Each January for the past 5 years, I have had the privilege of presenting on “Scaling a Fast Growth Enterprise” to a group of MBA students who attend a 3-day “Start Up Bootcamp” run by John May of New Vantage Group and Tim Meyers of Capital Trust Ventures. Students come from all over the country including UVA Darden, UMD Smith, U Michigan, Duke Fuqua, and others.
This Post is the first of a series of posts on the topic of scaling a hypergrowth company. At CyberRep, we were able to grow our top line revenue from $550,000 to $22.5 million in 5 years. We then grew from $22.5 million to over $80 million in the subsequent 4 years. In retrospect, there were FIVE KEY ELEMENTS that contributed to our ability to grow so rapidly while maintaining high degrees of both client satisfaction and retention, as well as employee morale and retention.
These 5 elements are: People, Culture, Scalable Customers, Process, and Capital. In these next few posts, I will explain in more detail my thoughts on each of these key elements to scaling a hypergrowth enterprise.
Everything starts with people, no matter what kind of business you are in. Success begins and ends with getting the right people on Jim Collins’ proverbial bus.
Hiring – We look for 4 key characteristics in our people: Integrity, Passion, Energy, and Execution capability. In short, we want players who have high integrity, love their work (because passion is authentic and infectious), have huge reserves of energy (because all hypergrowth organizations require personal and group energy), and folks who can get the job done (critical for thrilling clients).
2 more important traits – flexibilty and resourcefulness. We need staff who are flexible because plans change in a highly dynamic environment. Further, since capital and human resources tend to be scarce in organizations which are stretched thin to support rapid growth, we need people who are resourceful and can do more with less.
Staff for the present but keep the future in mind – Every small and growing organization wants to hire the big guns, the heavy hitters whom you may not need right now, but whom you will surely need down the road. However, you need to focus on the present tasks at hand, so it’s more important to get the best people for the job NOW, than it is to hire for that “future” position prematurely. Predicting growth is very difficult, so staffing plans are seldom at an “optimal” level. You will always be overstaffed or understaffed, depending on where your company is in its growth curve. The key is to make sure you take care of today’s business while keeping in mind the future potential for personal growth of your new hires. Not everyone will keep growing as the company grows, but that does not mean these folks can’t make important contributions.
Can your people adapt as the company grows? Every team consists of diverse groups of generalists as well as specialists. In early stage companies, there is a greater need for utility players, a.k.a. Generalists. As companies grow, they start to need Specialists to fill specific roles. The faster they grow, the greater the need for specialty positions. Can your generalists make the transition? Do they have the personality, ego sublimation, people skills, and technical expertise to transition, if necessary? These are key questions which leaders face when hiring and developing their talent in hypergrowth companies. In my experience, most generalists can’t make this difficult transition and are often left behind as a company grows. I think it’s important for top leaders of hypergrowth companies to be cognizant of this transition risk and try to mitigate it by providing training and development opportunities to their A Players.
In the coming days, I will talk about the other 4 elements in scaling a hypergrowth enterprise: Culture, Scalable Customers, Process and Capital.