How Complex Is Your Business?

originally published 3/2/2016

While working with one of my clients whose medical practice has been growing very rapidly, the subject of maintaining organizational focus and culture came up. As our discussion progressed I was reminded of a few flip charts Brad Sugars, the founder and chairman of ActionCOACH, presented at one of our conferences. Brad first drew a two person company with one direct connection between the people. That flip chart looked something like this:

The next flip chart showed a three person company that had three direct connections between the people, looking something like this:

His third flip chart was a four person company with six direct connections:

Brad’s final flip chart was of an eight person organization showing twenty eight direct connections.

My client, with a stunned look on her face, saw this and said “No wonder I’ve had so many problems controlling the growth of my business.”

Just to recap:

Number of People   Number of
Direct Connections
2                                  1
3                                  3
4                                  6
5                                10
6                                15
7                                21
8                               28
9                               36
10                             45
50                       1,225
100                    4,950

The simple formula for this is:

Direct Connections = ((Number of People * (Number of People – 1) / 2)

Using this formula it is easy to see that the level of complexity in a company grows at a much greater rate than the company’s growth rate.

Is your business starting to look a little bit more complex than perhaps you realized?

So how are we to grow our businesses, maintaining organizational focus and effectiveness? There are four key things you must accomplish in order to grow in control:

1. Have a clear company Mission, Vision and Culture (MVC) – A strong and clear MVC that is aligned and congruent with your company’s Unique Value Proposition (UVP) is the cornerstone of healthy consistent growth.
2. Communicate and Educate – You must constantly communicate your MVC and UVP to your team, both internal and external, and to your customers, both existing and potential. You must educate new team members and potential customers about your MVC and UVP and the why behind them (Read Simon Sinek’s book “Start With Why” for further insight). And most importantly it is absolutely essential that you eat, sleep and breathe your MVC and UVP.
3. Plan your organization – Although many like to promote flat organizational models, completely flat organizations quickly lose their effectiveness as they scale up. Thus it is vitally important to plan the organizational structure of your company. At one end of the scale, completely flat will not allow for effective growth, at the other end of the scale, old fashion command and control will compromise creativity and nimbleness.
4. Be Proactive – Most companies grow organically, without very much forethought or advanced planning. Too often companies reach the point of no return structurally and fail. All of my clients have a vision of how their companies will be structured working backward from three to five years in the future. You should do the same.

My ActionCOACH colleagues and I will be happy to assist you to develop your MVC, UVP and Organizational Structure, all of which will prepare your business for exceptional growth.