Managing Rapid Growth

1
ManagingRapid Growth

• Venture Planning
• Chapter 17
• Dowling
• Fall 2005

2
Managing Rapid Growth

• Stages of company growth
• RD Stage
• Startup Stage
• Early-growth Stage
• Maturity Stage
• Stability Stage
• Note Few firms experience such smooth, linear
  stages of growth.

3
Managing Rapid Growth

• Core management modes (by company size)
• Doing
• lt3 million, lt30 employees
• Managing
• 3-10 million, 30-75 employees
• Managing managers
• gt10 million, gt75 employees

4
Managing Rapid Growth
5
Managing Rapid Growth
6
Managing Rapid Growth
7
Managing Rapid Growth
8
Managing Rapid Growth
9
Managing Rapid Growth

• The problem in rate of growth

Pressures Demands
Rate of Growth
10
Managing Rapid Growth

• Issues faced in rapid-growth situations
• Opportunity overload
• Abundance of capital
• Misalignment of cash burn collection
• Decision-making
• Surprises

11
Managing Rapid Growth

• Industry turbulence
• Rapidly growing firms wrestle with
• Fast-growing industries
• Many new entrants
• Competing products/services
• Substitutes
• Fluctuating prices
• Rapid shifts in cost and experience curves

12
Managing Rapid Growth

• Culture and organizational climate
• Climate of organization can have significant
  impact on performance
• Climate is created both by the expectations
  people bring to organization and the
  practices/attitudes of key managers
• An entrepreneurs style and priorities
  particularly, how he or she manages tasks and
  people is well known by the people being
  managed and affects performance

13
Managing Rapid Growth

• Approaches to management
• Leadership
• Consensus building
• Communication
• Encouragement
• Trust
• Development

14
Managing Rapid Growth
15
Managing Rapid Growth

• Key points, Chapter 17
• Demands of rapid growth have led to invention of
  new paradigms by entrepreneurs
• The entrepreneurial organization today is
  flatter, faster, more flexible and responsive,
  and copes readily with ambiguity and change
• Entrepreneurs in high-growth firms distinguish
  themselves with leading entrepreneurial practices
  in marketing, finance, management and planning

16
Managing Rapid Growth

• Key points, Chapter 17
• As high-potential firms grow up big, they
  experience stages, each with its own special
  challenges and crises, which are compounded the
  faster the growth.
• Establishing a culture and climate conducive to
  entrepreneurship is a core task for the venture.