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.

  1. There is too much talk about changes and not enough about actions.
  2. Decisions take too long, creating dilutions as the “indecision bubble” expands.
  3. Staff’s expectations are too low, so they don’t support or give a high priority to change.
  4. They don’t have enough champions to promote and focus on new programs.
  5. They lack the superstars needed to grow through to the next plateau.
  6. Employees at all levels are not held sufficiently accountable for their decisions.
  7. The company lacks a sense of urgency, particularly in product development.
  8. The tempo of the company is too slow.
  9. Change is the exception, not the norm, and the rate of change is too slow.
  10. 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.