WHAT HAPPENS WHEN A BUSINESS GROWS TOO FAST? - Discover 10 Vital Signs It Has Reached Harmful Levels + Tips On How To Handle Them

Business growth appears to be a positive sign that a company is performing optimally, but at what point does growth become a harmful thing that could come with negative consequences?

As you read on, you will discover possible signs to watch out for when a company is growing too fast and could be harmful to the overall performance of the organization.

1. LOSING TOUCH WITH THE CUSTOMER

At the start of a business' growth, the business tends to give undivided attention to its customers. But as sales start to sky-rocket, it is very easy for a business to get sloppy with how it treats its customers, particularly when the system becomes automated and the sales process lacks a feel of human interaction.?

Way forward?

It is very easy for customer service to fall flat and become almost non-existent. Even if you are getting new customers, the downside to this kind of growth is that old customers may become dissatisfied. What this problem could lead to is customer retention issues. The key element that makes a company successful usually revolves around the customers and products or services rendered.

So even in times of rapid growth, customer service has to be given priority to ensure sustainable growth is attained.

2. COMPROMISE ON STANDARDS

With the allures of wealth lurking around the quick rise that follows business growth, there is the tendency for business owners to want to scale the productive capacity of the business over night - this may prompt business owners to want to cut corners to ensure output levels are sustained at break neck speed.

In the process of trying out alternative means of scaling the productive capacity of the business, a lot of unconventional practices may set in - all in the bid to keep output levels at an all time high in the short-run.

The downside to a lot of these unconventional practices is that the final output may in some way compromise the standards of the brand.

What is the way out of this problem?

Planning ahead! This may sound cliché, but in the best interest of a growing brand, the best way to stay ahead is to plan ahead and ensure that the business development roadmap factors in such possibilities like the need for growth and how to tackle the issue in the event that it arises. Doing this gives a business the leverage of foresight that accompanies proper planning

3. OUTSOURCING CORE-BUSINESS FUNCTIONS

As a business, trying to take on new customer orders that are obviously above the capacity of your business' ability is common place, this is one activity that growing businesses are known to embark upon - it is the tendency to outsource some of its activities to third party vendors with a comparative advantage.

Outsourcing in itself is not harmful to a business, however there are some key functions that a business cannot afford to let go off its grip. These functions are those that border around its core-value proposition. These are the secrets that keep a business relevant and helps it maintain its position ahead of other similar brands.

In the event that a business outsources its core business functions, it could mean that such a business has opened itself to become an easy target for the competition who gets to know the secrets behind the core functionalities of the business.

To avoid this error, a structure should be built around the core business functions of a business such that no matter how fast the business grows, it does not get to outsource its core-business functions.

4. EMPLOYEES GET OVERWORKED

This is a trend that keeps recurring among fast growing brands with an undefined structure to manage its workforce - usually the trend starts when the management team starts trying to cut down on business expenses, and one key area they often target is the workforce.

The problem starts when the management arm begins to lay-off staffs without making adequate preparation to make up for the missing link that these actions could cause to the proper running of the business with reference to maintaining the productivity levels of the business. The next line of action that follows is to put undue pressure on the available employees by putting the burden of making up for the forgone productivity from laid-off staff on the remaining already strained employees.

The problem that would however ensue from this kind of action is that the business soon begins to compromise quality for quantity thus the overall performance of the employees drop to an abysmal low point all in a bid to meet up with targets set by the management to keep productivity at it previous levels before lay-offs took place.

A common pattern that arises when problems like this occur is that employees start falling sick out of burn-out or negligence of their health and for those who do not fall sick, they begin to scout for alternative job opportunities. The ripple effect of this problem is that, the growth that may have been experienced by the business soon starts crumbling and eventually fades away.

What is the way forward?

To ensure productivity is maintained, there should be a high premium placed on the welfare of the employees of a business to ensure that they operate at optimal levels at all times.

5. RESOURCES ARE STRETCHED TOO THIN

It is a given that needs will always outnumber the resources required to meet them, and this is because human needs are insatiable - we are always in need of more and more resources. On the other hand resources are in short supply, hence the need to ration the resources between the needs that are ever increasing.

In any business, this trend also holds true. The resources needed to fulfil the tasks at hand is usually?in short supply and as a result careful thought must be given to how resources are managed.

However, when resources are stretched too thin that they are unable to meet the required basic needs to complete tasks in an organization, this is a clue to suggest that the resources supplied by a business is not able to keep up with the task at hand, and as such is headed for the rocks.

In the event that the business may have been experiencing growth, if resources continue to be stretched too thin, the tendency is that activities may soon get crippled and eventually come to a stand still - which in turn will lead to a decline in the growth trajectory experienced by the business.

So, what is the way forward?

To stay productive, a business should always ensure that it does not undertake more activities than it can handle per time so that the available resources would be sufficient to cater for the needs of the day-to-day running of the business, and if there is need to expand operations, then this could be achieved by planning ahead and making necessary provisions to cater for the new capacity that the business desires to handle.

