Resolving this situation requires the business founder to make the transition from entrepreneur to "business owner/manager." This requires scaling a number of business "growth walls" - specific and significant hurdles or challenges along a company's growth path. Along that way, the experienced business owner/manager proactively focuses on the right organizational issues at the right time, and ensures that similar issues don't resurface.

Once a company has become a successful start-up (developing a salable product, service or technology in a defined market niche) then, to grow effectively, it must build a sound organization infrastructure to be able to efficiently sell, make, deliver, service and support its offering. In effect, the company will not hurdle its first growth wall (usually experienced when the business is below $1 million in sales) unless it puts in place sufficient people and infrastructure to effectively handle the day-to-day operations of the business. The solution to this first growth challenge is:

Company Systematization, where the business needs to:

• Acquire sufficient and appropriate human, material, equipment and capital resources to fuel the business.
• Develop day-to-day operating policies, procedures and systems to coordinate the organization's daily work.
• Organize company functions (e.g., sales, operations, product development, administration, etc.) into separate and reasonably self-managed areas.
• Install appropriate human resource practices to bring on, retain, motivate and develop capable and committed employees.

As the organization continues to grow, more people and activities need to be orchestrated and managed. When the organization approaches $5-8 million in sales, the entrepreneur may no longer have the time to directly manage all the various company functions by him/herself. Consequently, the owner/manager needs to install and develop a management team that can operate different areas of the business on his or her behalf. Mechanisms must also be put into place that allow the owner/manager to coordinate and monitor the various organization functions that others are now managing. To hurdle this second growth challenge requires:

Company Management, where the business needs to:

• Perform organizational and functional planning and budgeting.
• Establish a functional area and individual performance management process.
• Institute a useful management information and reporting system, and sound financial controls.
• Build a capable and reasonably self-sufficient management team.

When this "wall" has been hurdled, then the business can manage itself into the realm of the mid-sized firm (into the many $10s of millions). However, as the organization again continues to grow, greater communication and collaboration among the company's larger functional areas is now needed. In order to stay agile with respect to its competition, and able to react quickly to shifting customer needs, the company needs to redesign itself. Otherwise it risks getting stuck by its larger size and inertia. Overcoming this last growth challenge requires:

Business-Unit Coordination and Alignment, where the business needs to:

• Move the company from a functional to business unit structure (along product lines or market niches) in order to better compete in the marketplace,
• Diversify its products and markets, and possibly grow through mergers & acquisitions.
• Create cross-company forums or teams for product/service innovation, quality/service improvement, process improvement and knowledge transfer.
• Use organizational leadership and culture as leverage for organizational change.

Organization success at this juncture is achieved when the different business units of the company can work together not only to help each unit to compete successfully and profitably, but also to take advantage of cross-business-unit innovation, joint ventures and knowledge transfer.

As a small business owner/manager, you need to figure out which growth wall your company is facing or approaching, target your resources on the next company growth issues to resolve, and provide leadership to help your people to scale and hurdle each growth wall successfully. This way, you will improve your chances for making it over growth walls to achieve business and personal success.


Harvy Simkovits, CMC, President of Business Wisdom, works with owner managed companies to help them grow, prosper and continue on by offering innovative approaches to business development, company management, organization leadership and learning, and management education. He can be reached at 781-862-3983 or .