I have been working on a number of pitches to potential clients this week, and was pleased to be asked for interview for one of them.
The requirement was for training for leaders of “fast growth” SMEs, which came from a Local Enterprise Partnership (LEP).
My proposal was carefully researched (of course!) so I put forward a programme which would cover most things.
In the interview, I was asked a question which with hindsight is really obvious, but got me thinking none the less: “What would you say are the characteristics of a fast growth company?”
In reflecting on this question, and my answer, in the hours since, I have established what I think are some of the most immediate criteria.
The first point to make is that there is no one definition of fast growth companies. It depends on who you talk to, and where they are. In Silicon Valley it would seem – from most business magazine headlines – that fast growth equals “unicorn” status, where a market capitalization via an IPO of $1 billion is achieved.
A Unicorn of it’s day…
But I think there are some other, more achievable and more representative characteristics:
1) You must be selling something, and more of it. Yes we all know that turnover is vanity, but without revenue, where is the cash flow, the profits and future investment?
2) You need a plan. Written down. Which is actually used to help run the business. No plan equals no vision, and no vision means it is harder to make crucial decisions about strategy.
3) You will be very busy. This probably means long hours, and maybe the blurring of the much vaunted work/life balance. But then every successful business we know has put in the effort when required – Gates, Dyson, Jobs, Branson, and the other usual entrepreneurial examples all did what they did in 24 hours a day.
4) “Where there’s a hit there’s a writ” – at some point you will need to protect some Intellectual property, or take legal action due to infringement, nonpayment or in connection with employment.
5) To make it fast, it has to be organized. In short – systems. Not just IT, which continues to great IF it works, but a business model which is customer friendly and a way of the business running, and indeed growing, when the proprietor is not there.
6) People: both the problem and the solution. Fast growth means involving more people, either by employing or sub-contracting. This brings the need for leadership and management skills to the fore.
7) The graphs do not all go one way in straight lines: and despite the plan, the actual will be different. Arguably the most important point – it is what you do about the variances in your budgets, plans and productivity that will do more to determine your success than the plans themselves. You still need direction, a sense of purpose, a vision. But fast growth companies will experience a higher level of both ups – and downs.
This list is not complete, and probably never will be. But it does give you a clue about what fast growth means, not just in numbers but in terms of what it is like working in it.
These points will also help you to think about what you want in growth terms, and what changes you may need to make if you are to grow as quickly as you would like. Because there is another inevitability: you will have to change.
So on to a question I asked the people at the LEP in the interview: what have I missed?
Phil Ingle 11.2.16