Every few years a piece of research comes out examining barriers to growth. Not only is it a catchy title but it is something that we do need to understand if we intend to grow our businesses (big or small).
Chris Zook has written The Founder’s Mentality: How to Overcome the Predictable Crises of Growth and he examines barriers to growth.
With growth comes bureaucracy. 85% of execs say that the greatest barriers to achieving their growth objectives lie inside their own four walls (Bain & Co). And in the largest of companies this percentage rises to 94%. Execs believe that the greatest challenges are internal not external. (We had evidence to support saying exactly that when I was running consulting programmes at Warwick Business School in the last century!!)
With scale comes complexity and bureaucracy. And next comes a loss of speed, self-awareness, sense of urgency. This is the Growth Paradox.
Growth creates complexity and yet complexity is the number one killer of profitable growth. It sows the seeds of its own destruction!
So what?
If we understand how bureaucracy distorts behaviour then maybe you can attack this cancer of the growing businesses.
Zook cites five distortions that need to be attacked to get the business back on line. When I think of the larger business’ I have worked with then I see this being rolled out in front of me. By varying degrees.
- Distortion of speed
- Distortion of motive
- Distortion of time
- Distortion of decisions
- Distortion of information
Every time we see growth we almost inevitably see these distortions kick in. The bureaucracy invests in maintaining the status quo. It becomes disconnected from the business’s purpose. The drive, energy and enthusiasm of the earlier days gets diluted and often gets defeated by the system.
Well that’s true if you’ve created the wrong system with the wrong people and the wrong culture. Or maybe there is a different way to approach the problem?