The pitfalls of growing too fast and how to protect yourself against them?

Scott Hoots is the CEO of QC Kinetixa leader in the regenerative medicine industry.

Growth is usually a positive thing. When we are children, we are measured on a growth chart to ensure that we mature at a healthy rate. Likewise, franchisors want to grow their brand to expand their earning potential. But just like kids going through growth spurts, franchises can experience growing pains with rapid development.

The problem

Growing pains often stem from a mindset issue. When leadership sits around the table devising growth strategies, it’s often just economic talk. After all, these are business, and money drives growth. The problem arises when there have not been enough discussions about brand development.

I am a runner. What I know is that runners wear different types of shoes depending on the race. Olympic sprinters wear a shoe designed for speed. Conversely, marathoners look for a shoe with more stability to improve their long-distance performance. Both types of shoes are necessary to achieve different goals.

To grow a franchise at a successful pace, short-term planning is crucial and long term development.

growing pains

We may become fixated on opening as many locations as possible as quickly as possible to increase our footprint in the marketplace. When a leader wants the brand to grow quickly, but doesn’t properly plan how to achieve the goals, there can be problems such as cash flow, diminished brand standards, and damaged corporate culture. Pay attention to the following areas.

1. Finance: Without a strong financial strategy, there may not be enough short-term capital to fund new locations at the desired pace. There are healthy strategies for growth. If you plan to open, say, 25 locations in a year, and you have the resources, stick to the plan.

Another drawback is that we often turn our heads and lose pace, stretching out to see how the competition is doing. This will create hurdles that you did not foresee. Keep an eye on both the competition and your finish.

2. Brand Standards: You can’t create positive buzz about an inconsistent brand. In the early stages of growth, your job is to generate leads. You really need to sell the benefits of your emerging franchise to potential candidates. It’s hard to sell sometimes because you don’t have the brand recognition, so you work hard to overcome that. What you do have is energy, and you set a pace and set standards. Strive for strong relationships with franchisees.

The problem arises when growth is so rapid that the uniformity of training, support and recruitment decreases because you have determined an unrealistic growth rate. Don’t get sloppy. Short-term and long-term standards must be consistent. Whatever standards you set for franchisee number one should be the same for franchisee number 101. If you deviate and make exceptions, you risk damage to the brand.

3. Healthy Work Environments: Perhaps one of the biggest problems with rapid growth is the strain on your team. When the pace gets too fast, you no longer give employees creative space to do their best work. Demands on time and effort can cause an often unhealthy level of stress. The culture ranges from people who feel energized and valued to overworked and unappreciated. Poor growth planning means that fires are extinguished reactively rather than being in control, at the expense of personnel. There could be a whole system failure where vital details fall through the net, affecting the flow of leadership to the team, to the franchisees to the customers.

The solution

If you want to know the solution for sustainable growth, the answer is people. I’ve found that retention in a fast-paced environment shouldn’t be a problem if you attract the right people. Yes, your team’s workload will be heavy at times. You will have to do more with less. However, there are plenty of qualified candidates eager to be part of a growing brand. You have to trust your gut.

Look for visionaries who have energy in a fast-paced environment. They’re out there. These people are innovative, resourceful, persistent and goal-oriented risk takers. When I’m interviewed, I like someone who looks me in the eye and honestly answers some very profound questions. Consider these directions.

• Tell me about a time you failed. Failure is part of life. Listen to how the individual coped and overcame it. Failure makes you work harder, and it often dispels arrogance. Visionaries are confident, but check their ego at the door.

• Tell me about this company. Pay attention to how much they have prepared for the interview. I’ve found that if they don’t want to learn enough about the company when they need to make a good impression, chances are they don’t care about it later. Go-getters do their homework. They transcend the learning curve.

• Tell me the last brave thing you did. The candidate can answer this question with a professional or personal answer. Try to assess how they work. It’s not about what they did, but that they weren’t afraid to do it.

• How do you plan to grow in your career? With this question you can see what is important to them and where their interests lie. They may have untapped potential that could be beneficial to your business.

Not long ago, a dynamic young man sent me his resume and wanted to make an appointment. He had talent and versatility, but lacked practical experience in the real world. If there’s one thing I know, you can’t search for people who just fit in boxes and have references that fit a checklist. You want people who have or want to develop a working career. I hired him and found a place for him, and I’m glad I did. He has strengthened our brand.

If you want to avoid the pitfalls of growing too fast, hire a team willing to wear a lot of hats, or in this case shoes. Because some days the focus is on sprinting, other days it’s the marathon, but we’re always running U.S race. Business Council is the leading growth and networking organization for entrepreneurs and leaders. Am I eligible?