Charting Your Business Timeline - Years 10 to Retirement: Managing Maturity
With the maturity of becoming a decade-old company comes stability. That's the good news. The bad news is that while your company stabilizes, markets continue to change, competitors arise, technologies disrupt and the world otherwise evolves. So the primary growth challenge in this era is to keep innovating.
You've spent years building systems to formalize the way your company is run. Now take a look at what you've made with an eye to tearing at least some of it down. Channels of communication that worked well for years will be found to leave important constituencies out of the loop. Department leaders will be seen as more concerned with turf wars than growing the company. Policies that once promoted growth will be recognized as growth-retardants. Markets that once seemed they would expand forever suddenly mature themselves and become slow- or no-growth ventures.
This is often a hard phase for entrepreneurs to endure because everything they've built is now being re-evaluated. But the way you've always done it may no longer be good enough. Given that, it's fortunate that now is the time for entrepreneurs to begin grooming a potential successor and initiate the process of stepping back from day-to-day operations. With new leadership coming on board and the founding entrepreneur taking a smaller role, it will be easier and more natural for the organization to embrace new ways of being.
The tendency of many entrepreneurs is to select a successor who will do things just the way the entrepreneur would have done them. If the organization is having trouble adjusting to change, however, this is usually the wrong approach. The question is not what kind of person the founder is. The question is what kind of person the company needs. A visionary entrepreneur who can grasp the whole picture but isn't good with specifics may have founded a company that is now in a mature industry and needs a detail-minded manager to squeeze all possible efficiency from the enterprise. Often the entrepreneur can't properly ask or answer the question of what the company needs now and should assemble a group of people from inside and outside the company to research it.
Even the perfect successor can rarely step into a company and run it as well as someone who has spent time learning how the company does things, what the problems with its products and markets may be, and what solutions have been tried. Of course, sometimes a complete new perspective unclouded by past events is beneficial. But usually a successor performs better if they're trained in a broad spectrum of jobs within the company in various departments and at various levels over a period of years before he or she is ready to step into the lead role.
Identifying and grooming a new successor is the first and most critical step to allowing an entrepreneur to step back from day-to-day company affairs. But it's not the only one and, in many ways, it's not the most difficult either. Many an heir apparent has turned out to be more apparent than heir because, when the moment arrived, the entrepreneur had not prepared either herself or the organization by moving toward the change in stages. One way to do this is to start taking vacations--real vacations--of increasing length, during which the successor is left in charge and the entrepreneur is only contacted if absolutely necessary.
A Guide to Business Timelines
- Year 1: Starting Up
- Years 2 to 5: Time to Grow
- Years 5 to 10: Growing to the Next Level
- Years 10 to Retirement: Managing Maturity
- Moving On: Exit Strategies