Managing Rapid Growth

1. ManagingRapid Growth Venture Planning Chapter 17 Dowling Fall 2005

2. Managing Rapid Growth • Stages of company growth • R&D Stage • Startup Stage • Early-growth Stage • Maturity Stage • Stability Stage • Note: Few firms experience such smooth, linear stages of growth.

3. Managing Rapid Growth • Core management modes (by company size) • Doing • <$3 million, <30 employees • Managing • $3-$10 million, 30-75 employees • Managing managers • >$10 million, >75 employees

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9. Managing Rapid Growth • The problem in rate of growth Pressures & Demands Rate of Growth

10. Managing Rapid Growth Issues faced in rapid-growth situations: • Opportunity overload • Abundance of capital • Misalignment of cash burn & collection • Decision-making • Surprises

11. Managing Rapid Growth • Industry turbulence • Rapidly growing firms wrestle with: • Fast-growing industries • Many new entrants • Competing products/services • Substitutes • Fluctuating prices • Rapid shifts in cost and experience curves

12. Managing Rapid Growth • Culture and organizational climate • Climate of organization can have significant impact on performance • Climate is created both by the expectations people bring to organization and the practices/attitudes of key managers • An entrepreneur’s style and priorities – particularly, how he or she manages tasks and people – is well known by the people being managed and affects performance

13. Managing Rapid Growth • Approaches to management • Leadership • Consensus building • Communication • Encouragement • Trust • Development

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15. Managing Rapid Growth • Key points, Chapter 17 • Demands of rapid growth have led to invention of new paradigms by entrepreneurs • The entrepreneurial organization today is flatter, faster, more flexible and responsive, and copes readily with ambiguity and change • Entrepreneurs in high-growth firms distinguish themselves with leading entrepreneurial practices in marketing, finance, management and planning

16. Managing Rapid Growth • Key points, Chapter 17 • As high-potential firms “grow up big,” they experience stages, each with its own special challenges and crises, which are compounded the faster the growth. • Establishing a culture and climate conducive to entrepreneurship is a core task for the venture.