High growth is undoubtedly a positive for most companies, but it does bring with it some potential downfalls. Rapid growth puts a strain on companies in a number of ways.

From the European Financial Review—

Growth means change. Growth inevitably stresses people, processes and controls. Without appropriate preparations, growth can outstrip management capabilities, financial controls and quality controls. Rapid growth also can dilute culture, brand and customer value propositions.

Essentially, rapid growth isn’t something to rush into without thinking about it seriously beforehand, and planning it all out. In some cases, rapid growth can have a negative effect on the entire brand.

Toyota, for example, has long been known for the quality of its vehicles, but in recent years a series of recalls has dented Toyota’s quality armor. According to the European Financial Review, Toyota instituted changes in an effort to become the world leader in vehicle sales—quantity, not quality. Those changes affected quality, and led to recalls.

The same for Starbucks, according to the European Financial Review. In an effort to expand, Starbucks put branches everywhere.

…[Starbucks,] who in order to meet unrealistic growth goals opened stores in subprime locations, cannibalized existing stores and made operational changes that diluted the customer experience. Starbucks admitted its wounds were self-inflicted and led to the commoditization of its strategic differentiators.

The Catlin and Cookman Group, corporate growth consultants, put together a list of pitfalls to avoid during high growth. Here are a few:

Not knowing what to expect. Many entrepreneurs admit they should have started earlier on preparing for growth and made “changes like hiring, financing and building infrastructure much sooner.”

Not listening. If company leadership doesn’t listen to its staff or customers, it could lead the company down a negative path.

Not focusing the company. Without focus and a plan for growth, a company will be reactionary instead of proactive. Lack of clarity about direction, priorities, targeted opportunities, expectations and values leads to confusion and lots of wheel spinning without solid results.

Not communicating enough. A company’s vision should be clear to all its employees and also all its customers. This pitfall arises from not making vision and alignment the number one priority of leadership.

One point that’s not on this list is neglecting or underestimating the effect of growth on customer service. During high growth, customer service can slip if a company isn’t on top of it.

For example, slipping customer service can mean not enough call reps in a call center to handle increased call volume. In short, customer relationships may suffer because customer service can’t keep up with the business.

When the European Financial Review looked at companies that did well with rapid growth, it found that many had an organized approach to growth, or an internal enabling growth system that “created an environment that produced high employee engagement resulting in constant improvements to their products, services, business processes and customer value propositions.”

Next up, Automation for Growth…