managing rapid growth venture planning chapter 17 dowling fall 2005
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ManagingManagingRapid GrowthRapid Growth
Venture Planning Venture Planning Chapter 17Chapter 17
DowlingDowlingFall 2005Fall 2005
Managing Rapid GrowthManaging Rapid Growth
Stages of company growthStages of company growth R&D StageR&D Stage Startup StageStartup Stage Early-growth StageEarly-growth Stage Maturity StageMaturity Stage Stability StageStability Stage
Note: Few firms experience such smooth, Note: Few firms experience such smooth, linear stages of growth.linear stages of growth.
Managing Rapid GrowthManaging Rapid Growth
Core management modes (by Core management modes (by company size)company size) DoingDoing
<$3 million, <30 employees<$3 million, <30 employees ManagingManaging
$3-$10 million, 30-75 employees$3-$10 million, 30-75 employees Managing managersManaging managers
>$10 million, >75 employees>$10 million, >75 employees
Managing Rapid GrowthManaging Rapid Growth
Managing Rapid GrowthManaging Rapid Growth
Managing Rapid GrowthManaging Rapid Growth
Managing Rapid GrowthManaging Rapid Growth
Managing Rapid GrowthManaging Rapid Growth
Managing Rapid GrowthManaging Rapid Growth
The problem in rate of growthThe problem in rate of growth
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Rate of Growth
Managing Rapid GrowthManaging Rapid Growth
Issues faced in rapid-growth Issues faced in rapid-growth situations:situations: Opportunity overloadOpportunity overload Abundance of capitalAbundance of capital Misalignment of cash burn & collectionMisalignment of cash burn & collection Decision-makingDecision-making SurprisesSurprises
Managing Rapid GrowthManaging Rapid Growth
Industry turbulenceIndustry turbulence Rapidly growing firms wrestle with:Rapidly growing firms wrestle with:
Fast-growing industriesFast-growing industries Many new entrantsMany new entrants Competing products/servicesCompeting products/services SubstitutesSubstitutes Fluctuating pricesFluctuating prices Rapid shifts in cost and experience curvesRapid shifts in cost and experience curves
Managing Rapid GrowthManaging Rapid Growth
Culture and organizational climateCulture and organizational climate Climate of organization can have Climate of organization can have
significant impact on performancesignificant impact on performance Climate is created both by the Climate is created both by the
expectations people bring to organization expectations people bring to organization and the practices/attitudes of key and the practices/attitudes of key managersmanagers
An entrepreneur’s style and priorities – An entrepreneur’s style and priorities – particularly, how he or she manages tasks particularly, how he or she manages tasks and people – is well known by the people and people – is well known by the people being managed and affects performancebeing managed and affects performance
Managing Rapid GrowthManaging Rapid Growth
Approaches to managementApproaches to management LeadershipLeadership Consensus buildingConsensus building CommunicationCommunication EncouragementEncouragement TrustTrust DevelopmentDevelopment
Managing Rapid GrowthManaging Rapid Growth
Managing Rapid GrowthManaging Rapid Growth
Key points, Chapter 17Key points, Chapter 17 Demands of rapid growth have led to Demands of rapid growth have led to
invention of new paradigms by invention of new paradigms by entrepreneursentrepreneurs
The entrepreneurial organization today is The entrepreneurial organization today is flatter, faster, more flexible and responsive, flatter, faster, more flexible and responsive, and copes readily with ambiguity and changeand copes readily with ambiguity and change
Entrepreneurs in high-growth firms Entrepreneurs in high-growth firms distinguish themselves with leading distinguish themselves with leading entrepreneurial practices in marketing, entrepreneurial practices in marketing, finance, management and planningfinance, management and planning
Managing Rapid GrowthManaging Rapid Growth
Key points, Chapter 17Key points, Chapter 17 As high-potential firms “grow up big,” As high-potential firms “grow up big,”
they experience stages, each with its they experience stages, each with its own special challenges and crises, own special challenges and crises, which are compounded the faster the which are compounded the faster the growth.growth.
Establishing a culture and climate Establishing a culture and climate conducive to entrepreneurship is a core conducive to entrepreneurship is a core task for the venture.task for the venture.