Early Warning System for Business Challenges

If you are a CEO, then you face daily challenges. The biggest one is determining what your real challenges are which often lie beneath the surface from the apparent ones. What if there were a tool to help you identify these often hidden challenges and ‘see around the corner’ to what’s next?

The 7 Stages of Growth is like an Early Warning System. It can do the following:

1. Identify your Top 5 Challenges relative to your firm’s                                                                              Stage of Growth

2. Determine if you are being either too Cautious (slowing down the decision making process and missing opportunities) or Confident (thinking things will stay the same and not thinking of the consequences if they don’t)

3. Dig deeper into the ‘root cause’ of an apparent challenge and uncover the real challenge.

 

Early Warning System Explained

1. Identify your Top 5 Challenges relative to your firm’s Stage of Growth
The Growth Curve program is based upon research by James Fischer in his interviews with over 650 CEOs of successful small business (500 or few employees). One of the key findings is that businesses pass through 7 distinct stages of growth. Each stage has different needs and challenges. He also found that businesses face 27 challenges. These challenges are different at each stage of growth.

Stage 1 Start-Up (1 – 10 employees)
For this stage of growth, the Top 5 Challenges in order are 1. Cash Flow, 2. Destabilized by Chaos, 3. Slow Product Development and Getting to Market, 4. Limited Capital to Grow, and 5. Need to Improved Sales.
Stage 2 Ramp-Up (11 – 19 employees)
For this stage of growth, the Top 5 Challenges in order are 1.  Hiring Quality People, 2. Need to Improve Sales 3. Cash Flow, 4. Leadership/Staff Gap, and 5. Limited Capital to Grow.
At this stage you see that some challenges have moved up (Need to Improve Sales), some have moved down (Cash Flow), new ones have been added (Hiring Quality People), and some have been eliminated (Destabilized by Chaos).
Stage 3 Delegation (20 – 34 employees)
For this stage of growth, the Top 5 Challenges in order are 1. Staff Buy-In, 2. Leadership/Staff Gap, 3. Weak Profit Design, 4. Core Values Unclear, and 5. Culture Resistance to Change.
Basically, Stage 3 presents a whole new set of challenges not previously encountered by the business.

2. Determine if you are being either too Cautious (slowing down the decision making process and missing opportunities) or Confident (thinking things will stay the same and not thinking of the consequences if they don’t)

Another finding of the research was the Confident–Cautious ratio. At Stage 1 the ratio is 4 to 1. Lacking confidence and being too cautious will act as a break on growth. It most likely will keep a company from ever reaching Stage 2. At Stage 2 the ratio becomes a little more cautious at 3:1.

Again at Stage 3, there is a significant change as the ratio is 1:1. Too much confidence by the CEO at this stage is expressed as trying to control an enterprise that has outgrown the individual’s capacity. Too much caution can cause managers to feel powerless at a time when they need to take charge. The outcome is low employee morale, low productivity, high turnover, loss of momentum, and a loss of confidence in leadership. At this stage, the CEO needs to provide strong directions, set expectations and manage those expectations. The goal is to guide, manage, direct, coach, encourage, and correct. The CEO must balance confidence and caution.

3. Dig deeper into the ‘root cause’ of an apparent challenge and uncover the real challenge.

Ask most businesses what their primary challenge is and they will say, employees. Questioned more specifically and they will say Millennials. Their comment is along the line of Millennials not have a commitment to the company and thus leaving after a short time. Digging deeper and asking about their HR program, e.g. recruitment, interview process, orientation to the company, training, evaluations, etc. and one finds the surface problem, Millennials, is actually an HR problem.

If you would like to learn more about the 7 Stages of Growth and how it can serve as an Early Warning System for you, contact me today. Call 763-691-8585 or email me at trwconsulting86@gmail.com