At Innecto we have extensive experience with fast growth businesses, watching and walking with clients as they grow through the chaotic teenaged years into a more structured maturity. This phase usually brings some extremely painful periods as the organisation sheds long term employees and brings in new teams with more experience of bigger businesses. Helping the Executive think through their organisation design is one of the key elements of this period of growth.

As the business matures, the focus often shifts from growth to profit and with it comes more emphasis on becoming a leaner operation. Unfortunately - sometimes catastrophically - this often coincides with the business reaching the top of an S shaped growth curve (see illustration). The original business momentum slows, there is insufficient spare talent to invest driving a new S curve through new acquisitions or innovation. Wheels start to spin and development stalls.

Our experience in organisation design gives us insight into several key pain points.

• Typically businesses are weaker at the level under the top team. In our Evaluate™ model (see illustration) the team at ‘Translate’ (Heads of Department) struggle to gain traction in translating strategy into action. Often promoted from successfully ‘running the factory,’ they are unaware of the different challenges of their new role and how the business is depending on them to translate future strategy into action plans for their part of the business. What can happen is that the top team are adjusting the direction of travel by degrees, but the rest of the business is unaware because the key link in the chain between the leadership and the 'factory' of the business is not transmitting properly. The top team feel frustration as they sense nothing is happening lower down the organisation and everyone feels they are walking through treacle. A solution is to work with the ‘Translate’ team to clarify role expectations and identify performance standards which can really help to improve delivery in the business.
• For businesses looking to kick on and start the next period of growth, having a ‘coiled spring’ of potential talent ready to develop and lead nascent growth is counterintuitive, but necessary to ensure the future sustainability of the organisation. Too often at this phase leadership are cutting back on hiring talent, rather than building capability to take the organisation to the next level. Identifying who will lead the next phase of growth - either organic, or acquired, is key to successful and sustainable equity growth.
• Finally, a classic response to all of these woes is to simply throw money at them - hire more and more expensive people to lead the different functions. Unfortunately this may still be ineffective if the organisation further down isn’t working effectively. We worked with a fast growth fashion retailer where a big-hitting management team failed to gain traction because there were simply insufficient people at lower levels of the organisation who understood the job and could deliver results. The outcome? Highly paid individuals being drawn into operational stuff they could do with their eyes shut, and becoming more infuriated every day.

If you recognise these problems in your own organisation, we suggest an organisation design audit using our Evaluate™ tool. An organisation design strategy review and improvement plan can save time, pain and money. For help in analysing and diagnosing where your organisation design is working or failing, give Innecto a call on 020 3457 0894.

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