A lot of founders or CEO’s, especially if their companies raised some funds from investment capital, think day and night about the pace of growth of their businesses. They don’t sleep well after reading the articles about Uber which is growing faster than anybody has done before. They want their businesses to grow even faster. And their investors call them everyday to make sure that they didn’t forget about the rapid growth. Growth, growth, growth.
Let’s look at Twitter or Evernote. Some time ago these companies were so-called “unicorns”, or rapidly growing businesses with extremely high potential. Both of them were very attractive both for gifted professionals and investors. Both of them had been expected to have a successful future. But now Twitter is facing a lot of strategic difficulties (not to mention that the company has never been profitable). For instance, some time ago the Business Insider reported that “Twitter is opening its wallet, doling out cash and more stock, to keep employees from heading for the door”. And Evernote was called “the First Dead Unicorn” by famed Silicon Valley investor Bill Gurley.
What’s the problem with fast growth? Maybe it is just too difficult to show impressive results every quarter? Maybe it is hard psychologically to do your everyday routine when everybody is expecting too much of you? Maybe it is just hard to find enough money to keep the highest pace of scaling your business?
Maybe. But I guess that there are also different reasons.
When we are growing up as children it is very important for our bones and muscles to grow synchronously. If our muscles grow faster than our bones they become too heavy for our skeleton which may cause some problems.
The same things are important in business. If your company has got enough money from investors you may open offices in distant countries or develop a lot of products simultaneously. You may hire a lot of professionals and buy a lot of machines for your factories. But business in not only a matter of scale, it is also a matter of efficiency, and a matter of productivity.
Typically every group of seven employees needs a boss (a supervisor, chief, team-leader – it doesn’t matter). They need a person who will set their goals and solve all their problems during the course of achieving them. Of course, all of us have heard a lot about “flat organization’, operating completely (or almost) without bosses, but these ideas do not always work and not everywhere. If there are about a thousand people in your company it means you need more than 140 bosses (and each group of 7 bosses also needs a boss).
If your company is large it’s revenue is significant and it’s financial structure is sophisticated – so you need a skilled CFO and a good financial team to manage this matter. Even if your company is just a very popular web-site you need not only creative programmers but you also need engineers, marketers, designers and HR generalists. Somebody has to fix your server’s problems, to keep your offices clean and comfortable, to keep an eye on your loans and bank accounts, to answer the calls from your customers, to translate your interface into different languages and so on. Somebody has to code and somebody has to organize the process of coding, to make it not only creative but also productive.
Facebook is not only Zuckerberg but also Sheryl Kara Sandberg (a COO of the company). Google is not only Brin and Page, it is also Sundar Pichai. Brin and Page didn’t want to be CEOs to not remain creative, not to sink into operational routine. It is considered to be a wise decision, but when Pichai tells them something about operations they understand him very well.
It is said sometimes that progressive companies need “evangelists” – people (typically founders) who believe in ideas the company is based on, and who are able to impassion the employees. People who can make their staff believe that they making the world a better place to live. Of course every company needs an “evangelist” but they also need Chief Operation Officers who keep an eye on the bottom line.
Your ideas are your muscles, they make your company stronger. But your ideas shouldn’t grow faster than your “bones” – the structure, the framework of your company. You need not only gifted, creative employees to improve your ideas, you also need somebody to organize the stuff.
If you are a founder of a small startup you also can be a CEO. But if your company is large and especially if it is growing fast you need somebody experienced in operation. If you are not – hire a professional. Too many great ideas have died just because of bad performance.
And if your company isn’t ready to grow, just stop for some time. Let your bones develop, even if you see great opportunities. Some years ago I almost lost my business just because we tried to do everything at the same time – to launch a new product line, to improve our production facility, to open subsidiaries and to develop new distribution channels. We hired too many new employees, we started too many projects simultaneously and invested more money than we had. The only reason was that we were trying to grow too fast. Be careful.