Many entrepreneurs experience a thrill from chasing new customers, signing deals, hiring fresh talent or dealing with the predictable chaos of startup mode. But some entrepreneurs underestimate the challenge that arises: As revenue increases, so does the complexity of running the business.
An increase in the number of people, locations and technology systems usually results in an exponential increase in the complexity of managing an organization. Too often, activities like adding new employees, opening remote locations and setting up additional databases and technology systems can bring a company to a painful stop as it tries to grapple with the growing pains and find solutions.
When it comes to change, businesses are a lot like organisms, they have three choices: They can adapt to the new environment, move to fresh surroundings or die. Most business owners don’t want their enterprise to shrivel up but few can just pick up and move things to another locale. So the remaining option is adaptation. But when it comes to businesses, adapting isn’t an easy job, especially for employees adverse to change.
Workers generally become comfortable in a routine and are often upset by change. Long-term employees who have done a task a certain way for years have a tendency to resist having to learn new processes and adjust to new technology. In my experience, fewer than 20 percent of the entrepreneurial companies I have met specifically assess new candidates for flexibility, adaptability and willingness to change. Later they wonder why their employees don’t willingly embrace change!
In my experience, the only area of the United States that seems to have a natural proclivity for change is the San Francisco Bay Area. This is likely related to the presence of so many high-tech and bio-tech companies like Google and Yahoo. Employees in these industries seem to embrace and welcome change, often becoming bored doing the same routines repetitively.
A friend of mine owned a Bay Area software company hat had been losing some market share. One night he awoke around 3 a.m. in a cold sweat. It hit him that the reason for the share loss was that his company was organized incorrectly. So at 3 a.m. he redrew the entire organization chart for his 180-person company. No one was going to lose their job but literally every employee would have a new boss in the new structure.
At 8 a.m. the next morning he called a 10 a.m. all-employee meeting. At that forum he introduced the new organizational structure, prefaced by the fact that no one would lose his or her job. At 11 a.m. he announced that there would be a complaining and moaning hour from 11 a.m. to noon, the pizza would arrive at noon, and people would report to their new bosses at 1 p.m.
Not a single employee quit and the company shortly thereafter began to regain its lost market share. Now, in most other areas of the United States this kind of rapid change would be disruptive for many employees. Imagine how yours would react!
People go through a predictable set of emotions when faced with change, often similar to what people experience when dealing with grief. First it’s a period of shock, then denial, anger and even depression. Then they usually they arrive at acceptance. This cycle of emotions is predictable and normal. While no one should feel guilty for experiencing a sequence of reactions, businesses usually don't have the time for allowing employees to remain in one state for too long.
Obviously there is no way to magically imbue current employees with a change mentality. The best advice for CEOs is to constantly recruit and hire individuals who welcome and accept change as a natural part of life and business. Over time a company can change its personnel mix.
Employers, especially those in a growth phase, must assess new employee candidates for the attributes that demonstrate an ability to adapt to change. This is the most critical step to take for them to be able to deal with the complexities of growth. Having the right change-accepting employees never guarantees success. But the reverse is a constant truth: If employees won’t embrace change, the best growth plans in the world are irrelevant.