Looking To Grow Your Company? Avoid These 3 Landmines

June 15, 2011

As a venture capital firm based in Boston, we invest growth capital in expansion stage software companies. These companies are no longer early stage. They have products, revenues and customers. They have built a foundation for a repeatable business model and now need to scale the business and grow it as rapidly as possible to take advantage of their market opportunity.

Therefore we deal not just with the strategic issues behind rapidly growing software companies, but also the organizational challenges that every company faces when they experience rapid growth. It is often the organizational issues that hamstring companies looking to grow at above market rates. Every year our portfolio companies are challenged with the same three organizational landmines that can derail the best of plans.

There was an article this week I read that discusses the three landmines that founders/CEOs and their management teams need to consider as they prepare for company growth. The article from McKinsey Quarterly is titled Preparing Your Organization For Growth.

In the article, the authors talk about these three areas that can derail your company growth strategy:

  • Stifling organizational structures
  • Unscalable business processes
  • Unprepared people

There is no need for me to go into detail since you can read the article via the above link, but I can say that most CEOs devote all or the majority of their time to the strategy aspect and not enough time to organizational challenges. Don’t make the same mistake… this is an article you should print out and put in your annual planning folder to share with your management team and review every year.

When you are looking to build the next great software company and achieve a strategic exit or an IPO at some point in the future, you can’t afford to neglect the these three landmines. You may not recover.

All the best!

G

Venture Partner

<strong>George Roberts</strong> is a Venture Partner at OpenView. He enjoys partnering with companies and helping them achieve their goals through strategy, focus and operational execution. From 1990 to 2003, George spent 13 years at Oracle Corporation, most recently having served as Executive Vice President of North American Sales. While at Oracle, George was responsible for over $1 billion in revenue and more than 2,000 employees, reporting directly to the company’s CEO and Chairman, Larry Ellison.