Tag Archives: infancy

The Second Sea Change

As the organization moves from Startup to Go-Go, the second sea change occurs. The Startup always struggles with revenue. “Please find a customer to buy my product or service.” And, these first sales don’t even have to be profitable sales, because all the expenses go on a credit card, line of credit, whatever it takes to get the organization out of ground zero.

Every sale for the Startup is a one-off, tweaking the product or service to each individual customer. Those Startups that survive (make enough sales) find that as volume increases, they can no longer treat every sale from scratch, they must institute methods and processes. The struggle shifts from a revenue problem to a profit problem. The shear volume of the successful Startup becomes its biggest problem. A few unprofitable sales for the Startup becomes a staggering amount of red-ink for Go-Go.

And, profit becomes elusive.

The first sea change was a shift from organizing the work around the people to organizing the people around the work. The second sea change is a shift from organizing the work around methods and processes to organizing methods and processes into a system. It is only this second sea change where the organization begins to see its first signs of sustained profitability.

The Organization Has to Become Profitable

WHY I wrote Outbound Air

Organizations moving to the next level, have solved the problems of the past, but solving those problems created the new problems of the future.

In the stage of infancy, everyone did a little bit of everything, but market demand required more volume, so headcount increased. With more headcount doing a little bit of everything, chaos increased and worked against the higher volume. It was great to have all hands on-deck, but the chaos wreaked havoc on efficiency. Sure, the product was delivered to the market, customers were satisfied, but in the wake, were body bags and organizational friction. These were the hallmarks of the Go-Go stage.

In the stage of infancy, efficiency was not an issue, because the point was “proof of concept.” Make the product or service, and (please) find a customer to buy. The sale did not have to be a profitable sale because the expense was pushed to a line of credit. But, at some point, the bank actually wants the line of credit paid off (primarily, so they can take it away, but that’s another story for another day).

At some point, the organization has to become profitable, it has to become efficient.