Experts have described six specific stages most of the successful companies experienced when aiming for company growth, where each stage is faced by a set of challenges. The firm will need to constantly monitor the changes it is going through as it moves from one stage to another.
Most importantly managerial changes need to be observed in between stage changes. The six stages to be focused on are:
The early stages of the firm’s survival are dependent on the founder’s abilities and commitment, which is of utmost importance. As the company develops and aims to grow further, specialist skills in the managerial sector of the business are necessary are required. It is crucial that management spends adequate hours developing their skills and working as a team.
Many founders tend to ‘let go’ at a very early stage into their business as a result of which their businesses often fail to reach the growth stage. It is important that management not ignore issues which are related to planning, systems and people of the company. Founders must be alert at all times to have these resources available and in position well before the fourth stage of the business to use them intelligently.
It is also of great importance to know that a team grows a business and not an individual. One must create an effective management team from the very beginning, and is vital for all small organizations in order to help in future strategic decisions. Research conducted in the UK has proven, one of the barriers for growth for small businesses was the lack of management systems, organizational structures and skilled managers.
Organizational effectiveness can be determined by the company’s ability to manage strategy, structure, systems, staff, style of management, skills and shared values. This is popularly known as McKinsey’s 7-S framework. It is suggested, in order to have organisational effectiveness a balance needs to be achieved between the 7-S’s. Even though this framework was not specifically built for small businesses, there are many links between this framework and issues and challenges which small businesses face when pursuing business growth.
In order for the business to grow successfully beyond stage three, small businesses will need to put in more time and effort to planning, developing staff, and putting structures and systems into place. Furthermore, in order to achieve the above, the founders of the business need to adopt a delegation role of management and coach their employees where needed.
Essentially, a company must be able to identify at what stage of the growth cycle it is at in order to prepare it for the upcoming challenges. Moreover, managers need to developed and trained such that, not only do the individuals grow, but so does the business.