separate business from emotion and make personal decisions on major business needs like new investment and strategy, businesses suffer and sometimes fatally. For example, one such fast growing CEO I met knew she had to increase her personal brand visibility but had a mind-block about it and so the business continued to be negatively affected by her highly personal preferences.
Too Operationally Entrenched
When leaders can’t step away from constantly working in the business to work on it, disaster ensues. I’ve had many CEO clients who have wasted thousands of dollars of investment with me because they simply couldn’t create the space and bandwidth they needed to build the business further.
Why bother lifting your head from the sand if the money is pouring in, right? That’s a mistake I encounter a lot with rapid growth companies. The lack of urgency for any long-term vision or solution. The here and now is so urgent and looks so rosy, why re-invent the wheel? At least most of them think this way. They say “we’re growing, we’re fine, we don’t need to change or look at anything else”. Famous last words.
Trouble With The Troops
Finally when the business grows exponentially in a short amount of time, often quality of service or product suffers which turns around to bite the staff in unmentionable places. Add to that, the monumental multi-tasking required of a lean or new team, then you’ve got trouble with the troops which always spells disaster.
So while you’re pining to be on everybody’s fastest growing company lists, take heart and beware-the grass always looks greener. Learn from them and tend your own garden with a lot more care.
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