Contractor Growth Cycles and Decision Points

As contractors grow, they must make decisions and changes around five key areas. At these decision points, they may be experiencing some or all of the eight typical symptoms including stress, customer complaints, and inconsistent growth.

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D. Brown Management
February 3, 2018 3 minute read
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Business Growth Cycles. All Business Experience It.

 

All contractors navigate both growth cycles in their business and external market cycles. Throughout this growth, there will be critical decision points requiring major choices and change:

  1. Growth Trajectory: What size do you want to grow to, over what period of time, and why? Remember that growth presents both challenges and opportunities. No business has grown indefinitely. Make sure your rationale to grow, to stabilize, or to scale back is clear. 
  2. Market Strategies: Your strategic market choices and experiments must evolve with both growth and changing market conditions. 
  3. Organizational Structure: These must evolve to (1) align with your markets, customers, and geography, (2) your business model including growing the support operations and expanding the project teams, (3) developing the leadership required for succession, and (4) building the governance structures for sustainability. 
  4. Management Systems: All the processes, workflows, tools, procedures, training, and quality control required within each functional area of the business model and fully integrated to deliver value to all stakeholders including customers, employees, and owners. These management systems and the integration of them increases with each stage of growth requiring leaders with very different capabilities at each level.
  5. Leadership Focus: Even if the job role description doesn't change for the top leadership roles, the capabilities, time horizon, and time allocation must change at about every tripling of headcount. This short video intro to The Leadership Pipeline summarizes these well. Remember that this focus change must happen throughout all layers of the organization, or you will end up with a hollow management team. 

 

8 Indications That You Might Be at a Growth Inflection Point

Discuss the details with your management team and be aware that exceptional market conditions, customer concertation, or highly competent micro-managers on your team may be masking some problems. The reverse is also true. 

  • Stress on Team / Turnover
  • Systems Breaking Down
  • Increased Safety Incidents
  • Increased Rework
  • Inconsistent Profitability
  • Decreased Cash Flow
  • Customer Complaints
  • Inconsistent Growth

Read more...

 

We exist to help contractors identify and navigate these decision points more effectively. There is nothing you can do to avoid the challenges that occur during these transitions. With the right timing, planning, and execution, you can dampen the downside challenges while accelerating the upside opportunities. 

If you feel like you might be at one of these decision points, please contact us to discuss your situation.

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