3 Ways to Ensure Your Business Grows at the Right Pace (guest post)

Excerpted from Pacing for Growth: Why Intelligent Restraint Drives Long-term Success, by Alison Eyring (Berrett-Koehler Publishers, 2017)

3 Ways to Ensure Your Business Grows at the Right Pace

It’s difficult to know what the “right” amount of restraint is for a business. Sometimes, leaders lead with too little restraint, sometimes with too much. What’s clear is that it’s really, really hard to get it just right.

One reason it’s so hard is because we are leading organizations, and an organization is a complex combination of many interconnected systems. An organization is like the human body, which is an amazing structure of 11 different, interconnected systems. Take the respiratory and circulatory systems, for example. The respiratory system brings air into the body and removes carbon dioxide. The circulatory system picks up oxygen in the lungs and works like a transportation system moving blood filled with oxygen throughout the body and then taking waste in the form of carbon dioxide back to the lungs to be exhaled. These two systems have to collaborate and have clear touchstones. One interfaces with the external environment and the other is an internal system. If the air quality is very poor, both suffer. If the body is sick, they are both impacted. If the body is very healthy and strong, they work better, together.

Endurance training systematically increases the capacity of our complex body to withstand the stress of training without breaking down. Just as bodies are impacted by the external environment and the health of the body itself, organizations also are impacted by external forces like government regulations, new technologies, competitor activity, and consumer preferences as well as the overall culture and health of the organization.

A company that anticipates external changes and effectively adapts is more likely to survive over the long term. This is why endurance training is an excellent parallel for how to increase a company’s growth capacity. Leaders who act like endurance athletes can systematically increase the capacity of their organization to execute their day-to-day business as they build capacity for the future— without damaging people and the business itself. Part 1 of this book builds off the endurance training metaphor to explore how leaders can push their capacity to the limit, but no further.

Principle One: Capacity Determines How Far and Fast You Can Go

Maximum capacity is the highest level of performance at which a system can perform without breaking down. It’s more than the sum of individual skills or attitudes, or the physical capability of a building or piece of equipment. When we understand the gaps between performance and capacity, and how maximum capacity in the future will be different from today, we can create a program to build capabilities that increase capacity. In turn, this process allows us to avoid “boom-splat” cycles of growth. When we break that painful pattern, we conserve human and organizational energy and resources to spend on building a base for sustained growth in the future.

Principle Two: The Right Capabilities Increase Capacity Capabilities are the power and practical ability to perform or execute a given task. To build capacity for growth, we need to master a few critical capabilities at the individual, team, and organizational level. Each business will have a small number of unique capabilities required by its strategy. In addition, our own and others’ research shows that there also are certain capabilities that predict growth. In this book, I focus on two capabilities that help to increase adaptability and speed: outside-in thinking and customer-aligned innovation. Building the right capabilities for growth allows leaders to increase capacity to execute the day-to-day business as it also builds capacity for the future.

Principle Three: The Right Pace Wins the Race

Pace is the speed at which we can perform for a given distance or period of time. As business leaders, we can push our organizations and people to go really fast for a short period of time, but if we go too fast for too long, we burn out our people and burn through our cash and other resources. In a race, we need to conserve some energy to maintain a fast pace and we need perseverance to sustain this pace even when it becomes uncomfortable. On the other hand, in training, we vary pace significantly because this triggers different development outcomes like strength or cardiovascular fitness. When you can train at “race pace” and can recognize “maximum effort,” you can pace yourself, your team, and the business to execute your strategies—and at the same time build new capabilities for the future.

Intelligent Restraint helps us manage the complexity that growth brings.

Where can you release more capacity for growth?

Alison Eyring is a global thought leader on building organizational capacity for growth. Founder and Chief Executive Officer of Organisation Solutions, Alison has 25 years of experience in large-scale organization design and change and executive development. She works closely with global leaders and their organizations, including Royal/Dutch Shell, BHP Billiton, Chubb Group of Companies, NEC, and Thomson Reuters. She also serves as an adjunct Associate Professor at the National University of Singapore. Her book, Pacing for Growth, will be released in early 2017.