The 4 Phases To Becoming A Billion Dollar Business

Desy Papper

Business growth and acceleration have always been important aspects of creating value for any business. Oftentimes, companies pursue these processes through organic means like growing sales teams or accelerating investments in lead generation. Inorganic methods, such as acquiring a business, is another way to pursue growth. However, challenges can arise when integrating […]

Business growth and acceleration have always been important aspects of creating value for any business. Oftentimes, companies pursue these processes through organic means like growing sales teams or accelerating investments in lead generation. Inorganic methods, such as acquiring a business, is another way to pursue growth. However, challenges can arise when integrating businesses, especially one where disciplines and approaches might differ from how the acquired company currently operates.

I recently spoke with Craig Powell, CEO of Motus, who developed a methodology that helps guide entrepreneurs and their teams through each stage of business growth. This methodology focuses on the “ages and stages” that businesses experience as they grow, and outlines associated behaviors and approaches associated with each stage. This is a method Craig has followed for decades to help team members understand the rationality a business follows in each stage of development. His approach also provides a clear roadmap for entrepreneurs to understand the changing nature of their leadership styles, strategic approaches, key operational initiatives and capital planning resources as they scale their business from inception to an enterprise valued at more than $1B. 

You talk about the 4 phases for a company to go from $1 to a billion dollars. Describe how they work.

Each phase is broken down into elements such as the “leadership approach,” “business drivers,” “approximate value” and “capital planning.” As a company moves through phases, you can see how these elements evolve, as well as what should and shouldn’t be happening at the stage you might be in. It’s evident it’s a very different game at each age and stage of company growth, so as leaders move from one phase to the next, this methodology allows them to understand their priorities, as well as the capital resources and markets available to them. 

In each of these phases what is the single biggest mistake CEOs make?

Typically, CEOs fail to recognize the changes that must occur from one phase to the next. Too often, CEOs tend to stick with the strategy that got them to where they are, and they don’t evolve their practices to get to and through the next phases. Even more importantly, they fail to communicate to their team that their organizational behaviors and approaches must also evolve as they approach the end of one phase and enter another. As a result, companies can stagnate inside a particular phase.

This occurs frequently with emerging and founder-run companies. The “Founders Trap” for example, is a well-documented business dilemma that routinely causes companies to stagnate in the $10 – $15M range. Because the founder does not make the evolutionally changes needed to their leadership approach – for example, delegate effectively – the company is dependent on the founder and is unable to evolve the way it operates. 

As Mike Tyson said, “Everybody has a plan until they get punched in the mouth.” What’s an example when you were knocked down and what lesson did you learn?

I have been knocked down numerous times and the most important lesson I’ve learned is to simply get back up. I have a saying in my office: “Fall seven times. Get up eight.” Life and business do not exist without setbacks. Recognizing this reality is important to learning from mistakes, as is checking your ego so you can reflect on them, make adjustments and get back in the game.

It’s also critically important for individuals to own their mistakes and share them – and even celebrate them. A culture where making mistakes is a part of the learning process is critical to creating a highly functioning and rapidly growing organization. It’s not realistic to expect that we won’t make mistakes. When we create this notion that we need to be perfect all the time, we stifle learning and cripple our organization’s ability to evolve. By creating a culture where mistake-making is accepted, lessons are institutionalized and teams are supported to “get back up,” you establish an environment where everyone is empowered to take ownership of their decisions and tackle the next problem with even greater experience and knowledge. 

Bernie Marcus (Founding CEO, The Home Depot) told me how they rode the wave of the ‘back to home movement’. What is the emerging wave CEOs should try to ride over the next three years?

Our world is increasingly a world of mobility. It’s critically important for CEOs to recognize this with respect not only to their products, but also the way they build, develop and manage their teams. Covid has taught us that many businesses can thrive in an environment where all kinds of norms are challenged and, in some instances, reversed. Today’s mobile workforce is as, or arguably more, productive as they were in the office. Enabling mobility among teams challenges organizations to move to a performance-based management approach that ultimately empowers team members to accomplish their goals, while not being stifled by facetime-based management approaches.

Going hand-in-hand with mobility is the movement away from non-core, fixed assets, such as real estate. With effective mobile workforces, CEOs can pursue more flexible cost structures that can scale up and down with the business and market externalities.

What is the one unifying principle of success you have recognized in yourself and others?

Transparency and communication. These two concepts are part of my five core pillars of leadership and have also shaped my perspective on culture development and management. Both are critical in empowering teams to understand where they are, where the organization is headed and how their impact and efforts matter to the organization’s ability to be successful. Too often, we attempt to limit the flow of information, which restricts transparency and communication. Sharing information widely – and celebrating both successes and failures – empowers individuals to have a direct impact on their work and ultimately increases the likelihood of success for the company.

To listen to interview with Craig Powell

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