Strategy

25th January 2018

Imperative

I have spoken to many business leaders over the years who perhaps ran a business for someone else, a group, a plc for example before they were bitten by the entrepreneurial bug and launched their own business. There often seems to be a pattern which forms in these circumstances. The business starts and grows quite well and quite quickly and after maybe two or three years they hit a plateau and seem to get stuck. Why does this happen?

In reality there will be lots of reasons. The rapid start, the quick growth can be put down to the fact that they know what they are doing. They have done it before and so they come along with a set of mental models for what good looks like and a knowledge of what works. They are probably more cognisant of what not to do as well as being sure not to replicate the things they found held their previous business back. Experience has value. Knowledge has value. Learning has value.

So why do they then slow up and plateau? There will be many reasons but one often forgotten difference is the dynamics of a larger company. There can often be a culture of performance which is experienced but not necessarily understood and is quite difficult to replicate in a recent start. I know in many of the businesses I have taken over there was a tangible pressure to do better than my predecessors. Often in larger companies there might be a positive sense of competition between branches, departments and divisions. This can sometimes be toxic but it is often valuable in the way that it provides an imperative for higher performance. There can be an incessant striving for the next promotion, the next contract or the next award which can all combine to provide a strong undercurrent of improvement. Of course, sometimes all of these things can turn toxic but in the absence of toxicity they fuel an onward and upward trajectory that can be absent in the new company.

In the new company there will be an imperative to start quickly, to prove themselves, to move away from the uncertainty of start-up, which can, in part, explain the rapid beginnings. But like all ‘away from’ motivation, the further we move away from, the less motivation, the less imperative, there is to move forwards. The leadership of the new company have to find imperatives of their own to keep building, to keep improving. They need to find not just the reasons why to keep improving but the techniques to enrol and enlist their growing team to want to deliver more, better and faster. I sense that it can often be running out of that particular motivation and skill set that causes businesses to stop scaling and start flattening out the growth curve.