Your business won’t succeed without a roadmap. Here’s how to find the path forward.
Frustrated? Overworked? Slow business growth? Welcome the Second Wall, the biggest barrier to sustainable, profitable growth.
The year is 1813, and in the colony of New South Wales, drought and insect plagues have forced colonists to think about the possibility of fertile land beyond the seemingly impenetrable maze of sandstone bluffs and deep gorges that formed the Blue Mountains. Explorers Blaxland, Wentworth, and Lawson set out from Emu Plains with the help of a guide familiar with routes used by local Indigenous peoples.
They crossed the mountains in three weeks, a feat that is now well-known in the history of the European settlement of Australia. The key was following the Indigenous pathways that traversed the ridgelines rather than finding a route via one of the many valleys. The valleys were dead ends. After battling through the forest and fording rivers, each prospect would have left them exhausted and facing a sheer cliff, a dead end with no option but to turn back.
The lesson here is that without knowing the landscape, any attempt would ultimately be futile. For business owners, founders, and CEOs or Directors, there is a fitting parallel. You want to forge a path that leads to a mature, successful business. Working with hundreds of businesses worldwide and observing that all businesses have a natural lifecycle going through clearly identifiable growth stages, has led to the development of the Business Cycle Model (BCM).
The BCM is your map, compass, and local knowledge. It helps you navigate the barriers, hurdles, and pitfalls that accompany a growing business. It helps you to know where you are in the growth cycle and what to do to move from one stage to the next. The key is recognising not periods or financial returns but the “behaviours” and “feelings” within the business. This counterintuitive indicator is universal across industries and businesses. Like a compass in the hands of an expert navigator, these feelings are a remarkably accurate indicator of precisely where the business lies on this timeline.
Early growth meets the wall
Let’s start with the early days. First, you experience an initial phase of success; your excitement is high as you take a leap and dive into building your dream. From small beginnings, you’re encouraged and excited as you see evidence of the business progressing. This start-up phase is a bit of a whirlwind, and looking back on where you started, you can see things moving. You can see the early dawn of winning clients, gaining a reputation, and establishing cash flow, but you need to make investments to grow. This is the first wall, an early hurdle where your graft needs to convert to revenue to survive. Your confidence is high, so you back yourself to grow.
Things are not rosy just yet. That investment made means you likely are seeing the fruits of more clients and revenue, but you are stretched. Financially, the business is almost or just breaking even, so the hard graft continues because now you have more overheads. You need to keep the business ticking over. Your hard work leads to steady growth, and the business takes off. The company is doing well, turnover is growing, and you begin to feel good about how well everything is going.
This is a crucial stage where founders or owners start to feel a bit more relaxed – the business is making money – and they allow themselves to start thinking about their own rewards. Perhaps you move to a new house, buy a second home, a new car or boat – you deserve it after all. The problem is the good times don’t always last.
Hitting the Second Wall
Welcome to the second wall. You’ve made the investments, taken the risks, and put in an extraordinary number of hours to get the business off the ground and making money. Now you have a second set of problems: it’s too big for you. You have built a bigger business to accommodate the revenue, but you don’t have the infrastructure, processes, or key people to manage it properly. At this point, your feelings can best be described as frustration, stress, and if left unchecked, eventually lead to disillusionment. This is synonymous with the accelerated growth phase. This phase is crucial. Getting through the wall will take the business forward. Getting lost in the valleys will lead to the business plateauing or declining.
Your business environment has changed, and so too have the tools you need to get past the second wall. There are more people, more problems, more complexity, and potentially, less structure and a lack of a defined culture. Moving past the second wall requires an investment of a different kind: infrastructure and skills. This is where the fundamentals of the business all need to be examined to determine where you need to invest.
Moving past the Second Wall
The capabilities and skills needed to shift through the second wall can be planned into the business as you accelerate up that growth curve, so it’s more of a speed bump than a head-on collision. However, as you grow and accelerate up the curve, you need to get above and ahead of the business to assess the four primary practices you are responsible for: strategy, execution, culture, and structure.
To those, we can add secondary practices, such as innovation or leadership. These four key areas, plus two secondary domains, are what will guide you past the second wall. The problem is that in the good times, we are busy with the content of the business, attracting clients, developing products and services, and growing revenue. It’s fun and rewarding, but now that business has grown, we’re putting out fires and solving problems.
At some point along the ride, during the good times, it was time to step back and check the map. Going through each wall is inevitable. There are growing pains that accompany any human endeavour. You can’t avoid them, but returning to our navigation metaphor, you can see them coming, prepare, and overcome them. Listen and observe the behaviours and feelings in the business to understand its position on the BCM. Recognise the areas of concern and invest in the appropriate capabilities and skills. Doing this means moving past the second wall and into the maturity phase, where you start to feel more content.
Most business owners simply say they feel enormously proud at this point. It is the feeling of emerging from the trees and seeing the vast landscape disappear over the horizon, knowing you’ve found a path to the future.
