3 Ways Success Can Kill Your Company

“You’re company is growing so fast you’re starting to imagine private jets and company junkets to the French Rivera. It’s hard even to conceive of a situation that could turn your rapidly growing company into a smoldering pile of ash. The very idea that success might kill your company seems preposterous. Besides, the whole idea of success destroying a company is oxymoronic. Perhaps; except for one thing, unbridled and unmanaged “success” has destroyed more companies than a CEO with a meth problem and million-dollar signature authority.

Here are three ways that traditional measures of success can, in fact, torpedo a company:

1. Growth.
Growth can send your company up in flames in two ways: unmanaged growth and dissolution. Unmanaged growth is where the company executives see growth for growth’s sake as not just a good thing, but the only thing. Such buffoons believe that the goal of growth is growth, in and of itself.

You typically see this kind of blow up in companies whose growth strategies are “growth by acquisition.” Growth by acquisition is the practice of buying up smaller companies — and thus acquiring their offices, customers, and revenue — all the time growing, at least on paper. The problem with unmanaged growth is that when you gobble up a smaller firm you also inherit its problems. Even the best due diligence won’t tell you when Al in accounting tends to get a bit over amorous after his third drink at the office holiday party, for example. Add to that the complexities of managing multiple offices, completely different cash flow needs, and having multiple corporate subcultures and you effectively have something like a pyramid scheme. To keep it going, you can only continue building the company, until it collapses in on itself.”

Read the full post here.