Preparing your organization for growth

Companies that address their organizational weaknesses as they implement growth strategies give themselves an advantage.

McKinsey Q, May 2011

Most senior managers pay close attention to the strategic side of growth—the “wheres,” “whens,” and “hows.” Yet many underestimate the importance of organizational factors in translating a growth strategy into reality. This oversight can dampen a company’s growth plans: organizational processes and structures that are well suited to today’s challenges may well buckle under the strain of new demands or make it impossible to meet them. Likewise, key employees may lack the skills needed to cope with the additional complexity that growth brings. This article seeks to illustrate such “pain points” and suggests some approaches for coping with them.

1. Stifling structures

Well-defined organizational structures establish the roles and norms that enable large companies to get things done. Therefore, when growth plans call for doing things that are entirely new—say, expanding into new geographies or adding products—it’s well worth the leadership’s time to examine existing organizational structures to see if they’re flexible enough to support the new initiatives. Sometimes they won’t be.

2. Unscalable processes

Business processes are another area that companies often overlook, to their detriment, when they are growing. It’s important for a company to determine which processes will come under particular stress when it grows.

3. Unprepared people

Growth naturally creates new interactions and processes, expected and unexpected, and often at a fast pace. To manage them, the employees who face the greatest complexity—for example, those in functions or businesses that will see increased activity—must have “ambidextrous” capabilities. These enable people to take initiative beyond the confines of their jobs, to cooperate and build linkages across the organization, and to complete many tasks in parallel.

Companies sometimes forget to think about these capabilities in the units immediately involved in growth and very often don’t do so beyond them.

The specific organizational challenges companies face as they grow will differ according to their growth strategies. By managing organizational complexity early, however, any company can improve the odds that its growth plans will succeed—while making it less difficult than ever to get things done.

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