Signs Your Company May Be Growing Too Fast
The market we operate in is very competitive and often operates on the principle of “survival of fittest.” Organizations are always on the lookout for growth strategies, be it hiring niche talent, investing in research and development, winning new customers, or partnering with strategic solution providers that align with the company vision.
There is pressure not just to beat the competition, but also to appease shareholders who want to see record growth numbers. But in this drive, organizations do not always end up in the right quadrant of the growth-share matrix. Sometimes, they run the risk of growing too fast.
You may think, “What is wrong with significant growth?” But it has its own problems. For example, Chinese e-commerce giant Alibaba increased its workforce by 63 percent in 2014. Realizing the company grew too fast, its executive chairman implemented a hiring freeze for this year, which immediately had a negative impact on its share price.
Some of the more obvious dangers of growing too fast include increasing debt, losing track of the long-term company vision, and a higher employee turnover rate. Chobani, a big Greek yogurt brand in the US, learned these lessons the hard way recently. The company’s founder wanted to grow as fast as possible, but that resulted in taking on more risk, quality dropping, and partnering with others who didn’t share the corporate vision. As part of a financing deal, Chobani now has to replace its chief executive.
When you have facts and figures to show you are growing, how can you say whether you are growing too fast or just enough? This is a subjective question to some extent, but there are indicators to watch for. For example, customer complaints may rise, employee dissatisfaction grows, you start focusing on quantity rather than quality, and your partners are unable to scale along with you.
While you focus on ongoing growth, don’t lose track of whether you may be growing too fast. Growth can be a vicious cycle, pulling you down if you want too much of it too fast. Stages in a person’s lifecycle are important, and similarly, a business needs to have its own growth stages in its lifecycle.
