#414  from Innovative Leader Volume 8, Number 7          July 1999

Importance of Balance in a Growing Organization 
by Andy Marken

Mr. Marken is President of Marken Communications, Inc. in Santa Clara, California (phone 408-986-0100; email marken@cerf.net).

Companies are a lot like people, in that they go through a complete life cycle. First, thereís the gestation period when the company is an idea thatís talked about, and the parents-to-be plan big things for the child-to-be. Birth occurs when the founders leave their present company, rent some office/storage space, obtain funding and start nurturing their first product in earnest.  These are the fun years in the life of a company. Energy, togetherness, creativity and dedication are everything.

People work long hours and have fun for little or no pay (especially when compared to their contributions).  People worry less about titles and job descriptions and more about the task at hand. 

Formative Years

During the formative years, the organization begins to take shape and a management structure is developed. Top executives must spend less time on products (they are still permitted this luxury though) and more time developing and managing others.  During this period, the company grows from a core group, and a management style emerges.

Adolescence

As the company continues to grow, it enters adolescence.  Just as parents encounter problems with their children during this phase, the founders of a company also begin to encounter problems.  The management team is stretched thin and sales begin to flatten.  They suddenly have to acquire new skills to help the firm move on to its next growth level.

During the adolescent period, there are rapid growth spurts.  A loose, fun organization must give way to one of greater structure.    

This time in the organization's growth calls for a more professional management approach.  It is here that founding management often stumble, step aside, or are moved aside.  Their managerial, entrepreneurial and/or technical skills may no longer be an asset to their company.

Adulthood

While sales move to substantially higher levels, the employee population has also grown dramatically.  Now thereís a far greater diversity of expertise, capabilities, goals and desires.

To reach this stage of maturity, and to pass safely through it, management must acquire even more skills.  The company is now highly organized and has a very structured environment.  The CEO now needs professional management skills and must surround herself or himself with people who have superior management experience and capabilities.

Masked Problems

In some instances, dramatic product acceptance whisks a young organization through the formative years to maturity without permitting the infrastructure to properly develop.

These blips of meteoric growth often mask many problems.  Since the structure and team are not properly in place, the system breaks down because growth cannot maintain itself. The company needs the support of management and others to carry the firm safely through these phases.

The heads of these organizations have basked in the spotlight of success.  They have become gurus.  Their pronouncements have been held in awe. When the system breaks down, itís often too late to save the company except with the use of extreme measures.  Our heroís words suddenly take on the flavor of the ravings of a madman.

Just as with life, thereís a natural process of development in a company.  Its leadership must experience a similar increase in skills. Those who develop these skills are able to bring the company through the critical periods and get it back on the road to solid success. Those who can't are destined to help bury the company or are "retired" to let others get the growth and profits moving.

Balance

The key to the leader's success is balancing a set of tangible and intangible skills.

Tangible Skills

*  Effective management is fundamental to the success of any organization.  Without a good foundation, activities are fraught with frustrations.  Planning, organizing and controlling are essential activities.

*  Technology plays a less important role for top managers as the organization evolves and grows.  A specialist often finds it difficult to give up his first love, but it must be done if he is to become an effective manager of a growing organization.  However, he can't totally abandon his expertise, because many critical decisions require solid expertise, as well as an awareness of industry trends in that specific area.

*  Marketing soon becomes the heartbeat of any organization, and leaders must develop strong product-marketing skills--especially in the areas of positioning, strategic marketing, and sales/revenue forecasting.  This means positioning the company in its target market and developing the kind of thinking that can help the company make its way through the marketing maze.

It is essential that managers understand who is buying the product, what they are buying and why they are buying it. This area is so important that many industry leaders feel that the heads of companies should spend at least 40 to 50 percent of their time with customers. They also learn a lot about the customer's wants and needs ... now and in the future, and they also learn about current and potential competition.

*  From the very start, top managers have to gain a whole new perspective of finance in order to control budgets.  Then, as things become more complex, they must gain skills in general accounting, cost accounting, cash flow, asset management and so forth.

*  Operations becomes important as management has to be concerned with the dispersal and use of its assets. 

Intangible Skills

Itís important to balance the tangible or measurable skills with a philosophy of thinking that provides consistency in management style.  These intangible skills can sometimes carry, pull or push an organization through the rough times.

*  Determination, combined with dedication and desire, is difficult to beat during the early phases of an organization's growth.  That almost-blind determination to do whatever it takes, and the willingness to go the extra mile, will motivate others.

*  Leadership takes many forms and has many facets that help motivate others to achieve even beyond their own expectations.  This demands that top management: 1) is trusted, 2) demonstrates good judgment, 3) shows initiative, 4) is sensitive to people and events, and 5) is optimistic about the companyís future.

*  Build a team of the best people available.  Employee selection is one of the most difficult things that leaders have to do.  They can never be 100 percent certain that they are making the right decision until months or years later.

*  Communication in an organization of any size is vital to its success.  During the early stages, itís easy.  As the firm grows, it becomes more difficult.  To improve communication, leaders should be open, honest, unselfish and willing to listen attentively.

*  Human relations are important throughout the organization.  Call it a corporate culture; itís an interrelationship with others in the organization that keeps people motivated and working toward a common goal: corporate success.

Through all the growing pains of an organization, thereís no substitute for desire, dedication and determination.  These traits, along with good ideas and good teams, can assist leaders in turning ideas into realities ... and successes.

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