Exponential Sales, Stair-step Expenses

Growth = Success - that’s the message from investors. Once  the very important hurdles of having a product or service that others want to purchase and having the funding to actually make or provide that product have been met, a company needs to have the organizational capabilities to manage and execute on that growth profitably.  Major operational expenses, such as a new computer system, can be very expensive.  If such decisions are well planned to match the needs of growth, an organization can grow more smoothly without too much disruption.

Sales growth over the years can be steady


Or exponential..


Operational Growth usually comes in steps, as major investments are made.


When the organization makes a big investment, it solves current issues and lays a foundation for growth. For a time, the investment allows the organization to scale as unused features and capabilities are implemented. But if the company is growing significantly, at some point, the investment will no longer be able to keep up with the increased demand. Too much pressure can be put on the existing system of people, processes and tools. So to grow smoothly, new investments, ranging from small to huge, will be needed to  keep the foundation of the organization shored up for future growth.

Foundational investments such as a new ERP computer system can be large and disruptive.  Organizations can delay big operational improvements, but might end up relying upon their people and processes to fill the gaps because of less than adequate tools.  If an organization is able to look out into the future and is able stay even one small step ahead of its needs, operational spending increases can be better planned and implemented to more smoothly navigate through growth.

Have some good stories where an organization did this well (or badly?) - let me know!