{"id":35366,"date":"2021-05-21T11:40:32","date_gmt":"2021-05-21T15:40:32","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=35366"},"modified":"2021-05-28T10:25:00","modified_gmt":"2021-05-28T14:25:00","slug":"stages-of-company-growth","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/stages-of-company-growth\/","title":{"rendered":"The 9 Stages of Company Growth: The Blitzscaling Way"},"content":{"rendered":"\n

What are the nine stages of company growth? Why is it so important to change your management style<\/a> as your company grows?<\/p>\n\n\n\n

When a company grows, you must change the management approach because what worked when you had ten employees will cause chaos when you have a thousand employees. The book Blitzscaling <\/em>details the nine stages of company growth, from starting out to hiring executives<\/a>.<\/p>\n\n\n\n

Keep reading to learn about the nine key stages of company growth.<\/p>\n\n\n\n\n\n\n\n

How to Manage Teams Through Blitzscaling<\/strong><\/h2>\n\n\n\n

When a company is growing, it progresses through five orders of magnitude:<\/p>\n\n\n\n

  1. Family: 1-9 employees<\/li>
  2. Tribe: 10s of employees<\/li>
  3. Village: 100s of employees<\/li>
  4. City: 1000s of employees<\/li>
  5. Nations: 10000s of employees<\/li><\/ol>\n\n\n\n

    The management approach must change with each of these stages of company growth. What used to work at one stage will cause chaos in a bigger stage.<\/p>\n\n\n\n

    The company founder also has to evolve through each stage of the company.<\/p>\n\n\n\n

    1. Family (1-9): Founder personally pulls levers of hypergrowth<\/li>
    2. Tribe (10s): Founder manages people pulling the levers<\/li>
    3. Village (100s): Founder designs an organization that pulls the levers<\/li>
    4. City (1000s): Founder makes high-level decisions about goals and strategies<\/li>
    5. Nations (10000s): Founder figures out how to start blitzscaling new business units<\/li><\/ol>\n\n\n\n

      The 9 Key Stages of Company Growth<\/strong><\/h3>\n\n\n\n

      A company that is growing rapidly needs to transition its approach along 9 different dimensions.<\/p>\n\n\n\n

      Transition 1: Small Teams to Large Teams<\/strong><\/h4>\n\n\n\n

      Naturally, as your company grows, the size of the team grows. With larger teams, it becomes harder to communicate, make decisions, and align everyone on the same mission.<\/p>\n\n\n\n

      In growing organizations, hierarchy is important so people know what the reporting structure is and have clear HR practices. Despite the recent popularity of flat organizations, the authors argue that flat cultures have a poor track record of results. People in flat hierarchies don\u2019t know where to turn for conflict resolution<\/a>, which slows down decision making<\/a>.<\/p>\n\n\n\n

      Transition 2: Generalists to Specialists<\/strong><\/h4>\n\n\n\n

      At each stage of a company, different types of people<\/a> are required to provide what the organization needs at that time. An analogy to the military: \u201cthe marines take the beach, the army takes the country, and the police govern the country.\u201d<\/strong> <\/p>\n\n\n\n

      In the beginning up until 100 people, you should tend to hire generalists. They adapt quickly to the rapidly changing needs of the business in its volatile early days.<\/p>\n\n\n\n

      At Village stage (100s of people), specialists are critical to scale. They perform functions better than generalists can, and you need them sooner than generalists can learn the job. Thus specialists may need to be hired from outside the org.<\/p>\n\n\n\n

      This can cause resentment from people who have stayed from the beginning, if they expected to be promoted to lead the specialized team. To counter this, set expectations clear from the beginning – just because they\u2019re running engineering now doesn\u2019t guarantee they\u2019ll be VP of engineering at 1000 employees.<\/p>\n\n\n\n

      Use the \u201ctours of duty\u201d model partly to help explain why they won\u2019t be promoted. The idea is that when someone joins a company, they commit to a stint of 2-3 years. At that point, they’ve advanced their careers and can now do great things elsewhere, without expectation from either side that they should stay.<\/p>\n\n\n\n

      Hiring generalists is still important at all stages of a company\u2019s growth. These are the undifferentiated stem cells of your organization, better equipped to handle the riskier and undefined problems than specialists are.<\/p>\n\n\n\n

      Transition 3: Managers to Executives<\/strong><\/h4>\n\n\n\n

      The types of senior team members you need to hire will change.<\/p>\n\n\n\n

      Managers manage contributors and execute detailed day-to-day plans. Executive manage managers.<\/p>\n\n\n\n

      Managers can be trained from within, because individual contributors can learn how to manage from good managers. In contrast, executives are initially harder to train because managers in your organization don\u2019t have model executives to learn from. <\/p>\n\n\n\n

      Therefore, hire executives from outside, preferably executives who\u2019ve been in similar stage companies before and dealt with similar issues as you\u2019re facing now. Then, as you have a successful executive model for managers in your company to learn from, promote from within.<\/p>\n\n\n\n

      To decrease your team\u2019s resentment for outside hires, 1) hire someone who\u2019s known to a member of the team so they can vouch for the person, 2) bring an executive in at a lower level than where you ultimately plan she\u2019ll end up, and let her prove herself to the team before promotion.<\/p>\n\n\n\n

      The exception to hiring from outside is if you have company-specific \u201csecret sauce\u201d responsibilities. These may need to be grown from the inside, if few outside executives have the specialty.<\/p>\n\n\n\n

      Transition 4: Dialogue to Broadcasting<\/strong><\/h4>\n\n\n\n

      At some point you can no longer have 1-on-1s with everyone, or even fit everyone into the same room. But you need to continue getting input from smart people, making everyone feel heard, and conveying key messages <\/strong>to people you don\u2019t work with directly.<\/p>\n\n\n\n

      Have weekly all-hands, transitioning to monthly\/quarterly as you get into village (100s of people) stage. A good all-hands meeting is organized, with an agenda provided in advance so a productive discussion can happen. Good meetings also help people get to know each other.<\/p>\n\n\n\n

      Communicate at scale. Write thoughtful weekly emails about challenges you\u2019re facing. Record videos. Meet weekly<\/a> with your company\u2019s new hires.<\/p>\n\n\n\n

      For remote team members, consider 24\/7 videoconferencing so people can feel connected to each other\u2019s offices. Use asynchronous communication tools like Slack.<\/p>\n\n\n\n

      Transition 5: Inspiration to Data<\/strong><\/h4>\n\n\n\n

      New businesses often need to start with inspiration when building their product. They don\u2019t analytics tools to tell them no one\u2019s using their product, nor do analytics tools tell them what to build. At this stage, the team needs to rely on intuition to build.<\/p>\n\n\n\n

      But as the company matures, they need plans and goals as guidance. Improvisation becomes less helpful.<\/p>\n\n\n\n

      Tips:<\/p>\n\n\n\n