Growing Pains in Business: Why Your Company Keeps Hitting the Same Ceiling

A custom manufacturer I work with, about a dozen people, had a simple rule for the shared inbox where every customer inquiry landed. If you saw a new request, you left it unread until somebody was actually working on it.

It’s a reasonable rule, and it worked fine until someone opened one of those emails by accident. Outlook marked it read, everyone else assumed it was being handled, and nobody found out otherwise until after the fact. When we went back and counted, they were missing somewhere between 12 and 15 quote requests a month, which by my rough math was a couple hundred thousand dollars a year in opportunities walking right past the front door.

Nobody was lazy and nobody was careless. One of their leads described it about as well as anyone could: “everybody is assuming somebody else is assuming responsibility.” The fix the team kept reaching for was reminding everyone to follow the unread rule more carefully.

That’s what growing pains in business usually look like up close. Not a dramatic failure, just ordinary work that used to take care of itself quietly falling between people.

Prefer listening? Check out this week’s Solo Session where I go even deeper on the topic.

What got you here will get you there

There’s a line every owner hears once the company starts to grow: what got you here won’t get you there. It’s the title of a Marshall Goldsmith book about the habits that hold successful leaders back, and over the years it’s been pulled into just about every conversation about systems and technology.

I get the sentiment, but I somewhat disagree with how it gets applied to owners who are trying to grow their business. In my experience, the work that got you here is the same work that gets you there. There’s just a lot more of it, and that’s the part that breaks.

Growth is more of everything. More transactions, more people, more risk. The core work stays the same, though, assuming you’re not changing your business model or your product lines. A custom manufacturer still has to quote the job, write up the order once it converts, schedule it, buy the material, make it and ship it. That’s true at $1 million a year and it’s true at $100 million a year. What changes is how many times a day all of that happens and how many hands it passes through on the way out the door.

Everyone used to be in the same room

When you’re at a few million in revenue (and depending on the business, that stage can run anywhere from one million up to ten), everybody is more or less in the same room. Everyone hears everything. The owner or a couple of senior leaders can answer any question in the business from start to finish, and because the team is small, nothing really has to be handed off between departments. Everybody is involved in everything.

That isn’t a flaw. At that size, informal is the fastest way to work, and it’s how every company gets started. You hear about owners wearing all the hats because that’s what the early stage requires.

Nobody built it badly. It’s what I’ve called a default system: a series of decisions that each made sense at the time, added together, with nothing harmful about any single one of them. Somebody says we need to track our accounting, so the company starts on QuickBooks. A few years later the conversation becomes maybe we need Sage, maybe we need an ERP. Nobody ever sat down and asked how the business would handle its transactions at the next stage. It grew into the way it works today, which is why “that’s the way we’ve always done it” is usually literally true.

Business growing pains show up in the handoffs

As the company grows, it adds people and transactions, and the work gets split into smaller areas of responsibility. I don’t love calling them silos, because that’s the word for when it’s already gone wrong, but that’s where it heads. The work starts to fall between those areas, and you start hearing the phrases every growing company knows. I thought you were dealing with that. I thought you already took care of that order. I thought somebody called that customer back.

The owner of that custom manufacturer told me, “you’d be amazed even in the 13 or 14 person company how siloed we can get.” That’s thirteen people, so this doesn’t wait until you’re big.

The second thing growth does is expose how much of the business runs on what certain people just know. Small companies tend to have a lot of longevity, with people who’ve grown up alongside the business. Dave just knows, because Dave has been there since the dawn of time. That works right up until you hire Joe, who has never run into that scenario and has no way of knowing what Dave knows. At a lab products manufacturer I work with, a customer service rep explained how she’d learned one of the quirks in order entry: “There’s just no way to know. You just have to know.” She knew because a coworker happened to tell her at one point. (If that sounds familiar, I wrote about capturing that kind of tribal knowledge a few months back.)

You can see it in staffing, too. Back at the custom manufacturer, when one person in production takes a two-week vacation, the lead told me “the workload essentially does double for me when he’s out.”

None of that shows up as a line item. You pay for it in rework, scrap, delays, upset customers and missed expectations, and eventually in the people who get tired of carrying it. An owner I was talking with recently was getting ready to expand into a new region, and he said he couldn’t take the blueprint of his current shop and drop it somewhere new because it just wasn’t ready. My answer was that you can duct tape and Band-Aid it together for a while, but stuff breaks, then people break, and then the business implodes.

Why companies keep hitting the same ceiling

People ask me what size this happens at, and the honest answer is that it has less to do with revenue or headcount than with transaction volume, meaning how many quotes, orders, changes and handoffs the business pushes through in a week.

That said, I see a lot of companies around $10 million a year that bounce around inside a band. Some years they’re at seven, some years eight or nine, and they just can’t seem to break through. The same cycle shows up further down, where a $1 to $3 million company struggles for years to get to five, six or seven. You can’t get to ten before you get to five, and you still have to get through six, seven, eight and nine on the way. Every one of those steps is more of the same work running through the same handoffs.

It can happen at a much bigger number, too. One company I worked with was north of $100 million a year, with its accounting running through QuickBooks and its manufacturing managed through a collection of Excel templates and worksheets. They sold expensive things, so a relatively small number of transactions carried a big top line, and they got to that size essentially by brute force. All of the key operations ran through a handful of people.

