Leadership

3 Distractions Growing Companies Must Avoid

When companies grow, they can often lose their focus. But you can prevent that outcome

Written by Randall Litchfield

You would think that complex is inherently more difficult to achieve than simple, but no. Hemingway reinvented the novel in simple sentences; Picasso reinvented art in simple brush strokes. If simple is easy, why aren’t we all Hemingways and Picassos?

The answer lies in the old adage: “art is knowing what to leave out.” What we see in a masterpiece sculpture, for example, is the artist’s vision of what to leave out of a block of marble. What we don’t see is the painstaking hours of chiselling and polishing, and years of practice and experimentation that went into this act of creation. Likewise when growing a company.

Successful businesses look easy from the outside because we don’t see all the previous failure it took to get there. It’s funny how this perceived ease often gets expressed as a verb. They occupy a market niche, they define a product category, they took first mover advantage, they own proprietary technology etc. What isn’t apparent are the mistakes and mishaps that brought the business to this sublime state. Mistakes like hiring that “killer” senior sales person who, it turns out, can only sell themself; launching that untested product too early to get out some embarrassing bugs; acquiring that company with an unbridgeable corporate culture; taking that loan you didn’t need because of low interest rates; and letting rapid growth overwhelm every system and procedure until it is a near-death experience to replace them.

We’ve all been there and we learn—in time—that a big part of running a successful business is avoiding costly mistakes. That is, knowing what to leave out. Everything is about focus and adhering to that popular U.S. Navy acronym of the 1960s—KISS, for Keep It Simple Stupid.

KISS typically isn’t a problem when we start businesses, since scarce initial resources leave us little choice but to concentrate on a few things. But growth brings complexity, with all its distractions and misadventures. That laser focus that got us through the startup years easily refracts. Three factors in particular conspire to distract us from keeping it simple:

1.     Growth becomes its own dynamic. Rapid growth is the dog finally catching the car bumper—be careful what you wish for. Once latching on, you don’t control the pace of your business anymore as you work frantically to keep up. What you don’t want to lose control of is direction.

2.     Businesses grow faster than their capacity to manage. I call this syndrome the $3 million-dollar-itis, which is the typical size a business gets to when the wheels start to fly off.  You only discover you need a new accounting system or production process when the current one starts to flounder. After going through a couple of cycles of this, you finally learn to plan ahead and have the necessary infrastructure in place before you actually need it.

3.     Multiple agendas lead astray. Now that you have a management team, you wake up one day to discover that it’s no longer just about you and your clear (read: simple), founding vision. They have contributing visions too. This is a good thing in the sense that Ford Motor Company wouldn’t have survived if it stuck to Henry’s stubborn view that all customers would ever need was his black Model Ts. But to extend the automotive example, think General Motors just prior to its 2009 bankruptcy. GM offered much choice over many product lines that were re-badged versions of one another. Too many agendas ultimately weakened the GM brand, killing any sense of strategic direction in the process. I’ve caught myself thinking at different stages of Inbox Marketer’s growth: “If only it could stay just like this, with this number of people working in this building on these particular clients”. This was me wishing things could remain simple but, of course, it doesn’t work this way. Businesses either grow or shrink; they never stay the same. The only thing you can do as the leader is make sure that you and your management team grow with it, and that takes serious planning.

In my experience, complexity comes when you don’t have a very developed corporate view.  What was easy when you started becomes more difficult as more and more people must understand and execute the vision. Smart companies never stop developing and implementing that vision and that’s how they anticipate problems and avoid mistakes. They constantly design their future through a formal strategic planning process.

Not-so-smart companies react. They manage short-term and address problems by throwing money and resources at them. Rather than investing effort and expense in the planning process, they end up applying fixes and retracing steps until the enterprise becomes a complex, confusing and expensive mess.  This explains many common business problems today, such as bloated software programs, missed product deadlines, inattentive customer service and—ultimately—bad balance sheets. Complex is just another word for clutter.

The better way is to KISS and tell. Invest as much effort as possible in the plan and then communicate it at every possible opportunity. In the end, simple and complex probably represent equal amounts of work. It’s just a question of when you do it—up front as part of the preparation process, or last minute as emergency measures.

Randall Litchfield was the editor of PROFIT Magazine from 1986 to 1990 and has been an entrepreneur ever since. He is most recently co-founder of Inbox Marketer Inc., a Guelph, Ont.-based email marketing services firm, and a four-time member of the PROFIT 200 ranking of Canada’s Fastest-Growing Companies.

Read more of Randall Litchfield’s columns

Originally appeared on PROFITguide.com