In The World’s Greatest Banker Fred Gratzon tells the story of how his company outrgrew both his cash supply and his systems to track the growth. His banker finally justified an increase in credit by asking Fred “Do you feel like you’re making money?” When it happened again, the banker encouraged Fred to kite checks. This bought him time to get his systems in order, profit from the growth and take the company public. Fred’s post is an interesting read.
It’s not that I think people who write this kind of stuff actually lie. It’s just that their perspective on what really happened makes better business porn than it makes an example you can actually apply to your situation.
The lesson you can apply is one by Peter Drucker. He said that every time a company grows by 50% its existing systems become unworkable. And that it takes a year and a half to three years to develop new ones. The actual numbers (50%, 3 years) may vary – especially for smaller firms or faster growing ones. But the point is if you have a fast growing company, you need to be working NOW on systems that will support the size that the company will be down the road.
Where do you spend your time?
