Is Your Company Growing Too Fast?

By their very nature, growing companies tend to change direction frequently. This is especially true of information-publishing companies whose success depends on quickly developing new ideas.

When your business is growing fast, it is easy to ignore the inevitable chaos that ensues, thinking that cash flow will take care of everything down the line. There is a lot of truth to that. But if you let the chaos go on too long, you will end up with a business that has high revenues but fast-decreasing profits. And things will be so complicated by then that it will be hard to tell exactly what is wrong.

The solution is to get rid of the mediocre people, products, and procedures as you add new ones. I have one client whose company has gone from zero to 10 million in four years. The guy who runs it is a master at this winnowing process. Every time he launches a successful new product, he puts one of his poorer products on the back burner. He does the same thing with employees. Each time a superstar emerges, the weakest member of the team is let go.

If you are in that situation now, I recommend you read Ready, Fire, Aim immediately. Pay special attention to the chapters devoted to Stage Two businesses.