Navigating Growth Through an Inflection Point
By: 
We recently worked on a project that required the integration of two $30M companies. Both had grown to this size in a short period of time and had systems that supported their individual sizes relatively well. When the two were combined, they pushed across an inflection point. An inflections point is when a company’s systems, business processes and organization structure are struggling to support the size of the company and are incapable of supporting future growth to the next inflection point. These typically happen every time a company doubles in size. As companies grow, their needs and operating style change as shown in the table below:
| Annual Sales Volume | Typical Structure | ||
|
| Organization | Systems | Business Processes |
| $10M |
|
|
|
| $25M |
|
|
|
| $50M |
|
|
|
| $100M |
|
|
|
| $250M |
|
|
|
| $500M+ |
|
|
|
The challenge of inflection points is that it takes time for leadership teams to see that they are at one. The symptoms can consist of:
- Weakening financial performance
- Lack of strategic alignment on moving toward the next inflection point
- Skill set gaps
- Operational issues
- Technology gaps
- Cultural and communication issues
These issues creep up on leadership teams slowly. Leadership teams need to understand the basic premise that when they reach an inflection point, they need to decide if they are going to transform themselves into a structure that will allow them to double again.
I have defined inflection points as revenue levels which are a rule of thumb and closely fits with every company we have 
worked with. When a company hits an inflection point, the leadership team needs to reevaluate their strategies for the business. If the company has a goal to double in size, it then needs to make decisions about the organization structure and the ability of the organization and the people in it to make doubling in size happen. The same decisions need to be made for technology and business processes. The focus needs to be at the intersection of people, process and technology.
When we work with companies who are at an inflection point, we start with the strategic plan and then define strategic and operating gaps in the business that will need to be remedied. The roadmap to doubling in size is a transformation of the business that will insure its’ strategic success.
If you want to find out more about what to do when you hit an inflection point wall, or if you think you are at one, drop us a line at info@group50.com, call us at +1 (909) 949-9083, or request more information here.
About the Author: Jim Gitney is the founder and CEO of Group50 Consulting: Strategy, operations and supply chain subject matter experts. Group50’s business is primarily in middle market manufacturing and distribution, where hitting an inflection point can be a tough experience. Group50 has worked with many companies that have hit an inflection point wall.
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