Without even defining corporate adolescence, you can figure out what it means.
Corporate adolescence is a term I like to use to describe that awkward stage in a company’s life when they are no longer small—but not yet large. You have some of the characteristics of each but are not quite one or the other. And it’s downright uncomfortable.
Almost everyone survives human adolescence (somehow). Unfortunately, the mortality rate for companies is somewhat higher: some don’t. But the odds of corporate survival go up dramatically if you recognize its characteristics, acknowledge that you are in it, and learn to cope with it. One thing is certain: you won’t put it behind you by just waiting for it to pass.
Corporate adolescence can occur within a wide range of descriptions. It has little to do with how long you’ve been in business. Some companies enter it in a couple years. Others take ten or more. The important things to remember are to recognize it when it is upon you and be pro-active about working your way through it. Here are some thoughts that may help.
You are probably a corporate adolescent if:
1. Your sales are in the range of $4-6 million and you have 20 to 30 employees
You seem to be stuck there. Officially, you are still a “small business”, but you are doing more “large” jobs (think $250K plus) and your average order is getting larger. These are challenging and encouraging but you really don’t know if you are making money. Recent growth—if any—is incremental and driven by the market more than anything being done differently internally. Some employees seem a little restless and frustrated.
2. You can’t run the business alone
“Three guys and a van” no longer cut it. You need intermediate management: someone to focus on Sales and Marketing, someone on Operations, and someone on Finance and Administration. Trouble is, you don’t know who, where to get them, how to pay them, what they should do, or how to lead and direct them—because you’ve never managed other If you are fortunate enough to have them you aren’t sure how much authority they should have.
3. Your financing needs are changing
You need more working capital but your bank is balking at a larger credit line because they don’t think you are profitable enough and they don’t believe your forecasts. They want (gasp) an actual business plan and you’ve never had one. You’ve maxxed your credit line and have been on credit hold with one or more of your suppliers. Your accountant isn’t as helpful as he or she used to be and you sometimes think he/she “doesn’t get it.” You’ve probably outgrown him/her, but there’s no one on the inside to step up and fill the void.
4. You are being “forced” into different kinds of work
Your clients (you have some good ones) are asking for new services, new technologies, new solutions—and you don’t know which ones to pursue. Jobs are getting bigger, more complex, and outside your comfort zone. Sales wants to do it all—engineering not so sure.
5. Your systems and processes aren’t getting it done anymore
You’re inefficient, don’t have the reports and information you need (maybe aren’t sure what you should have), and you are both mystified and terrified about the prospect of more robust software. Your people don’t follow the processes you thought you had in place. Maybe because they exist mostly in your head or are simply part of your “tribal knowledge”. Or maybe they have morphed and not been updated. Either way, you’re seeing a lot of slip-ups.
Sound familiar? Step back, breathe deeply. You can survive corporate adolescence.
The most common denominator we see in immature companies is lack of well documented processes.
If in doubt, start here: begin writing things down. Your business is changing, usually gradually enough that you don’t notice it much. (The frog tossed into boiling water knows what’s going on instantly. The one in cool water heated slowly doesn’t get it until it’s too late.)
Here are some things you need to document:
- Your major markets. Where is business coming from today—by geography, by type of client (vertical), by products or services sold, by size of project? How do you see it changing and why?
- What your ideal client looks like. For whom do you do your very best work? How can you find more like them? How well is your sales team aligned with markets and preferred clients? Do your sales people both “hunt” and “farm”? Are you ready for a more institutionalized marketing and business development function?
- Your actual processes. There should be established and written ways to do what you do, from front to back. Just to name a few (out of several dozen):
- Use of site surveys
- Clear scopes of work
- Estimating and proposals
- Forecasts of revenue and needed resources
- Order entry/job setup
- Project kickoffs
- Change orders
- Time tracking/job costing
- Substantial completion/project closeout/final billing
- Commissioning to service
- Reporting/monitoring metrics
- A list of “must keep” employees. Who can you not function without, and why. Who on your staff is ready for more? Who is OK where they are but not much more. Who is struggling—in danger of losing their seat on the new bus.
- A priority list of next hires. Who (or what skills) do you need next, when, and why.
- Job descriptions—for everyone, but especially for new positions.Evaluation of your professional service providers. Many who helped you get started aren’t suited to where you are and where you’re going. Think accountants, attorneys, banks, outside advisors, IT suppliers, sub-contractors, and others.
- A business plan. Simple at first, maybe only for next year. There are dozens of templates and outlines available for this.
- A list of the information you’d like to have available in reports, but don’t.
It follows that once you start this process you will see much of what it will take to “mature” your company, because most of these things are things the larger company has that the smaller one doesn’t. The process will reveal what you have and much of what you need. That can lead to a list of initiatives to be worked on within your business plan. And talk to others in the business or ones like it, those who have been there, done that.
Someone once asked Wayne Gretzky what made him such a great hockey player. His answer was “I always try to skate to where the puck is going to be.” Point taken, Wayne.