Blog: Stagnation—The Wrong Path to Growth
Very few entrepreneurs have the wherewithal to take a company from startup to tens of millions of dollars in revenue. To be successful, an entrepreneur has to have a certain level of risk in their character.
During the initial phases of meetings with the entrepreneur, the investors are evaluating, is this entrepreneur coachable of risk-taking, being a part of the positive evaluation.
But, if the company is struggling to grow, there’s a possibility the risk factor that is still needed starts to suffer. I have found it to be true, if the entrepreneur, family and friends have put significant cash into the company, the entrepreneur is hesitant to make any risk.
This is a big problem for the investors and they must decide if it’s time to replace the entrepreneur as CEO.
There are many signs that indicate robust growth is not in a company’s future. Companies reach plateaus in their growth, and then are often held back because they don’t recognize the importance of culture. Below are ten signs, common in stagnant companies, that a company is more inclined to be stagnant rather than growing.
- There is too much talk about changes and not enough about actions.
- Decisions take too long, creating dilutions as the “indecision bubble” expands.
- Staff’s expectations are too low, so they don’t support or give a high priority to change.
- They don’t have enough champions to promote and focus on new programs.
- They lack the superstars needed to grow through to the next plateau.
- Employees at all levels are not held sufficiently accountable for their decisions.
- The company lacks a sense of urgency, particularly in product development.
- The tempo of the company is too slow.
- Change is the exception, not the norm, and the rate of change is too slow.
- The president doesn’t have the hands-on style and cheerleading ability to produce a high growth rate.
Most companies with which I worked in my career had in their minds that growth is the major indicator of a good manager. In some situations, I had to convince the manager, to be replaced, that they did not have the stomach for robust growth. Actually it helped them to sleep better, not worrying about being a failure as a manager.