Top business and career coaches from Forbes Coaches Council offer firsthand insights on leadership development & careers.
When your company is in growth mode, you might feel empowered by the exciting changes you’re bringing to your organization. You’re hiring new people, launching new campaigns and building new partnerships — you’re on top of the world, and you feel like nothing can slow you down.
While it’s good to be motivated when you’re scaling up, there is such a thing as growing too quickly. When the adrenaline wears off, you might realize that you’ve hired or spent prematurely, leaving your business in a very difficult position.
To prevent your startup from suffering the ill effects of too much growth, Forbes Coaches Council members caution leaders to watch out for the following warning signs.
1. Growth Is Breaking The Foundation Of Your Business
Growth is a good thing, but not at the expense of your foundation breaking down. Can capital keep up with the growth? Are your people leading the change? Is the culture being sacrificed or transforming with the growth? Are your “base business” customers still happy? All of these questions are critical and serve as stop gates for your organization when scaling. – Rubi Ho, The Rubi Ho Group
2. You Don’t Have The Right New Hire To New Business Ratio
If companies get funding, the first thing they do is to hire people to innovate. Investors care about you maintaining a responsible business no matter what size you are or what size you scale to. If you’re hiring ahead of the work and the work doesn’t come through, that’s a problem. Your eye on operations and its relationship to new business is absolutely key to growing in a smart way. – Joanne Markow, GreenMason
3. You’re Getting A Lot Of Complaints
A huge giveaway that you are scaling too fast is complaints from those you serve. Ensure you make it very easy for a customer to complain. If you are never made aware of mounting complaints, you may see the results reflected in diminishing revenues. So, listen to complaints from customers. They will guide you where you need to put your focus and where you need to fix underlying problems. – Tyron Giuliani, Selling Made Social
4. You’re Dropping the Ball Where You Used to Perform Well
It isn’t unusual for leadership teams to stumble in areas they had previously “mastered.” Maintaining products, clients and services that served as the foundation for growth are often sacrificed to make space for future focus. A mindful organization will avoid this misstep by establishing strong operational rhythms and scorecards that they keep in front of employees at all levels of the company. – Tegan Trovato, Bright Arrow Coaching
5. You’re Noticing Big Cash Flow Gaps
Having significant demand can also mean an increase in costs to meet that demand. If you can’t fund the demand until invoices are paid, a cash gap will quickly emerge. This puts pressure on covering your own businesses expenses and can create reputational risk in the market. Fiercely manage your cash flow. If you can’t fund it, don’t do it until you have identified the solutions to fill the gaps. – India Martin, Leadership For Life