Each new stage of growth makes it a little harder and a little more complicated to stay on top things.
There is more money coming in, but you’re spending more too. You’re not as close to the numbers and if you’re mostly judging success by what’s in the bank account and/or “getting by” with a bookkeeper, you don’t really know your real numbers.
There are more people. You don’t have the time to check in as often so you’re not always sure what is happening. Without that data, you and your team are essentially guessing about what the problems are and what the priorities should be.
There’s more to keep track of. You spend a lot of time trying to figure out what people were supposed to do. It’s not always easy to tell what’s a good excuse and what isn’t. You aren’t always there to answer questions or deal with problems. You have to hope people get things done and get them right.
You don’t have the same information, the same resources, the same feel for your business. You are flying blind.
- Consider the company with no controller. One of the partners bought a BATMOBILE, among other things, on his company AmEx.
- Another lost $1.5 million when a “trusted” executive underpriced their top-selling product for over a year.
- One executive took over a group that hadn’t been truly managed in a long time...and discovered a cocaine smuggling operation was being run out of the west coast office.
Bad things happen when you’re flying blind.
Growth changes what it takes to stay on top of your business. You need to build new kinds of formal infrastructure, planning and organization to know what’s really happening and manage the increased workload.
Three important places to start:
1. Upgrade your accounting.
The single most dangerous place to try and save money while you’re growing is in your accounting department. “Getting by” means getting in trouble.
When you’re small, you’re closer to the cash, the spending and the customers. You can see all of it and you touch most of it so you tend to have a sense of the numbers.
Growth makes it impossible to have the same feel for what’s happening. There’s more money going into your account and a lot more going out. You have less time to advise and monitor your people so it’s easy for waste or fraud to creep in.
You need to know your real numbers to know what’s really happening and what isn’t. You need financial controls in place to protect your profit. You need people who can help you read the patterns in the data. The right people in the Controller and CFO roles give you a map to the minefield and actually let you go faster.
2. Build systems for efficiently gathering data. (Reports)
DON’T FREAK OUT. You can create a REALLY SIMPLE report that quickly and simply gathers critical data. It’s easier and faster for someone to fill out, and another someone to read, a really simple, standardized, electronic report that you can share and keep than it is to have 15 conversations where everyone writes down something different in their own damn notebook.
You’re ALREADY spending a lot of time and energy to gather information that is incomplete and inaccessible. Creating a simple, well-designed, electronic report is low hanging fruit if you want to get critical information without creating a paperwork nightmare. Put reporting systems in place.
3. Pay attention to your people.
Every company has great people and good people and problem people. The natural chaos of fast growth makes a lot of problems harder to see—including lazy people, attitude problems, even abuse. People who thrive in chaos may not be a good fit for the structure you need to create now.
It’s easy to assume people have things handled if you can’t see any problems, the results look o.k., or the explanations are good enough.
Anything you’re not actively managing is bound to go off the rails, sometimes doing major damage when it does.
You need to know 1) what their RESULTS really are and 2) HOW they are producing them. Start with your key leaders. Don’t guess and don’t hope. KNOW what they’re up to.
Flying blind is a very bad way to run a business. It’s a very dangerous way to run a fast-growing business. If you want to succeed you have to scale.
Build your infrastructure.
Part of successfully scaling is shifting from informal infrastructure to the formal systems and processes that can grow with you.
Read more about building the infrastructure you need HERE.
About the Author: Alecia Huck is a hard person to find and a good person to know. She specializes in working with fast-growth companies who need to learn the block & tackle skills of leadership; how to hold people accountable, run great meetings, keep track of people and work--the kind of tactical support that it is really hard to win without. Find out more HERE.