Are you driving hypergrowth or is hypergrowth drowning you and your business? It’s one thing taking customer care to the next level such that your compound annual growth rate (CAGR) is 40% or more. It’s quite another when you can’t meet your customers’ expectations. So, you’ll need a solid strategy to keep up with how the fastest growing companies manage hyper-growth.
What is hypergrowth?
Simply put, hypergrowth is when a company is growing at the steep part of the growth curve. To be at that point, they have a compound annual growth rate (CAGR) of 40% or more. For obvious reasons, many companies aim for such growth.
American entrepreneur Marc Andreesen coined the term product-market fit to describe the key driver behind hypergrowth. Essentially, if your product isn’t a perfect match for what the market needs, you won’t get grow faster. Alongside that unique product though, stellar execution and solid strategic focus are how the fastest growing companies manage hypergrowth.
Although, first understand the various stages of hypergrowth for knowing how the fastest growing companies manage hypergrowth:
Stage 1: The Edison Stage or the Drunken Phase, according to Nikhyl Singhal, VP of Products at Facebook
In honor of the inventor, Thomas Edison, this stage is all about invention. Essentially, knowing how the fastest growing companies manage hypergrowth means discovering your niche in stage one. This is about defining your product and market fit such that your customer literally can’t live without your product.
At this stage, you need a culture of innovation alongside agile project management skills. It’s important you don’t follow the traditional and longer product development methodologies. Instead, you want people who can make decisions quickly and effectively and not be afraid to make mistakes.
Stage 2: The Model T Stage or Product-Market Fit
This phase for how the fastest growing companies manage hypergrowth is about emulating how Henry Ford’s Model T revolutionized mass manufacturing. So, you take a product and scale it up effectively and ultra-fast. Of course, you still have to keep up with demand so your back office operations will have to be streamlined and lean.
A good rule of thumb for this phase is that your returns should be at least 3 times what you’re spending on customer acquisition. That’s how you create a mass market.
Stage 3: The P&G Stage and hypergrowth
At this stage, you’ll learn the most about how the fastest growing companies manage hypergrowth. They don’t just sit back but, like P&G, they’re constantly investing in innovation as well as learning and development. People are by far the priority because they’re the ones releasing new products that keep pushing your competitive advantage.
When you look at how the fastest growing companies manage hypergrowth, you’ll see lean processes. Leaders also leave decision-making to the frontline while they work on culture. They do this by role-modeling and rewarding the right behaviors.
Problems with managing hypergrowth
The World Economic Forum has carried out a study that compares the fastest growing companies at 20 to 40% with hyper growth companies. The infographics clearly show that hypergrowth companies struggle with funding, talent, technology and regulation.
In contrast, high-growth companies tend to also face client and market issues. Nevertheless, they also have to deal with talent issues. Digital transformation isn’t just driving growth. It’s also putting employees in control of who to work for and from where.
How the fastest growing companies manage hypergrowth starts with understanding the core problems:
- Burnout – as demand keeps increasing, hiring the right number of people to match is a challenge and takes time. This often leaves the current teams taking on more workload than they can cope with. So, focusing on people is how the fastest growing companies manage hypergrowth.
- Overloaded systems – just like people can get overloaded, so can the systems. Where your digital solutions might work perfectly for a company with a few 100 people, things start falling over when you triple that in a few months. Instead, plan ahead for your systems just like how the fastest growing companies manage hypergrowth.
- Increased costs – it’s too easy to throw money at marketing in the hope to achieve hypergrowth. This clearly isn’t how the fastest growing companies manage hypergrowth. Without a solid product-market fit, it doesn’t matter how much money you through at things, you can’t force customers to buy.
How to solve hypergrowth problems
All success creates new challenges and managing hypergrowth means having the right talent who can be nimble and adaptive. How the fastest growing companies manage hypergrowth relies on getting the 3 key themes right along with continuous improvement:
1. Community growth
Knowing how the fastest growing companies manage hypergrowth means understanding how they promote focus and learning. They’ll recruit highly self-aware people with a growth mindset who can balance the long-term view.
How the fastest growing companies manage hypergrowth isn’t just about training their people. They’ll create individualized development plans around soft skills and emotional intelligence. This enables people to flex their roles more willingly and to believe in their potential for change.
No matter how good your business model is, you’ll fail your clients if it can’t shift according to their needs. For this, you’ll need the latest technology for real-time communication and data analysis.
The biggest challenge for how the fastest growing companies manage hypergrowth is to keep a personal touch. Clients want to feel special as if they’re your only client. Again, this means leveraging digital technology and your team’s people skills for the ultimate customer experience.
When you learn about how the fastest growing companies manage hypergrowth, you’ll soon see that they focus on expected behaviors. Leaders know they can’t be in every decision or every detail. Instead, they promote an interdependent culture, as described in the 5 Most In-Demand Leadership skills article, through vision, values, and purpose.
With an interdependent culture, your business will be a self-sustained system built on peer-to-peer feedback, co-learning, and shared discovery. Your teams will be highly engaged through agile and continuous learning, all for the greater purpose of the business.
Aligning with the stages when following how the fastest growing companies manage hypergrowth
As you can imagine, the above themes need constant adjustment and review. Moreover, you’ll need to analyze feedback at each of the stages of hypergrowth both from your leader and your teams.
Talent is by far the biggest priority for how the fastest growing companies manage hypergrowth. In fact, they don’t just innovate for their products but also for developing their people. This means implementing tailored plans and understanding individual motivations at each of the stages, even before you can say you’ve achieved hyper growth.
Moreover, hypergrowth company values are founded on mutual support where people can turn to each other to ensure balanced workloads. On top of that, leaders will over communicate consistently to provide reassurance and structure within the chaos of hypergrowth. People need to believe that the impossible is possible.
What’s next for how the fastest growing companies manage hypergrowth?
All tech startups dream of becoming unicorns thanks to hypergrowth. Nevertheless, hopes and dreams don’t just give you a valuation of over $1billion overnight without being listed. You need to find your product-market fit with outstanding innovation.
Once you’ve found that market niche, you scale up to the mass market with the right talent, technology, and culture. Without the core behaviors that your customers have grown to expect, you’ll risk losing them overnight to your competitors following close behind.
The hyper growth journey is an outstanding one but it can also be a painful one. So, remember to keep your values alive and enjoy the journey to follow how the fastest growing companies manage hypergrowth. Or as Tony Hsieh, CEO of Zappos says, “stop chasing the money and start chasing the passion”.