Is your Expansion Stage Company Missing its Reproductive Organs?
June 23, 2011
Though expansion stage companies need reproductive organs to execute their business growth strategies and to successfully scale during the expansion stage, I find that many companies are missing them or are experiencing a level of dysfunction.
At the early stages of your company, you found your product market fit and hopefully developed a product and go-to-market vision for the expansion stage. As you get to the expansion stage, you need to work on getting your basic units set up (see my post on the power of 3). As you go through the expansion stage, one of the key success factors is building your reproductive organs. These are the key capabilities and resources that allow you to reproduce your best people and methodologies in each of your key functions! They are some of the core company development strategies at the expansion stage of a company’s development.
3 Key Capabilities
Your reproductive organs consist of three capabilities:
1. Scalable Methodologies that allow new people to go up the productivity ramp as quickly as possible. These mostly include the departments that generally need to scale up the quickest, including sales, marketing, customer service, product development, and professional services (if it is part of your business model). Methodologies are more scalable if they are simpler to understand and it is easier to find and train people who can execute them. You can rely on ad-hoc approaches to getting things done at the early stages of a company, but you need clear and shared methodologies if you are going to scale up your company.
2. People Factory that finds, recruits, trains, motivates and retains the best people to execute your core methodologies. You can rely on your network, outside recruiters, and your VC in the early stages of your expansion, but at some point you are going to need to build your internal people factory to truly scale your company with exceptional people.
3. Management Systems that help keep your staff aligned toward your long and short-term goals. You can rely on ad-hoc meetings and the daily fray when you are a small, single office, but you need to adjust your management systems as your company adjusts in size and sophistication. Think in terms of getting your people focused on your long-term aspirations (corporate, target customer segment, brand, product, and people aspirations), and getting everyone aligned and in a rhythm against shorter-term goals (annual, quarterly, and weekly goals) that drive toward those aspirations.
Your Organs Change As You Develop
As you develop your reproductive organs, you need to adjust your reproductive organs as your company develops and grows. Generally, your approaches need to be sophisticated enough to allow them to function but simple enough that they don’t waste time with needless work.
The way I describe it: if you don’t have enough sophistication then it leads to chaos; if you have too much sophistication then it leads to bureaucracy.
Generally, as the expansion stage company gets larger, you need more sophisticated reproductive organs. The best companies have their reproductive organs mostly in place and they have an easier time scaling up the company. Think about it. You have your product market fit and a solid economic model. You are going to grow by doing more. Good reproductive organs will help you reproduce and do more faster!
Are you missing your reproductive organs?