6. TEAM MORALE IS LOW

One key attribute that distinguished humans from machines is that we are emotional beings, and our productivity is attached to our emotional wellbeing.

When a business begins to grow too fast, it may soon get carried away by the prospects that come with growth and begin to fantasize with the allures of checking the growth metrics and sentimental feedback from the crowd.?

This could however blind the business owners to the real dynamics behind the growth of the business, which is the human capital putting in their effort to keep the growth numbers moving upwards.

If care is not taken, the emotional wellbeing of the employees may begin to drop and eventually lead to a decline in the productivity that comes with low morale.

To keep team morale always on the high side, team dynamics should be incorporated into the everyday activities of the company such that there would always be a way to measure each team member's emotional wellbeing and improve it where necessary.?

What is the way forward?

Team dynamics that could come in handy are things such as: Team bonding moments through activities like games and sporting events, celebrating excellent performance and awarding outstanding employees with necessary recognition to boost their morale and acknowledge their effort, celebrating employees on their birthdays and giving pregnant mothers special treatment to help them through their maternal experience.

7. RECURRING MISSED DEADLINES

In the running of day-to-day activities of a business, deadlines are a necessary check-point to ensure that projects are delivered on time and results are consistent with the overall vision of a company.?

In rare circumstances, due to unforeseen circumstances and situations that may be beyond the control of a business, deadlines may be missed. But this ought not to be the norm, as this could become a thing that would tarnish the image of a business as one that cannot keep to deadlines.

What this implies is that when deadlines are missed on a recurring basis, this soon forms the impression customers have of an organization which could eventually make customers decide against patronizing a business with a reputation of missed deadlines.

What is the solution to missed deadlines?

To ensure that missed deadlines do not cause negative feelings, communication should be a major function that a business should incorporate into its working modalities such that even if there is a missed deadline, the customer would be fully aware of what caused the need to shift the deadline to a future date.

8. NEGATIVE CUSTOMER FEEDBACK

Customer is key to the growth of any business and as such from time to time customers would air their grievances in the event that they are not satisfied with the products or services they purchased. This in itself is not a problem, but a sign that a business is actually functional, however the problem arises when a company does not have a functional customer support that quickly handles complaints and helps resolve them.

When a customer makes a complaint and does not get the complaint resolved, only then will the customer be moved to make moves that would paint the business as a bad one that does not care about its customers and by so doing give a negative rating to the business through various channels such as online reviews on social media or via word-of-mouth transmission which is even more detrimental to a business' growth.

If customer feedback is not handled properly, it is just a matter of time before a business will go out of business as new customers would avoid such a business that has accumulated negative customer reviews.

What is the way forward?

Structures should be put in place to ensure that a business gets to resolve customer complaints on time and by so doing the negative tension that could have mounted up in the mind of the customer is relieved and replaced with good will and friendly impressions.

9. MASS QUITTING

Human capital is a vital part of any company's growth, as the productivity of the business depends on its employees. However, in the event that there is a toxic work place culture that does not favor employees, there is high probability that employees will be on the look out for alternative job opportunities. In the event that the work place culture gets to unbearable levels, employees may begin to leave in droves thus triggering a viral trend that may catch on among other employees.

Each time an employee quits, other employees start to ask questions about what could have triggered such actions; if there is however a valid reason that resonates as a just reason for an employee to quit which bothers on poor work place culture and working standard, this could trigger a viral response among other employees to embark on similar actions as a way to show their grievance towards the company's leadership.

If this trend is not handled carefully, whatever growth a company may be experiencing will soon become eroded as the effect will soon show in the output delivery. Perhaps it is possible that a company can easily find new hands to replace exiting employees, there will be a major draw back that comes with re-training new staff to get them to catch up with the already established precedents by previous employees - which could take quite a while for the incoming staff to adjust to.

What can be done to solve this problem?

Employee welfare should be given a priority, and there should be a system in place for the leadership to get feedback from its employees so that issues are identified on time and solutions proffered before they spiral out of control.

10. CASHFLOW IMBALANCE

While the demand for a business' goods or services may be experiencing a boom, by taking a closer look at the accounting records, it could be observed that the difference between the inflow and expenditure of a business would be saying a different thing. In this regard the business may be making a loss due to the overhead expenses outweighing the revenue inflow.

This anomaly may however tend to go unnoticed if the accounting records are not monitored regularly, hence giving the leadership of the business a false impression that it is growing whereas the accounting records say otherwise.

Way forward?

To salvage this problem, effort should be put into close monitoring on a regular basis to balance the accounting records of a business not only when it is time for tax audit, but by setting a regular schedule whereby the accounting records will be checked to ensure the expenses do not overshadow the revenue generated.

This way the necessary action could be taken to curb the excesses before they get out of control.