The Growth Stages:
0 TO 9 EMPLOYEES: The One Person Show
10 TO 19 EMPLOYEES: Start Delegating
20 TO 29 EMPLOYEES: Operationalize & Customer-centric
30 TO 49 EMPLOYEES: The People Crunch
50 TO 99 EMPLOYEES: Professionalizing
100+ EMPLOYEES: The Corporation
Excerpt from Cool Companies www.coolcompanies.ca
Content by Don Rumball. Interviews by Claudia Sammer.
Read PDF version that appeared in the Cool Companies industry guide [PDF] This version contains graphics and pictures.
TOP CHALLENGES IDENTIFIED BY CEOS
1. Hiring and retaining good employees
2. Visioning and strategic thinking
When they reach 100 employees, leading high-growth firms become diversified corporations. They are led by strong management teams with great depth and the ability to reinvent themselves and sustain long-term growth.
Marketing and products
The company adds many new product lines. The proportion of companies with 5 or fewer product lines drops to 55%from 64% in the previous stage. These companies have a very strong export orientation; only slightly more than a third still do not export at all.
The CEOs are leaders rather than managers, presiding over a multi-layered management team with embedded processes of planning and decision-making. The CEOs spend their time developing and maintaining the skills, tools and strategies that will enable their companies to continue to survive and prosper long after they are gone. Their strategic priorities are mostly visioning and getting large numbers of people working together; they attach great importance to developing talent and team building.
Financing, ownership and shareholders
To fuel the pressing need to finance the transformation of the business, there is a slip in the number of 100% CEO-owned companies from the steady 56% it was over 4 growth stages to 43% now. In companies where the CEO does not have 100% ownership, the trend of replacing private investors with increasing public shareholders continues, but, in addition, more corporate parents enter the picture as successful companies sell all or part of their companies to much larger corporations.
They compete on all fronts. Quality and competitive prices are a condition of survival, and, as such, taken for granted by the CEOs, because the senior managers make sure they are dealt with effectively. Design has become embedded as a core competency, which takes care of some of the preoccupation with quality, since quality is built into the product and the process. Their competitive edge lies in the unique skills of their employees and flexibility in meeting their customers’ current and future needs. However, while these competencies are the same as an earlier stage, this time companies depend on them for the ongoing development of new products, rather than customer service.
Company Profile: Fatkat Animation Studios
Gene FowlerFounder and CEO, Fatkat Animation Studios co-produced the Happy Tree Friends TV show and has done work on The Family Guy. 107 employees (grew from 30 to 107 employees in 1 year), founded in 2003, 977% sales growth from 2004 to 2006, “#1 fastest growing company in Eastern Canada” according to 2007 Progress magazine, 2006 Ernst and Young Entrepreneur of the Year Award winner for Atlantic Canada, fatkat.ca, based in Miramichi, NB.
Building a management team
When I started in 2000, it wasn’t really my company. We were just a bunch of guys who had a small gig doing a cartoon shoot for some yahoo in San Diego. . . . (Eventually) his investors pulled out and he closed his office. Since he was our only client, we went out of business. It was a blessing in disguise. I didn’t really know anything. I was 23 years old and managing a staff of 50 – with no management structure. I was an animator; I had no business experience. But, I learnt a lot about how not to run a business from him.
When we really started Fatkat, the first thing I did was hire an accountant because I’m no good at bookkeeping, and I hired somebody to keep the business coming in. The sales guy was selling caskets for a funeral home! Now those 2 people are my VPs and help me keep this ever-growing business going. They‘re nuts, just silly, which fits perfectly with me. I make sure the people that are closest, the most important, are more like me than anybody else. Find someone who’s very much like you in every respect but smart in that area (that is your weakness).
My management style is to run it with your heart – just be super honest, super nice, and actually give a %$#! about people. It makes a difference! I ran Fatkat that way for as long as I could and for 20, 30, 40 people it works well. Once we passed 40 people in May last year (2006), we got an HR person.
(To get myself out of) dealing with production issues, I started implementing producers. I chose people who were really good at just managing their day to day quota as an animator. I wanted somebody who knew the process inside and out, and somebody that the people on the floor respected dearly. The producers also deal with clients so the animators don’t have to. Then I appointed a VP of Production to take over my entire role. So that frees me up.
What’s the benefit of a well organized business?
Because of what we put in place to manage our growth, we look very tasty to clients that have big budget productions. It’s the management infrastructure that they fall in love with. They like that we have 5 full time accountants, 5 full time sales people, 5 producers and that the CEO is an animator. That’s why we get the big gigs. The other studios in our area are still being run by artists.
What does the CEO of a 100+ employee company do?
If I’m not growing at the same rate as my company, I’m not the right guy. I’ve an obligation to the people at Fatkat to keep us competitive in the marketplace. All I do is I look around the corner all the time and try to predict and see what’s coming up to make sure that our company is positioned well for the turn. I read trade magazines, talk to a lot of people, and joined a CEO club. I’d rather be making a cartoon, but I know that this is my job now. I have to look for my future and now I have 107 buddies downstairs relying on me for their jobs and to help them grow as I promised that I would. It puts a lot of pressure on me to keep the big picture in mind, not to become unfocused.