Your Unique and Precious Business is Eminently Predictable

When Rand Stagen came to EO San Francisco, he put up a picture of his daughter when she was about a year old. And he said, “My daughter is unique, precious, and largely predictable in her development.” And after a long pause he added, “just like your business.”

That hit me.

Your business is unique and precious. It is something you created, likely out of little more than an idea. But in many ways, it is largely predictable.

In a growing business, there are milestones, milestones where it is easy to get stuck. Getting stuck, in large part, is due to not knowing that you are at a predictable milestone.

I worked at a company once. And this company struggled with strategy, leadership, and creating new processes. At the time they had about 177 employees. About 5 years later, when they sold to a larger company, they had 178 employees. It’s safe to say they got stuck.

?

Understanding the Growth Milestones

In many cases these growth milestones and the famous “Valleys of Death” are tied to revenue. And while that seems to work with some predictability within a specific industry, I’ve found employee head count to be a better predictor across industries.

Listed here are the milestones. To be safe assume a plus/minus range around the numbers.

a.????5 employees

b.????10 employees

c.?????25 employees

d.????50 employees

e.????100 employees

f.?????200 employees

g.????500 employees

h.????1000 employees

At each milestone the nature of the challenges facing your organization is different. The needs of your team and organization evolve. What works to get you past 10, won’t necessarily work to get you past 25. What got you past 25 won’t work at 50 or 100. Your approach will need to evolve along with the changing challenges.

And the numbers are just general guidelines. You’ll need to assess your specific situation. Like the company at 178, that would essentially be the 200 milestone. They made it past 100 but got stuck on the next level. You might find yourself at 18 or 28. Both would be the 25 milestone.

Now, some have stressed the importance of staying agile and innovative to navigate these milestones. Agility would be needed if you put off the changes you know are coming and necessary. Innovation is important if you’re try figuring it all out on your own.

Instead, I suggest you to focus on adaptability and getting help.

Adaptability

To embrace the changes and make them stick, embrace and build an adaptable culture of change. The first step in that is knowing that change is inevitable. And the next step is navigating your changes with the head, heart, and hands approach outlined by Rodger Dean Duncan in Change-Friendly Leadership. He outlines five more steps in his book to create a change-friendly culture which is going to be very important for you as you grow your business through successive milestones.

Navigating with Help

You don’t need to reinvent the wheel. Others have navigated through these transitions before you. Enlisting help from someone who has seen it and navigated it before will save you tons of time and frustration. And there are even people who specialize in one or a few of the milestones.

Let’s go over those again, with a little detail on what you can expect at each.

Growth Milestones

a.????5 employees: The Startup Phase

b.????10 employees: Solidifying the Foundation

c.?????25 employees: Moving from Founder-Led to Team-Led

d.????50 employees: Formalization and Departmentalization

e.????100 employees: Expansion and Diversification

f.?????200 employees: Strengthening the Corporate Culture

g.????500 employees: Globalization and Larger Market Presence

h.????1000 employees: Becoming a Major Industry Player

?

Examples of Key Challenges and Adjustments Associated with 3 Specific Milestones

10 Employees: Solidifying the Foundation

The complexity of your communication and relationships is 5x what it was at 5 employees, so your strategy and processes likely need an overhaul just to keep up.

Key Challenge: Ensuring everyone is aligned with and clear about the company's goals.

Strategy Updates: Quarterly strategic planning. Documenting and bringing to life your organization’s Higher Purpose, Core Values, and BHAG.

Process Adjustments: Building out your Playbook, and the introduction of performance metrics and regular team meetings. Dial in recruiting and hiring processes.

25 Employees: Moving from Founder-Led to Team-Led

At this size there are too many people for the Founder to directly manage. Your systems and strategies must evolve again to meet the new challenges.

Key Challenge: Transitioning from founder-led decisions to empowering a team.

Strategy Updates: Delegating leadership roles and creating sub-teams.

Creating clarity around Vision, Values, and primary responsibilities to enable collaboration.

Process Adjustment: Regular 1 on 1 meetings with direct reports at every level. Introduction of team leads and more rigorous HR processes.

50 Employees: Formalization and Departmentalization

This is a phase that can start to feel “Corporate”. But there is a balance between consistency and maintaining the soul of the organization.

Key Challenge: Maintaining consistency and standardizing operations. ?

Strategy Updates: Focus on organizational structure. Set the culture to one of management as supportive and empowering instead of the old hierarchical models. Breathe new life into your Higher Purpose, Core Values, and BHAG.

Process Adjustments: Introduce specific SOPs. Upgrade dashboards and tracking. Invest in training and development.

?

Tips for Successfully Navigating Business Growth Milestones:

Finally, here are a few tips for navigating the change that’s coming your way.

Stay proactive rather than reactive. Anticipate what’s coming and prepare for it before it gets here. ?

Involve employees in your strategy creation. Quarterly strategic planning sessions provide a great venue for this. Being involved will achieve greater buy-in, alignment, and advocacy for achieving your next set of goals.

Invest in continuous learning and training. Keep reading. Get a coach. Take a course. Your own personal growth will be a protection from getting stuck at one of these milestones.

Regularly reassess and adjust. From strategy to goals to customer experience, assess your current state with brutal honesty and candor. Compare to where you want to be. And make plans to get from A to B based on your assessments.

Where Are You Now?

No matter what milestone you are near, or which 2 you are between, it’s important to keep an eye on where you are and when you are likely to run up against the next need for significant change. Anticipating and preparing will help ensure you smoothly navigate each new phase.

?