The 5 stages of corporate growth

Just running a company is hard enough. But building, expanding and enhancing the company and executing a strategic plan toward achieving set targets is much harder.

Typically, a company experiences 5 stages of growth and development. Depending upon how the people at the helm handle these 5 stages, overcome the challenges and capitalize on opportunities, determines how the successful the company will become.

Sit back for a moment and think, which stage is your company in?

1. A company of individual contributors in their own ways trying to take the company forward. There is no common strategy, plans or tools. Success depends a lot on things falling into place on their own and some good luck.

This approach is fraught with risks as there is no common strategy, no planned approach and no collective efforts toward a common objective.

Creating effective strategy is easier said than done. The original meaning of the word strategy derives from the Geek strategia, which is used in military terms and represents the ability to employ available resources to win a war. Not surprisingly, corporate strategy planning is most often equated with the plans or policies to face opponents or differentiate you from the competition.

In other words, competition takes place at the product or service offering level, which means organizations concentrate their strategic efforts on constantly improving the goods and services they offer. As a result, the entire focus of strategy gets trained on how to succeed against the competition by increasing the value of the offerings. The larger questions of strategy planning for improving structure, mission and objectives, gets obscured.

If your company is in this stage, take a relook at the focus of your strategies and expand their horizon to include a wholesome and comprehensive emphasis toward sustainable growth. Frame strategies not only with the aim of scoring over the competitors but also with an aim of building a solid structure for sustained growth.

2. There is a revenue GOAL, but not a plan. The partners and managerial heads operate in isolation with each one trying out his/her own tools and strategies. A heavy dependence on good luck and helpful supporters moves things forward.

In this stage, the efforts toward meeting the common goal are sporadic and ad hoc. Although every person may be employing his/her best strategies to move closer to the common goal, the lack of concerted planning and systemic approach reduces the power of the approach and thereby shrinks the achievable results. The GOAL, however achievable, may seem impossible because of the absence of synergistic strategies.

If your company is in this stage, bring the managers together to architect a plan that the team can agree on. Get buy in from everyone, and commitment to the action steps necessary to execute on the plan. Working in isolation will only lead to a long chain of wasted efforts and limited results.

3. A company strategy/plan exists. There is some semblance of structure and some strategic programs are in place with at-least some level of success. Execution is still complicated and inconsistent, but there is a visible effort among the managerial heads to work together.

Here, at least the first stage is taken care of and a blueprint of the company strategy or plan exists on paper. Even if the strategies are only limited to offerings, there is still a concerted effort from among the departments to try and work together toward achieving a commo
GOAL. Some successes boost the confidence of working in unison and widen the perspectives.

If your company is in this stage, you need to build up a cohesive union of leadership and realign disparate strategies as a combined common goal. If you are an entrepreneur, you need to involve all managerial leadership in the decision making process. Even if the final veto rests with you, the decision taken and strategies adopted should evolve from collective planning and not something that's just mandated by the CEO.

4. One or more functional units are aligned and are successful. Execution is focused more on ‘results’. Sales and marketing work together with shared goals and metrics.

Building on success is a great way of achieving more success but it has its limitations. Even a continuous repetition of temporary successes doesn’t equate to a sustainable strategy. Sustained success requires a vision that looks beyond temporary goals and successes to focus on larger objectives.

If your company is in this stage, you would need to go beyond the immediate goals to focus on sustainable, long-term success. To do this, the company must understand and relate to its customers. Understanding the customer's needs and conditioning the company's focus to address those needs best should be the primary strategy, based neither on specific competitors nor offerings or short term goals. This primary strategy should be the wellspring of other objectives.

5. The strategies, structure and tools are working in tandem within a systemic approach. Changes denote opportunities and results are predictable.

This is a stable stage from which growth can be sustained and enhanced. If cross organizational alignment exists with proper strategies in place, and the planned structure and tools exist to provide the foundational support for the strategies to work, they collectively strengthen the environment and resources to achieve the goals.

If your company is in this stage, the road from here can be outstanding. As a leader, or the captain of the ship, you would need to keep a strict check on the direction in which the company is moving, and whether its potential and resources are being optimally utilized.

More importantly, you need to make a realistic assessment of the present, identify the areas of strength and weakness, correctly estimate the growth possibilities in the prevailing market scenario and project a realistic outlook for the future. In short, you need to envision the future of the company on the basis of its present and work toward achieving the long-term goals.

Consulting with CEO Coaching experts or participating actively in CEO Conferences is a great way of earning some deep insights on how best you can calculate your company's growth potential and manifest its real possibilities. If you are based in a large city with an active CEO Group culture such as Atlanta, it will be beneficial for you to consider membership with a successful CEO Group so that you can get some experienced insights and no-holds-barred opinions and suggestions from people who have been in similar situations.