Growth in your business is always good, right? Here are five signs that your team is not handling the growth well and it is leading to declining performance in your business.  The signs are from multiple surveys of 240 companies ranging in size from 30 to 1500 employees in multiple industries. These five signs are:

  1. You’re having increasing difficulty closing your books.
  2. Real-time information on your operations does not exist.
  3. You can’t easily analyze your current business.
  4. Your income statement is deteriorating.
  5. Your industry is going global.

Signs #1 and #2 indicate that your work volume exceeds your system’s ability to handle the information. In a sense, you are starving for information to run your business and you are “flying by the seat of your pants.” In most cases the underlying cause is that people and process can’t keep up with the workload. Hiring more people may not solve the problem and it is likely that you will need to invest in some software, computers or automation equipment. Possibly all of that if you are in double digit growth.

The impact of signs 1 and 2 is found in sign number 3. You can’t analyze your business the same way you used to. You may not be sure where you are profitable or even if you are profitable. Your processes may be temporarily corrupted as staff take short cuts to keep up. Product and service quality may be declining but you can’t tell. You may need to invest in new systems for client relationship management (CRM), human capital management (HCM), business intelligence (BI), and professional services automation (PSA). Your goal is to get back to a point where you know that you are making a profit and know:  1) who your best clients are, 2) who your most productive employees are, and 3) what your best practices are.

The first indication of sign #4 is deteriorating cash flow and you need to know it before your banker does. This occurs because of signs 1-3 and your growing certainty that the metrics of your business are no longer accurate. As you look outward toward your customers and suppliers you also see suppliers are more offshore and your competition may be coming from there too. This means your business is facing increasing competition and you will need to retool your supply chain. Now, cost control is a more complex process and increasing priority.

So, what to do? Slow down your growth temporarily and focus on regaining control. If necessary, bring in temporary help to assist your staff with digging into data and finding out what is really going on. Get data in hand that you trust and examine the performance metrics of your company. From there you will need to examine where to increase capabilities in people and processes, including likely capital investment. If you do not have the financial capacity for investment, then your choice is to determine which business you want to continue and which you should discontinue to regain control and profitability.

Don’t let growth kill your business; death is not a career objective! Lets talk if growth is killing your business.

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