Four Challenges of Hypergrowth

This is the unedited version of my December 5, 2012 Blog Post which was published in the Washington Business Journal.

I’m really thrilled to start writing a weekly Blog post for the Washington Business Journal as of today.  Thank you Roger Hughlett and Alex Orfinger, Publisher, for the opportunity to express my opinions and thoughts about a wide range of business ideas and topics.

As a novice and inconsistent blogger, I now have a “boss” and weekly deadline, so there are no more excuses NOT to post consistently.  And to have the WBJ platform distribute my content?! What more could I ask for?

I’ll be blogging on leadership, entrepreneurship, technology (all kinds), strategy, private equity, venture capital, international business (particularly in China and Brazil), and probably a bunch of other random stuff.

Last week I had the pleasure, along with Devin Schain of CampusEd and Mark Richardson of CASE Building and Design, of speaking to Professor Andrew J. Sherman, Esq.’s University of Maryland class on Entrepreneurship.  The topic: Challenges to Growing Your Business.

I co-founded and ran CyberRep, Inc., a call center/customer relationship management business which, over a 12 year period,  grew from 0 – 2200 employees and $0 – $80 million in revenues.  So I broke down the types of challenges we faced into 4 categories:  1. Keeping Clients Happy, 2. Keeping the Culture Pure, 3. People Issues, and 4. Personal Growth Challenges.  These 4 types of challenges are all integrated and interdependent with each other.

Keeping Clients Happy – When you are small, it’s relatively easy to focus on thrilling your clients.  As you hypergrow, you start working on lots of other very important things in addition to client matters.  Things like capital raising, shareholder matters, hiring and staffing, technology issues, etc. start to command your attention.  It’s natural.  As a hypergrowth company, we had our share of growing pains and glitches especially with people, processes, and even technology.  What was key for us was that “Client goals are our goals” was our #2 corporate core value and “Client satisfaction” was one of our “4 Pillars of Success” so we were able to ingrain this client-first thinking into our culture.  When hypergrowing, it’s critical to never forget who signs your paycheck – your clients!

Keeping the Culture Pure – As CEO, my job was to establish, evangelize, and enforce the Company culture.  As we  grew, and acquired 3 companies, and hired people from competitors and companies which didn’t have our company’s value set, we risked diluting our culture.  When a company loses its culture, it will eventually die.  We kept the culture pure by repeatedly dispatching our senior leadership team into all of our offices (we had 10 in 6 states) to evangelize like crazy.  We lived by our “Top 10” core values and developed our own lingo and reward systems to train all associates on what was important to the Company.  Very tedious, grinding work – very challenging, but it did pay off.  Our leadership team studied Jack Welch and the GE way, and what GE was doing at Crotonville, and we were inspired by their commitment to nonstop repetition in inculcating culture into the organization.

People – Dealing with people issues is one of the toughest parts of running a business.  As you grow, your people necessarily must grow…or they will be left behind or worse.  I would say that less than 1/3 of our first tier of management were able to “keep up” with company growth and client demands as we grew from $5 million – $20 million in revenue.  We saw the Peter Principle at work for dozens of our managers.  It pained me to have to let some of them go, especially the ones who had been with us from early on.  Others just stayed in their jobs or grew a little more slowly than the Company.  The bottom line here was not sacrificing quality or settling for less than excellent performance.  So that meant lots of training, reorganizing the org chart appropriately and often, and being able to recruit new talent for the right positions.  The main challenge was maintaining focus on what was best for the Company, and putting those needs first and ahead of any one team member.

Personal Growth Challenges – This set of challenges may have been the most trying of all for me.  At each stage of our growth, our executive team and I were all in uncharted territory.  We’d never grown a company this fast or this way.  As startups hypergrow, the Alpha Male or Female startup entrepreneur has to develop into a professional executive.  I have seen many fail at this.  So, I had to make the transition from manager to leader, and I had to develop soft skills and become more diplomatic.  The realization that my decisions could affect 2200 families was another eye opener, and I was forced to deal with the psychology around that fact.  Also, as our company progressed, we had to all become more thoughtful, analytical, and process-oriented.  Company and CEO must both face this reality of “growing up.”  The challenges are too many to enumerate here but these were just some highlights.

So that ends my inaugural WBJ blog post.  Please comment or email me your thoughts and experience.  I’d love to hear of your personal experiences and challenges in hypergrowing your company.  Thanks for reading!

Tien Wong is a serial entrepreneur and private investor.  He is CEO of Lore Systems, Inc. an enterprise network engineering firm specializing in cloud computing and network infrastructure for commercial, nonprofit, and government clients.  He also heads Opus8, an investment and strategic advisory firm.  His Twitter handle is @tienwong and the web address for his blog “Winning Ideas – On Leadership and Hypergrowth in the Entrepreneurial Economy” is tienwong.wordpress.com.