Hyper-growth is the Holy Grail of technology companies. Grow fast enough and you have your choice of acquisition, new investment, and more. Focusing on that goal is natural. Yet, when company leaders become manic in pursuing hyper-growth at the expense of all else, problems start to develop.
You spend so much time chasing high growth that you never stop to consider the problems growth brings. That’s the bad news about hyper-growth companies.
The good news is that you can keep your company from collapsing under the strain of high-octane growth. The first step is awareness. Review these common hyper-growth mistakes to see which ones your company is struggling with right now.
1. Your executives value scaling sales and top-line revenue above everything else
In your first two years of operation, nothing matters more than growth. If you’re well funded, you might be chasing new users as your number one metric. Alternatively, you might be fixated on growing monthly recurring revenue as fast as possible. That level of focus is admirable; it helps you prioritize your work when you feel overwhelmed.
Push this tendency too far and you’ll have growth problems. Systems and processes will break down, and your executives will ignore your findings because those issues are seen as irrelevant to pursuing growth. As a result, your company gradually becomes more brittle as you continue to grow.
Tip: IT managers have a critical role to play in support scaling. IT isn’t expected to produce revenue after all. Instead, IT plays a vital role in making scaling possible and sustainable. So, what exactly can IT leaders do? Find out seven ways IT managers enable scaling growth.
2. You rely on ‘more hours’ as the solution to all problems
Hustle is a fashionable solution to all problems in business, especially if you’re scaling. Just stay an hour or two later in the office and work through the problem. To a degree, improving your work ethic does help. Going from 40 hours of work to 45 or 50 may provide the edge you need to fix problems. However, that pace of work just isn’t sustainable.
CNBC reported that productivity actually declines once you work more than 50 hours per week. If you’re genuinely working that much, you cannot continue scaling. You need different options. Otherwise, you’re going to burn out your employees and create a toxic workplace in the process.
3. You compete with the ‘front stage’ that other high-growth companies project
Think back to the scaling growth news articles you’ve read on TechCrunch. You see smiling executives, headlines with impressive numbers, and an increasing sense of envy. In contrast, you see all the problems in your business along with your wins.
This perception problem quietly leads to discouragement. You know the front stage (i.e., what customers see) and backstage (i.e., what happens during the late nights and stressful times) of your business. Then, you compare that perspective to the front stage glory of another scaling company. Dealing with this problem requires that you be mindful of the big picture when you hear about the successes of other scaling companies.
4. You have no monitoring processes to detect operational problems
Monitoring? Yes, it’s not the most exciting process compared to scaling. Monitoring and management controls tend to be neglected by scaling companies because they can slow down growth. It’s true! If you carve out two hours per week to review reports and key performance indicators, you might diminish growth rates in the short term. Without monitoring to detect problems in the “yellow” zone, you’ll continuously be blindsided by crisis-grade problems.
Here are two areas that scaling companies struggle to monitor effectively:
- Third-party performance: Do you have a monthly scorecard where you rate vendor performance?
- Access management reviews: Do managers have a set schedule to review and remove access? Miss this step and your cybersecurity arrangements will gradually become more vulnerable. You can simplify this process by using an access management software solution.
5. You have a reactive cybersecurity process
When you get in the process for your scaling growth, there are downsides. Your company will soon become a target for attacks. Unfortunately, scaling company executives sometimes forget to build a full cybersecurity program. Instead, you might just have one IT person who does “security on the side” when you run into problems.
If your company fails to learn from these security mistakes, you’re going to have discontented customers. That means less word of mouth referrals and a much slower growth rate. In fact, you might even start to lose customers, especially conservative organizations such as banks that are paranoid about security.
6. Your marketing costs start to skyrocket and you have no idea why
As a young startup, your customer acquisition cost is probably low. You have a few sales staff and maybe a single marketing employee. There’s just not that much to stress the budget. That starts to change when you reach the scaling stage. Your marketing expenses start to go through the roof. Your sales representatives complain that it’s harder to find good leads.
7. Your new hires feel lost and unproductive
Scaling eventually requires hiring more employees; there’s no way to avoid it. The mistake lies in providing no guidance and support to new hires. Sure, driven people will eventually find a way to become productive. However, they’ll be frustrated while they’re grasping for solutions. Avoiding this problem lies on the shoulders of senior management.
The road to safer hyper-growth for your company starts here
The fastest way to enable safe hyper-growth lies in improving your cybersecurity program. Why? In our experience, it’s the number one area that scaling companies neglect. Yet, forgetting this area leads to all kinds of problems. To enable safe and sustainable scaling, you need to implement cybersecurity software solutions.Start by implementing Group Requester. This will give your employees and managers an immediate increase in productivity. Further, you won’t have to rely upon their habits and memory to protect company assets. Each person in a group, such as all customer service staff, will be granted the same set of permissions and access.