Preparing for the Next Stage of Growth
What to do when your business hits a plateau.
It feels great when your business is growing, getting new customers and adding employees. You’re executing on the company’s vision, and your strategy is paying off. Even though growth brings its own set of challenges, everyone associated with the business is having fun.Things are good.
Inevitably, however, your business will hit a plateau.
All of the growth and excitement will come to a standstill because the people, processes and systems that got you this far are not the ones that will enable you to take the next leg of the journey. This usually causes a lot of uncertainty and anxiety. And for a good reason. What you’ve built seems to no longer be cutting it. Markets change, new competitors emerge, and you hit the occasional innovation roadblock. Not to mention the typical challenges that come with scaling an increasingly complex organization.
It’s usually at this juncture when most companies begin entertaining the possibility of selling the business. Sometimes selling is in line with the entrepreneur’s original plans. Other times, however, selling becomes an escape for an entrepreneur who’d like to grow the business further but doesn’t know how.
For businesses that want to stay around -- that want to have a lasting brand with a significant impact -- this is where you have to dig deep and evolve.
I talk a lot about the “S-curve” to describe a common growing pain businesses face. It’s the model used to describe, and sometimes predict, the performance of a company. The S-curve charted graphically, shows an initial rising slope of a steep mountain followed by a plateau at the summit.
When Infusionsoft started, there was no market for all-in-one sales and marketing software for small businesses. We needed to create the market, and create it we did. This led to years of stellar growth as we rode the wave of market leadership.
After a decade of impressive growth, we found ourselves in a position where shifts in the overarching technology landscape, customer demands and expectations changed. We hit the point of inflection or the "top head" of the "S" where growth tapers off, and our business began to level.
As a founder, this was a terrifying place to be. But I had to make the decision that many of you will likely face at some point -- continue with business as usual or make drastic changes to jump to the start of a new S-curve.
Below are the three changes we made to propel our company to the next S-curve.
1. Adjust product market fit.
This is a difficult situation, as you need to continue to invest in innovations in your current product(s) while also allocating resources to new products based off of where you see the market going. The feeling can be akin to running two separate companies as you balance assets against maintaining your current market leadership and betting on where you see future opportunities.
2. The power of pivoting.
The word “pivot” is one of the most frequently used pieces of jargon in the tech community. It was even mocked in HBO’s satirical comedy Silicon Valley. That being said, pivoting or shifting is essential for businesses, but particularly so for tech companies that operate in quickly evolving spaces.
Making these strategy shifts is no easy thing. You have to make top-down decisions that will ultimately affect nearly your entire workforce. You have to ask yourself if it's better to make a tough call now or to delay it and all be out of a job in a year? It is clearly the former option, but you also must be transparent with your employees as you make these decisions.
3. Fine-tuning your leadership team.
You have to adjust your leadership model based on the size of your company. This sounds obvious, but I have seen many leaders make this mistake over the years. They run a 300-person company in the same manner that they would a 50-person company, which often proves fatal. The comparison I use is that my wife and I had to adjust our parenting mentality when we went from one child to six children. By doing so, we became better parents, and our family was happier. The same is true when running a business.
First, you need to acknowledge your limitations. You should invest some time and energy into mitigating these weaknesses, whether it be by seeking the counsel of others or attending courses. More importantly though, you need to bring in best of breed experts who can help you take your company where it needs to go.
Ultimately, if you’re willing to adapt and react, you’ll be on the path to building a lasting brand.