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Will organic growth lead to bugs in your business structure?

By Richard Coughlin and Spring Gowling, PA business design experts

Companies that deliver rapid organic growth risk creating unstable and fragile operations.

Going organic may have that wholesome appeal with real (or imagined) health benefits when it’s in our diets. In many respects, it’s a similar story for companies seeking organic growth. Certainly, there’s less chance of getting some of the nasty inherited problems of a growth strategy built on acquisition. However, just as you may find that insects have crept into your organic vegetables, companies who manage to generate rapid and sustained organic growth can suffer from bugs entering their systems, that eventually will nibble away at the bottom line.

The issue with rapid organic growth is that it often outstrips the organisation’s ability to plan and adapt its operations to the increased scale. Things go really well for a while, but ultimately, the structures, capabilities, controls and processes start to creak and can break if left unchecked. This results either in increased errors and failure, in increased attrition as talent checks out, or in unfortunate surprises as unmanaged risks become reality.

Organic growth is incremental, so companies don’t spot the pressure on operations that’s building. It’s worth taking a closer look under the skin of your organisation before the problems break through the surface.

Is growth putting your operations at risk?

If you recognise some of these symptoms below, you may have bugs growing and multiplying in your business:

  • Do you have an over-reliance on key individuals who ‘know how things work around here’, rather than a clear process?

  • Are you constantly reacting, rather than proactively planning change?

  • When new tasks emerge, is your reaction to just add it to the list of your most capable people, because somehow, they just make things happen for you?

Agility is often at the heart of being able to capitalise on market opportunity. But there comes a tipping point when agility turns into chaos. You go pretty quickly from operations that can easily absorbing new work, to a point where you need to add disproportionately more people to accommodate the extra work. You start suffering the dis-economies of complexity.

A business structure that has formed due to rapid and unprecedented growth can be unstable. Often, decision-making rights are confused and the organisation ends up with a lot of duplication in the fastest growing business areas. Confused accountabilities and competing priorities of managers can lead to inconsistent messages coming down to staff.

Dealing with the pests for healthier organic growth

Organic growth can be brilliant. But if growth has outstripped your business capability it’s time to root out the nasty pests that cause you problems.

The great news is that many companies find that improving their business structure is seen by your staff as a very positive thing to do. They are in the firing line for the stress and strain of un-managed growth and may be crying out for some relief.

It also needn’t mean heaping unwelcome bureaucracy onto the organisation. It’s about planning and designing the business in a way that’s scaleable. It’s about understanding how the work flows through the organisation, then making sure people really know what they do, who they work with and how their work really contributes to business delivery. It’s about being clear on what the really important decisions are in the business's operations, who is making them and against what criteria. It’s about understanding the future demand for work and planning how to acquire the right capacity to deal with it, when it’s needed. In short, it’s about building operations that know how to grow.

It doesn’t stop with a one-off organisation design: the lesson here is to keep planning and evolving your business structure alongside the growth of your company. Once you have a view on what the future brings and what your company needs to do to respond, you can continue to adapt your business in a structured way to help ensure you can stay organic without the nasty surprises.

Find out more about our work in business design.

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