Stage 20 to 29 employees: Operationalizing + Customer-centric
Research shows that there are 6 stages along the evolution from 0 to 100+ employees, each with unique characteristics and milestones. Here is a description of Stage 0 to 9 employees. This is a section in the article in Cool Companies magazine 2007 Vol.2 Issue 2: What are your company’s next growth stage?
Content by Donald Rumball, Chair of Cool Companies magazine’s Editorial Board, and past Business Editor of The Financial Post. Interview by Claudia Sammer, Founder and Editor of Cool Companies magazine.
Top challenges identified by CEOs in Stage 20 to 29 employees
1. Hiring and retaining good employees.
2. Technology and its integration.
3. Operations
Operational focus: To maximize production efficiencies, CEOs begin to operationalize their business; they set up systems that avoid having to reinvent the wheel.
Marketing and products: Something unusual happens to a company with 20 to 29 employees. The CEO gets close to their customers again, and many adopt an extreme customer-centred focus. Taking their lead from existing customers, they concentrate everything they do on serving their existing customers. As customers request additional products, they expand the number of product lines and tailor their products to fit their customers’ needs. Financially, this might not be the best choice for the company. New product development slows. They continue to add product lines, though at a slower pace. The result is that their customer base starts to shrink because they are not trying to find new customers for the products they offer. This is the first time many of companies take the plunge into exports. Most of them start with the U.S.. Using up-to-date technology is very important in reaching efficiencies and there is a big technology project.
HR: These CEOs are more realistic than they were in last stage about what their employees can do for them. They continue to delegate more responsibility as they grow. Two-thirds of them have a formalized management structure with 2 layers of managers, and 3 managers reporting directly to the CEO. Most CEOs have regular review meetings with employees rather than setting goals or meeting when milestones are reached. They shift toward bonuses as a means of motivating employees and manager. CEOs start to appreciate management talent.
Financing, ownership and shareholders: The portion of CEO with 100% ownership of their companies stays constant at 56%. In companies where the CEO does not own 100% of shares, there is a significant slow down in giving shares to employees as incentive because CEOs realize that with greater sales, the company starts to look more attractive to outside investors. Private investors become shareholders in 50% of the companies.
Planning: CEOs with a written business plan continues to climb. 47% of companies have then now, compared to 38% in the first two stages. Only 19% of CEOs have long-term strategic plans. Manager participation and frequency of business plan review increases. Since CEOs take their advice mostly from customers, there is little need for strategic thinking.
Core competencies: As in the previous stage, CEOs believe the unique skills of their employees and flexibility to deliver highly customized service are their top competitive advantages; however, in this stage their order is reversed.
The Entrepreneur QuoteGrace Baba, co-founder, Vice-President and Administration Manager, i³DVR International Inc. is a leading designer, manufacturer and supplier of digital video technologies for the security industry. 72 employees in Canada plus 39 employees overseas, 1,883 % growth in 3 years, bootstrapped, founded in 1990, BDC’s Young Entrepreneur Award for Ontario, one of Profit magazine’s 2007 fastest growing companies, based in Toronto, ON.
Grace Baba, co-founder, Vice-President and Administration Manager, is a leading designer, manufacturer and supplier of digital video technologies for the security industry. 72 employees in Canada plus 39 employees overseas, 1,883 % growth in 3 years, bootstrapped, founded in 1990, BDC’s Young Entrepreneur Award for Ontario, one of Profit magazine’s 2007 fastest growing companies, based in Toronto, ON.
- Systems and procedures
35 employees was a definite turning point for us. We had to implement new policies and have formalized policies versus informal ones that had worked when we were smaller and the communication was easier. Again past 50 (employees), we needed to hire more skilled people with management experience. We had gotten to a level where we decided we would rather hire people that have the experience already rather than learning how to do it ourselves. (At 50 employees) is also when we started looking into getting our ISO registration, which is really a quality standard. It helped us continue our work in standardizing. {What did you standardize?} Reporting structures, standardization of forms, introducing new marketing materials and updating our website… The image of our company was a key thing for us. We were coming to the table with some pretty big customers and it was important for us to portray the image that we could compete head-to-head with big security providers. So we needed to have marketing material that was the same if not better quality than those competitors.
For more descriptions on the stages of growth in a company’s evolution from 0 to 100+ employees, return to this article in Cool Companies magazine 2007 Vol. 2 Issue 2, What are your company’s next growth stage?
