“Growth is never by mere chance; it is the result of forces working together.” James Cash Penney who launched the successful department store chain, JCPenney, in the 1900s knew that growth takes skill and effort. Managing hypergrowth is about setting up the right conditions while staying one step ahead of your critical moments.
What is hypergrowth?
The World Economic Forum considers hypergrowth to be the steep part of a company’s growth curve. It’s that stretch growth that we’ve seen in companies such as Facebook and Alibaba. More specifically, hypergrowth is when the compound annual growth rate is greater than 40%.
Managing hypergrowth at such levels teaches us many valuable lessons we can apply across any growth phase. Most importantly, hypergrowth isn’t just about luck or the right timing. In reality, leaders focus on scalability and talent development when managing hypergrowth, almost more than markets and clients.
Technology is another critical part of managing hypergrowth. In fact, digital transformation along with new global markets have been a key factor in enabling hypergrowth. VimpelCom was one of the first companies to experience managing hypergrowth as it disproportionately grew Russia’s cell phone market. Its CEO, Alexander Izosimov, later coined the term hypergrowth in his 2008 article on managing hypergrowth in the Harvard Business Review.
Setting up your business for hypergrowth
The biggest difference when managing hypergrowth is customer focus. This isn’t just about listening to the customer but also about being nimble enough to adapt to their feedback. Your professional goal at this point is to get as many customers as possible and almost let them define your market as you adapt to their needs.
Hypergrowth companies are exceptionally strategic.
They don’t just focus on the top line revenues but are also constantly planning for roadblocks and future opportunities. Overall, those leaders define their business model around the product’s life cycle. Their roadmap then details the value propositions that excel customer expectations.
The fastest-growing companies focus on scalability when it comes to managing hypergrowth. This includes also scaling the teams and the culture, not just the product. Where many startups fail is that the can-do entrepreneurial approach dwindles. So, customers no longer get the tailored service they’ve grown used to.
Talent development strategy therefore becomes a priority for managing hypergrowth.
Even once companies have achieved hypergrowth, they still need to maintain an average annual growth rate of 40% for at least a year or more. This can’t be done without the right teams and the right culture.
Managing hypergrowth also means keeping an eye out for the critical moments that can either derail you or define your growth.
- The sudden spike in customers – customer centricity is paramount for hypergrowth but it also means keeping up with demand. In this case, managing hypergrowth means standardizing your processes and technologies to facilitate new market entry.
- Mistakes and stumbling blocks – real-time performance dashboards are key for managing hypergrowth and staying ahead of problems. Of course, problems still happen. That’s why you need a culture that supports front-line problem-solving and decision-making.
- New teams for new phases – make sure you have a strong human resources team who can monitor your skills gaps as you transition through each growth phase.
- Outgrown IT systems – managing hypergrowth often means dealing with outdated systems that slow you down. Don’t over-focus on marketing efforts such that you ignore your IT needs.
Leadership skills for the 3 key phases of hypergrowth
As we mentioned in our previous blog “how the fastest growing companies manage hypergrowth”, managing hypergrowth means implementing the right talent management program for your people. You can’t innovate and scale if you don’t have the right people for each stage of hypergrowth. Then, the critical moments outlined above are less likely to throw you off course.
Overall, managing hypergrowth demands a different approach. Yes, you need to scale and focus on revenue and profits but culture is by far what makes the difference. Moreover, you could be dealing with multiple markets spread across many cultures. All this within a fast-paced, high-pressure environment.
A leadership coach becomes a valuable ally. They allow you to work on your mindset, avoid burnout and test ideas for influencing a multicultural team, for example. Although, a question that often comes up is how to monitor progress. There are 5 key coaching KPIs you can measure including, for example, reduced turnover and the number of innovative ideas.
1- Edison – The discovery phase
This stage is about customer acquisition and discovering which markets are right for your product. This is about selling, selling, selling while constantly testing and tweaking processes.
As well as the 5 most in-demand leadership skills, it would help if you also had the following:
- Innovation – managing hypergrowth demands creative thinking and the ability to test ideas effectively. All this while not getting overwhelmed by the sudden increase of customers.
- Influencing – this isn’t just about understanding what customers need even before they know it themselves. It’s also about instilling a collaborative culture where people influence each other to drive for the best.
- Vision – without an inspiring future to work towards, managing hypergrowth will become a drain on people. Simultaneously, you need to define the behaviors required to implement this vision. As this HBR article on scaling culture explains, as well as blended professional development programs, leaders must reinforce the right behaviors.
2- Model T – Mass production
Managing hypergrowth now becomes about employee engagement. So, provide the right training and development tools to keep people focused and with a sense of urgency. Coaching can be an important part of this phase to support people’s emotional journey.
At this stage, you might also want to consider working with a hypergrowth management consulting company. They will deploy teams to support you onsite and guide you through scaling up to mass production.
- Execution – delivery, and outputs are key to keep driving returns at least 3 times the cost of customer acquisition. Teams need to adapt to data and learning opportunities given by early adopters to establish a product for the masses.
- Ensuring accountability – managing hypergrowth means identifying who is responsible for what. You then give them the resources and freedom to deliver, including upgrading to adequate IT systems.
- Resilience – above all, manage the culture so that it’s ok to fail but such that people support each other when they do. Moreover, hypergrowth comes with high pressure so leaders need to nurture resilience. They do this by encouraging open and transparent communication whilst instilling a flexible workplace.
3- P&G Stage – Differentiation
This long-term final stage is when you’ve opened up the markets to a multitude of competitors. You keep your data-driven mindset but now managing hypergrowth is about focusing on your brand. Furthermore, your training programs are founded on the assumption that people need to make time for personal development.
- Self-awareness – understanding our values and behaviors makes it easier to relate to customers to influence them to your brand. As this KornFerry article on customer centricity describes, we shouldn’t be trying to be customer-centric in the traditional sense of the word. Instead, we should be both customer-aware and self-aware.
- Developing talent – managing hypergrowth means hiring and developing people while ensuring solid succession planning.
- Relationships and culture – development strategies should include a bottom-up review of the company values. As part of this, get your teams talking about how to keep emulating those values in everyday activities.
Increase your chances of managing hypergrowth
Customer centricity is the core differentiator when managing hypergrowth companies. In practice, you have to adapt your processes, technologies and culture in response to early adopter feedback. Then, as you keep maneuvering through the growth phases, Learning and Development is critical. Only then do you have the right skills to scale while adapting to the customer.
Managing hypergrowth is both challenging and fulfilling. Simply remember to define your culture’s values and behaviors along the journey. Concurrently, prioritize your people and follow through with blended training and tailored coaching. They’ll thank you by delivering the hypergrowth journey you can only dream of.