Achieving growth is on every organization’s strategic planning list. But experiencing rapid growth in a very short time can do major organizational and financial damage in no time. Making a successful transition from a small-and-growing business to a “big” or merely bigger company is critical, and many organizations fail altogether when crossing that threshold.

As an organization grows, new sets of problems and opportunities emerge requiring different solutions. What worked last year when there were only 10 or 20 employees may not be the best approach when there are 75 or 100.

Companies on the fast track must recognize that the decisions made during their transitions will either support future prosperity or simply compound the problems going forward. Managing growth successfully therefore, requires a different management performance. Effective leaders must transition from working in the day-to-day tactical affairs of their businesses to working on their overall business strategies.

Keeping growth smart and profitable
Revisiting the business plan is vital to managing expansion. As a business grows, its strategy must also evolve.

For instance, an organization may need to shift its focus (and redirect its resources) away from winning new customers toward sustaining its most profitable relationships with existing customers.   

Likewise, sales forecasts must undergo realistic scrutiny since companies in fast-growth mode can quickly become over-optimistic. Unless systems are under control, profits can be compromised. It’s not uncommon for fast-developing companies to boast decent revenues while showing little or no profits during growth spurts. Remember, growth without profitability is senseless and organizations must diligently keep an eye on the bottom line.

Capital and cash flow, therefore, are two of the biggest elements in big-growth management. Both are key factors in assessing and pursuing any new opportunities.

Understanding capital requirements is critical and organizations must carefully control their working capital. When resources are stretched to the limits, companies may need to make the tough decision to pass up an attractive venture or customer, particularly if pursuing it would mean depriving the essential funding needed to sustain the core business and its functions.

Cash flow is the lifeblood of any business and cash constraints can be the biggest factor in a growing company’s collapse. A big-growth transition period will likely bring on the need for more sophisticated financial management tools to help generate frequent reports and closely monitor cash flow, profits, and other critical numbers.

Addressing infrastructure
Companies rely on volumes of information. It’s a repository that expands exponentially as a result of an organization’s rapid growth. The bigger and faster the growth, the harder it is to share information, ensure accuracy, and maintain operational effectiveness.

From IT, to processes, to quality control, having the right systems and standards in place becomes essential to effective growth management. Most companies also find it necessary to reorganize or restructure internal departments and organizational responsibilities to better manage growth issues.

In all, companies must create innovative and workable systems that deliver control over growth without jeopardizing further forward movement, crippling it in the present, or hurling the organization backwards. The right decisions will sustain profitable growth for the future and help prove the value of your business.