Every time they launched a new product line, they got a new spreadsheet, built by the same person who’d built all the others. When somebody else needed to use one, they’d eventually hit a formula or a macro they didn’t understand, and rather than untangle it, they’d build another worksheet. Things slowed down, opportunities got missed and customers got upset, and a company that outgrew its systems a long time ago kept adding more of them.

“If we were ten times bigger, this would go away”

I’ve heard some version of this from a lot of owners. If we were bigger, these problems would take care of themselves, or we’d just throw more bodies at them.

They don’t go away. They get swapped for different problems. Cash flow is a good example. Plenty of smaller companies feel squeezed and figure more revenue would solve it, but a bigger company can have bigger swings, because larger customers often take longer to pay no matter what terms you set with them. Be careful what you wish for, because you might just get it.

When you dig into the root cause, a company under $1 million in revenue and a company over $1 billion are usually wrestling with the same kinds of problems. The billion-dollar company just has to work through three, five, sometimes ten layers of leadership before the message reaches the people doing the work. If you remember the game of telephone (and I’m probably dating myself here), that’s their challenge. The smaller company has fewer layers and more people in the room, but it’s never had to solve for any of this, so it’s building the plane while it’s flying it.

Your growing pains probably aren’t a software problem

If you search for help with any of this, you’ll mostly find software vendors, and they all take the same position. Whatever technology you’re using today is the problem, and if you rip it out and replace it with theirs, your problems will be solved.

Probably not and to illustrate my point: I wouldn’t advise a company doing more than $100 million a year to run its accounting through QuickBooks (but I’ve seen it firsthand). There are real oversight reasons not to, and there are real advantages to a true ERP. But the software will still write the transactions. It may be slower, but it will handle it, and most vendors would rather you didn’t know that.

Go back to the shared inbox. Their tool was Outlook, their process was “leave it unread until someone’s on it,” and when requests got missed, the diagnosis was that people weren’t following the process. That’s the tell of a default system. The fix for a missed handoff becomes a rule people have to remember, inside a tool that was never built to track the work.

What they actually needed was governance. Who owns this inquiry, where is it right now, and what’s still waiting on someone? That’s what a ticketing workflow gives you, and it’s why nearly every company that handles customer requests at any real volume runs one. Email, phone calls, texts… it doesn’t matter what the channel is, because everything funnels into one place where the whole team can see what’s new, what’s in process and who owns it.

What designing it on purpose looked like

The first thing we did was agree on the process. What should happen when an inquiry comes in, who owns it, how does it move from inquiry to quote, and what does everyone need to be able to see? That’s planning, people and process, in that order, before anyone touched a tool.

Then the tool came in to support the process. They needed some kind of ticketing solution, and they were already using HubSpot in another part of the business, so a few people already knew it. Expanding into its ticketing made more sense than buying something new that would have to talk to everything else. This isn’t about HubSpot, either. Plenty of tools can do the same job. The point is that the tool was chosen to fit a design, and the design was built for the business they’re trying to become, not just the one they are today.

Before, as one of their leads put it, finding a request meant you’d “scroll back through three months of emails and hope that you flagged it.” About four inquiries slipped through during the month they cut over. None have been missed since.

Fixing the front end also surfaced the next problem, which is exactly what should happen. There’s still a rough handoff between an opportunity converting into an order and that order getting launched into production, and that’s what we’re working on now. That’s the continuous improvement loop. When the same problem keeps coming back under a new name, you solved a symptom. When a different problem shows up that was sitting behind the first one all along, the system is doing its job.

A system designed this way doesn’t care whether they’re handling a hundred inquiries a day or ten thousand. The people and the volume change, but the view, the visibility and the workflow stay the same. You still keep an eye on how the work flows and adjust when something else in the business changes, but you’re not redesigning it every time you grow.

How to work through growing pains: crawl, walk, run

Every company’s version of this looks a little different, but here’s where I’d start.

Crawl: trace one thing that got missed. Pick the last quote, order or customer complaint that slipped through, and trace where it sat from the minute it came in until somebody noticed it had been missed. Mark every place it moved only because someone remembered, asked or walked over to a desk. Do the same for every rule people are supposed to follow inside a tool that doesn’t actually track it, like an unread flag. That list is your default system, on paper, in your own business.

Walk: compare the default to a design. Take the most expensive mark on that list and decide how it should work on purpose. Who owns it, where does it live, and how does everyone see what’s new, what’s in process and what’s waiting? Get the people who do the work in the room and agree on the process before anyone shops for anything.

Run: decide whether your current tool can carry it. Ask whether the technology you already have can support that design at the next stage, and the one after that. Often it can, the way HubSpot was already sitting in that business. It’s also okay if the answer is no. Then you select, configure and implement something new, knowing exactly what it has to do.

Final Thoughts

The work that got you here is the work that will get you there. You’ll still quote, schedule, buy, make and ship, just a lot more of it. What has to change is where that work lives, and right now it’s probably living in people’s heads, on sticky notes and in spreadsheets that one person understands.

I’d bet you already have systems in your business, and I’d bet just as confidently that most of them were grown into by default rather than designed with any real intention. Growing pains are what that feels like from the inside. Get the work out of people’s heads and into systems, and the ceiling starts to move.

That’s it for today.

See you all again next week!

Dave