Leaders of mid-sized service firms with 25-100 staff often tell me that they want to grow their business. Yet, year-after-year, most mid-sized service firms actually grow very little. What do I mean by growth? This is about meaningful increases in revenue, EBITDA, client acquisition, geographic expansion, new service lines and even, for some firms, headcount. Meaningful growth is usually measured in percentages, where revenue, for instance, increases by 10%-20% annually rather than merely 3%-7%. 

I’ve completed an analysis of the growth arc of more than 70 mid-sized service firms I’ve coached. A handful of these firms broke through to their next level, being acquired or transitioning ownership internally. These stakeholders did very well. The other organizations were okay, but they didn’t break through. They had growth spurts here and there, but not sustained growth year-over-year. What accounts for the differences? This is 100% a result of their leadership operating model. Break-through organizations avoided these seven growth-killing mistakes. Here is an opportunity to learn what not to do if you want to consistently grow year after year.

1. Leaders work more in the business than on the business.
2. Leaders don’t set specific growth goals or champion a BHAG.
3. Leaders aren’t aligned, at a gut level, about the future.
4. Leaders delay important but complex decisions.
5. Annual strategic planning doesn’t produce desired results.
6. Behavioral problems don’t get identified or addressed fast enough.
7. One primary “accountability partner” is simply overwhelmed.

Leaders Work More In, Than On, The Business

Working in the business is about serving clients, ensuring scopes of services are fulfilled, departments have the resources they need to operate, invoices get sent and payments are received and cash-flows are healthy and on and on and on. This is important work and it needs to get done. But it won’t grow a business. I call this a “maintain the bus” mindset.

Working on the business is about identifying those strategic initiatives that are most likely to stimulate growth and then executing against them. This is about carving out time, energy and focus for 100% growth initiatives. I call this a “drive the bus” mindset. If you want to foster growth, you must work on the business as much or more as in the business.

Leaders Don’t Set Specific Growth Goals Or Champion A BHAG

While leaders of both break-though and non-break-through companies talk about growth, there are substantial differences in the how they talk about it:

• Break-through companies identify specific and measurable growth goals. Usually, they articulate a BHAG—Big Hairy Audacious Goal.
• Leaders of non-break-through companies talk generally about growth but rarely put forward quantifiable numbers.
• Break-through leaders champion the BHAG to the entire organization, everyone from the front-desk receptionist to the CEO. Everyone has clarity about the big goal.
• Leaders from non-break-through firms talk about growth amongst themselves and are usually reticent to put forward specific targets for fear that if they don’t hit them, they’ll be seen as ineffective by their employees.

Leaders Aren’t Aligned About The Future

Leaders from break-through firms achieve rock-solid alignment between them about the future: where they are going, the BHAG, the strategies they’ll need to engage in and what this means for stakeholders. They hammer out this agreement including exit timelines for people of differing ages. Everyone mutually commits to the goal, which gives them resolve.

Leaders from non-break-though companies lack resolve. They have no clarity and agreement about a BHAG, strategies, payouts to stakeholders and differing timelines for people of different ages. This lack of alignment means they often pull in slightly different directions on some very important topics on a day-to-day basis. Over time, this creates serious drag that prevents forward momentum.

Leaders Delay Important But Complex Decisions 

Every firm I’ve coached has had to make important, but often time-consuming, decisions. These decisions require a lot of deliberation and usually individual research time from leaders who then report on their findings and make recommendations. Leaders from break-through organizations I’ve coached have a formal and healthy decision-making process that consistently produces great decisions on a timely basis.

Leaders of non-break-through companies often have no formal decision-making process. But more than anything, often because of a lack of trust between leaders, they avoid these decisions. They put them off until the window of opportunity closes or until it becomes too painful not to make a decision. This will stymie growth—guaranteed.

Annual Strategic Planning Doesn’t Produce Desired Results

Strategic planning is a challenge for every mid-size service firm I’ve coached. But the break-through organizations prioritize it and get better at it every year. Many of the firms I’ve coached have scrapped annual strategic planning exercises in exchange for Collective Objectives. This means they consistently achieve the goals that matter, year after year. This gives their leadership teams real swagger.

Non-break-through organizations tend to stay on a self-deluded hamster wheel. They get together and talk about priorities. Each leader signs up to own a priority. They work on these individually in their spare time (yeah right—who has spare time)? At the end of the year, they report how much they’ve learned about how much better positioned they are to achieve the goal this coming year. Rinse and repeat. Year after year.

Behavioral Problems Don’t Get Identified Or Addressed Fast Enough

Every service firm I’ve coached has encountered behavioral problems, usually from internal staff but sometimes from clients or partners. Leaders from break-through organizations quickly identify these problems, identify a solution and then execute it. This sends a message to staff—we won’t allow behavioral problems to hurt you or derail our growth. This causes staff to want to work even harder for these leaders whom they trust and admire.

Non-break-through leaders often do the opposite. They don’t keep their ear to the ground for behavioral problems and are often the last to hear about them. When they do hear, they are often slow to investigate and respond. This sends a horrible message to staff who then engage more in water cooler talk than in productive work. Growth then stalls.

One Primary “Accountability Partner” Simply Gets Overwhelmed

Most leaders at service firms act as an accountability partner to each other and to people who directly report to them. But break-through companies leverage their values across their entire organization so they permeate actions, attitudes and mindsets. This means their values serve as the voice of accountability, not a single person or two.

Non-break-through companies experience almost the opposite. In many of these firms, a single person or two at the top serves as accountability partners to everyone in the firm. This is an overwhelming task and it leaves these leaders with almost no time or energy for strategic growth initiatives, which in turn, stymies growth.

Next Steps

I’ve written an eBook that diagnoses numerous root-causes of growth stall-outs for mid-sized service firms. The ideas I’ve put forward in this article are just the beginning of what you’ll find in the eBook. Which ideas are applicable to your firm? The only way to know this is to register, read and then see for yourself. If you liked the ideas in the article, you’ll love the eBook.

About The Author

Randy Shattuck is a seasoned entrepreneur who works hand-in-hand with senior leaders of mid-size professional service firms to grow revenues, acquire clients, open new markets, increase profits and effectively position their brands.