Dear CEO of a formerly high growth, mid-size firm,
You are not alone. Every single company that goes from small to big must face the hard times of navigating adolescence. The good news is that there is a way to get out of the land of the lost. You must first decide whether you want your company to stay small and be great. If you do, Bo Burlingham writes a greatbook just for you entitled, Small Giants.
For those of you wanting to get big, this bark is for you. During the past few years of working as an outsourced CMO for mid-sized companies, Chief Outsiders noticed a pattern. All of these companies struggled with the exact same issues. There is a well-documented phenomenon that every company faces when it gets too big to be small and too small to be big.
WHO ARE YOU
I can give you a list of common indicators to tell you that you are in the Land of the Lost. If you want more specifics, you can read Doug Tatum's Book entitled No Man's Land or you can wait. We will be posting an online assessment that will take you through this. The bottom line is that your GROWTH is slowing down, your Customers are complaining, your margins are decreasing, your cash is limited, and you are confused where to go.
THE PROBLEM
There are four primary problems that growth and mid-size companies face when they hit the Land of the Lost:
- Market: Your competition has caught up to you, your relationship with your customers has changed and there is a misalignment between sales and operations.
- Management: You have a team of executives that need to grow as leaders and be able to delegate and predict future cashflows.
- Model: As your company grows, the need for systems and structures to handle the complexity of your success is putting pressures on your margins and cash flow.
- Money: Most companies enter the Land of the Lost without enough capital to leave it. If you can master the Market, Management and Model challenges you are well on your way.
THE MARKET
If you are the founder or CEO, you are the visionary and should remain the #1 marketing executive whose job is to look around the next corner. Unfortunately, with your success come the complications of having more people and more complexity. Many companies struggle with passing the value proposition from the CEO to the rest of the company. This is where you find a disconnect between the sales team and the operations team. You were great at understanding the customer’s needs in the beginning but now find yourself without the time to meet with customers to understand first hand the issues they are facing. You begin to lose customers because your team is now making promises about your product and service that differ from YOUR original promises. At Chief Outsiders, we believe the CEO is the #1 marketing executive. You need a #2 marketer that can translate the vision and value proposition into an insightful, actionable and measurable marketing plan who is paid on delivering results.
MANAGEMENT
Most entrepreneurs do not like working with anyone, including their own employees. This is why most firms have fewer than 10 employees. To grow, the owners must be able to delegate to trusted executives. For many of us, we have the people who started out with us from the beginning and whom we promoted. We gave them titles because we could not afford to pay them. “One of the first real management concepts that stuck in my head was thatif you cannot afford the people to run the business for you, then all you have is a job, not a business.” Doug Harrison, CEO of the Scooter Store. Are you bringing in the experts that can take your business to the next level?
THE MODEL
As your firm has grown above 20 employees, the need for better systems and structures are imminent. You need a robust accounting system. Your IT infrastructure must scale. You must bring in “A” players to compete against the dynamic market leaders. "A" players demand a premium in the market place on compensation. Show me a company that has "A" players willing for work for less? "A" players will not work for a company that wants to keep all of the value without sharing with the team. All of these needs put pressure on your margins. Your revenue model and business plan must be analyzed to determine if you can grow and scale your business beyond the human scale. Who is best equipped inside of your company to run this analysis and understand how to build a scalable business that can compete in today’s environment? If your CMO (VP Marketing) has not done this work and/or cannot do this work. You need to strongly consider an upgrade.
MONEY
Do you have a strong business plan and strategy to be able to convince potential lenders and investors that you have what it takes to make it through this scary place? Have you been able to lower your risk, by being able to provide a plan and results surrounding your Market, Management and Model?
THE PROMISE LAND
My next barks will discuss how to fix these issues to navigate out of the Land of the Lost into the Land of the Living. Chief Outsiders has been helping companies do exactly that. We also are willing to take risk ourselves to align our interests with yours to help you navigate to the next level and put yourself back on the track to win your first or another Inc 500 fastest growing companies!