Verne Harnish (author, consultant and entrepreneur), a specialist of small companies, has a great insight: there are relatively stable plateaus for company size, separated by steep “Valleys of Death”. Here’s what it looks like (numbers based on US statistics):
The explanation goes, each plateau corresponds to a more or less stable organizational form; however to be able to transition from one plateau to the other, a significant transformation needs to happen in the way the company is run. And this transition is tough, because it will shake the organization and established areas of power; while at the same time the company still needs to run its operations and make money.
For example, from the 1-3 employees plateau to the 7-12 employee plateau you need to establish systems and cannot any more rely on people doing everything; then to jump to the 40-70 employees plateau you need to establish a management team and cannot manage everything directly any more, etc.
Your organization might be on such a plateau right now. Be aware of the looming “valley of death” that separates you from your growth target. How experienced are you with the new organizational form you want to reach? How ready are you to get through the tough re-organization it will require?
Many thanks to John Warrillow’s blog (Built to Sell) and his always very inspiring insights for the idea and the picture
