It’s often helpful to be able to position yourself in terms of how far you have come. Not only can you benchmark yourself against other small businesses, but you can see what lies ahead on your “Darwinian” journey, and begin to plan accordingly.
There are a number of small business frameworks in existence, as the topic has fascinated researchers for a long time. One which has stood the test of time is “The Five Stages of Small Business Growth” by Neil C. Churchill and Virginia L. Lewis, which featured in the Harvard Business Review in 1983! I personally like it because it breaks the journey in to logical phases :
- Success 1 – Disengagement (maintaining a profitable status quo)
- Success 2 – Growth
- Resource maturity
It then addresses and characterises each stage by an index of size, diversity and complexity, and described by 5 management facets:
1) Managerial style
2) Organisational structure
3) Extent of formal systems
4) Major strategic goals
5) Owner’s involvement in the business
It is relatively easy to position yourself on this continuum and therefore consider what is going to happen next.
Another favourite of mine is Leading at the Speed of Growth by Caitlin and Matthews. This explores a similar journey, but sets out the different stages in a, for me any way, unique manner. Based on research with over 500 entrepreneurs, it depicts a very concise and clear picture of what is happening at various stages of growth, including:
What are the company goals at this point?
What characterises the company?
What “Red Flags” are out there – i.e warning signs that all is not well and something needs to change?
Dangers of not changing
Critical responsibilities of the leader
Personal changes required
The book is full of great anecdotal evidence of the benefits of acting on such dynamic benchmarking, and the potential downside of ignoring the warning signs and carrying on regardless.
So, a useful exercise for you to do, as part of your taking stock, is to check where you are, how far you have come, what you need to keep doing, what you need to stop doing, and what you need to start doing. You can therefore increase the chances of making the right decisions at the right moment and thereby put the odds in your favour that you get the right result.