Hypergrowth of a company can turn into a very unpleasant experience if challenges associated with it are not addressed and handled in time. Everyone wants to see their company grow faster and bring payback as soon as possible, but when this process of growth turns into constant stress, frustration and burnout, it only slows things down. Although hypergrowth in itself can be very helpful and crucial for the future of the company, it’s important to know about the challenges of hypergrowth and how leaders should address those challenges.
First of all, what is considered to be hypergrowth? This term was first introduced in 2008 in the Harvard business review article. This phenomenon was described as a phase of the rapid growth of the company, and the stage that separates the winners from the losers. Now, this term is used to mean a phase of rapid expansion for the company. To be considered in a stage of hypergrowth, the annual growth compound rate per annum has to be 40% or more.
Most companies that go through such rapid growth fail because quite often the leaders of those companies are not prepared for such change. The problem of hyper-growth companies that is being discussed the most is the scalability of the company. The true issue is actually a compound of scalability, culture, and the processes in the company.
One of the big problems that pops up in the context of challenges associated with hypergrowth is connected to the talent. When a company grows quickly, it needs a lot of talented people; every company tries to get the best people and quickly, immediately put them into action, expecting them to perform from day 1, and this becomes a problem. One needs to prepare himself and the organization to get into that luxury state of retaining the talent on board and keeping them performing at high levels in a sustainable way. This becomes even more challenging under the stressful circumstances of hypergrowth.
Another difficulty that companies often need to overcome is the lack of technical solutions. Having things automated is crucial in the stage of hypergrowth because the brains and skills are needed in the areas of expansion, not in the areas of routine tasks. Not being up to date in terms of technology can truly influence the processes of acquiring customers, but also retaining them and keeping them satisfied. Simultaneously, it’s also not good to invest too much too early into technology, and then never use it. Finding the balance between the two extremes is incredibly challenging and an art in itself.
The culture and the processes might get quite toxic during this period of time, and that is where the true leaders can step up and change to the flow of things. Hypergrowth demands discipline, yet it swallows everyone who forgets about social and private lives and only tries to catch up with all of the tasks and work that needs to be done. A leader must show to his employees that it’s okay not to have everything completed right away, otherwise work and stress are going to suck out all of the positive energy and strength to push through. As a leader, one needs to show the work ethics that need to be followed, and the messages that need to be communicated. A leader needs to lead by his example.
The key is to remember that you get to choose: for up to three years, in this stage, you can be a fast and nimble company that actually manages to (re)design your processes and build a healthy, sustainable culture, to make your work more efficient, or you can be in a panic mode putting out fires and by the end, most likely not survive – as an individual or a company as a whole.
This is why I hope that the conversations in the nearest few weeks will help you do your genius, get on the side of the calmness, dedication, and thriving to push through the challenging times of hypergrowth and be the best for your customers, team, and yourself.
If you want to find out more about who will be our guests sharing on the topic of hypergrowth and what we will talk about, you can listen to the latest episode of the Genius Leadership podcast here.
Stay tuned and be genius!