• Donald Davis

The Organizational Growth Ceiling

It is exciting to see the levels of innovation within a company that is growing. The one challenge that awaits most organizations is the level of capabilities in the business that provide leveragable structure. The toughest part is that most businesses will encounter this limitation before being able to react to it.

I have a recent client who has been trying to figure out how to rapidly grow his organization to meet the needs of the market. His biggest challenge is that he personally invested in being ready on the innovation and key product side of his business while not paying attention to developing organizational capabilities. The product that this client is trying to grow is absolutely brilliant and will be extremely impactful to patients once it is fully released. The challenge that he was facing is illustrated below in the line graph. The blue line in the very center represents time and what all of us need to have happen as we grow an organization, balance between Innovation Capacity and Business Capability. Invest too heavily in business capabilities and innovation can slow or stop (represented by the gray dashed line). Invest too heavily in innovation while not paying attention to business capabilities and the result will be what my client has (represented by the orange dashed line).

As a company continues to innovate and build their product the business capabilities (team management, leadership, KPI’s and operational standards) often do not grow at the same rate as product innovation. When this happens the organization will eventually hit a growth ceiling and will not be able to expand beyond this ceiling until some of the deficiencies are corrected. One way to visualize this would be to draw a graph like the one below where you have to balance Innovative Capacity with Business Capabilities. Too much on the innovative side and every situation becomes a unique problem without standards to solve. Secondly, if you have too much focus on business capability it will slow down innovation and might impact the company’s ability to continue to develop creative solutions. Businesses have to find a balance between innovation capacity and business capabilities to ensure that they stay nimble but also are able to scale.

After 30 years of seeing similar challenges I was able to help him quickly agree to utilize some of the tools available through 5280 Life Sciences to better assess the greatest opportunity for developing a recovery plan. Using our Scaling Factors assessment we were able to best understand the current challenges and develop an initial plan for growing the organization.

If your organization is having similar challenges you can take the initial assessment to better understand what is happening. The assessment is free and can be found here: Scaling Factors Assessment

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