Managing growth requires forward-thinking.

Some people will tell you that it’s the best problem you can have. Your company is a success, and as a result you’re growing. While it’s true that expansion and increased revenues are the things every business owner hopes for, it’s a problem nonetheless, and one that requires a deft touch and plenty of forward thinking.

Take, for example, Cedar Point, a popular amusement park in Sandusky, Ohio. Marketing Director Bryan Edwards says the park has enjoyed a surge of popularity in the last several years thanks to an increase in interest in the industry. “There’s really been kind of a boom here just in amusement parks in the last few years,” he says. This has resulted in Cedar Point becoming a very literal example of managing growth, as the park and the number of its attractions have swelled.

“Since 1989, Cedar Point has built a new coaster about every two or three years,” Edwards says.

Although the vast majority of growing companies in America don’t have to worry about roller coasters or where to place new snack stands, managing and controlling growth can be just as frightening a ride as the tallest coaster. Without proper planning and management, growth can be like painting yourself into a corner – almost there, but unable to make the last crucial steps toward completion.

Three-Headed Dragon
Robert Benson is the founder and president of American Business Advisors, a Colorado-based consulting firm that specializes in helping growing businesses stay on top of their progress and not let it get away from them. He says growth by itself is never a bad thing, but combined with a lack of preparation it can be disastrous.

“I think control is probably the most challenging aspect of it, and managing communications would probably be right up there with it,” he says.

The three biggest contributors to this troubling situation, Benson says, are insufficient operating systems, personal stress and a lack of formal planning. Keeping operating systems updated prevents outmoded processes from letting new opportunities slip through the company’s fingers, Benson says.

This extends down to a company’s communication infrastructure, as well. “Often when small companies are expanding rapidly, they try to communicate the same way they’re used to, which is by talking, and they need to have communications systems set up to keep the information flowing,” Benson says.

Evolution of Business
Communication is especially important as companies begin to become more complex, Benson says. Although a small company with few employees can allow for one person to make all the decisions, larger companies need intermediaries who have to be informed all the time. “As a company grows, it’s becoming more of an organism, and a small company generally functions like, ‘There’s 10 of us and I’m the boss, and I’m the central processing unit and I tell everyone what to do,’” Benson says. “You can do that when you have 10 people, but you can’t really do that when you have 100 people.”

The odds of a start-up reaching 100 employees is actually very low, Benson says, something he attributes to a lack of planning. According to the Small Business Administration, 75 percent of start-ups fail within three to five years. Benson says the rapidly increasing complexity of a growing business and the lack of a clear vision for growth bring many businesses down.

“Not only is the organization complex to manage, but the finances are complex to manage, because when it’s small you can almost manage it like you can manage a home budget,” Benson says. “If a company doesn’t have a good handle on how to manage a more complex financial structure, what happens is they effectively end up borrowing money from their vendors or suppliers, and that can lead to strained relationships.”

Be Prepared
The Boy Scout motto “be prepared” fits almost any situation, and Benson says managing growth is no exception. Having a plan to keep growth under control and adapt the company to its new situation is the best way to cope with it, he says. “The planning creates a vision of where you’re going,” he says. “[Not doing so] is like getting up and saying, ‘We’re going on vacation, but we’re not going to tell anyone where we’re going.’”

Establishing the foundation for growth means first understanding what growth will mean to the bottom line. “When we go into a company, the first thing we try to establish is a financial projection so that they have a track to run on financially,” Benson says. “We don’t really look at that as a budget; we look at it as a financial projection.” This projection should lay out what the company expects to happen in the near future and the reasons behind it, providing a framework for the company’s plan.

Edwards says Cedar Point has a continual growth plan in place, one that changes regularly based on the decisions of its management planning committee. The committee reviews customers’ comments and develops a three- to-five-year plan based on its projections. A recent feature of its current plan was designed to tackle the problem of staffing.

“We hire approximately 4,000 to 5,000 employees every summer,” Edwards says, but many of these employees are college students who get called away when classes begin again. Because the park recently extended its season all the way through September and October, a new plan had to be created.

“We’ve actually had to look overseas to hire international employees from around the world,” Edwards says, adding that the park has built dorms for international workers. The park has hired about 1,000 employees from overseas to help keep it running smoothly through the expanded schedule.

Team Players
A solid plan doesn’t make much difference if the people in charge of executing it don’t know what they’re doing. Benson says that many managers in growing companies have good gut instincts for the business, but lack the finesse and technical understanding that comes with formal management training.

“If I had to take a guess, I’d say 98 or 99 percent of the managers and supervisors have never had any formal training,” he says. He recommends growing companies establish formal training programs to give its managers and supervisors the skills necessary to guide the company through a trying time, preferably conducted internally.

Likewise, executives can easily become overwhelmed and frazzled by rapid changes unless they figure out how to manage their time effectively. The personal stress that executives can feel during these times can be just as damaging as an unprepared management. “The unknown creates a lot of stress, whether it’s feeling like you don’t have the skills to do something or it’s feeling like you don’t know where you’re going,” Benson says.

He also recommends that companies seek out professional help. Not the psychiatric kind, of course, but from financial specialists.

“I don’t mean a bookkeeper, I mean someone who is degreed and skilled in finance,” he says.
Many companies don’t understand how growth can affect their complexity, he continues, and it’s the meticulous planning and specialization he espouses that helps them survive the dips and peaks that come with growth. “They sort of have this naïve perspective that they’re doing $1 million worth of business, and they want to have $2 million in sales, so they hire another 10 employees,” Benson says.