Fifty-five-employee Shabby Chic is feeling the turbulence as it pushes ahead with its multiyear growth plan. Ashwell's management team includes a new CEO, CFO, head of stores, planner and buyer—a big change for Ashwell, who prefers informality to formal analysis. The new team has opened three new stores this year and plans to open 10 more next year. "We are going to do this carefully," says Ashwell, adding that of the 45 new stores planned for the next few years, 15 will probably be free-standing stores, 15 lifestyle mall locations and 15 traditional mall locations. Once the company meets its U.S. goals, Ashwell would like to target the Asian, Australian and European markets.
Ashwell is trying to stay true to the company's original branding concept as she makes big decisions, like whether to move the company's Los Angeles-based manufacturing offshore and where new stores should be located. She has also had to make compromises with her team and come to terms with market realities. Ashwell prefers older storefronts, but a Shabby Chic location recently opened in a brand-new mall in Austin, Texas. "Believe me, I had to be educated and talked into that one," she says. "But it's where the traffic is going." The company is a little bit slower to open stores than anticipated, but the growth is already evident. "Even in this first year, [same store] sales [show growth of] 19 percent," she says. "They're pretty damn good."
Those companies that break through the ceiling of growth have to challenge the status quo and innovate continuously, says Rich Laxer, CEO of financial services firm GE Capital Solutions. They must also be good at finding waste and eliminating it—whether it's in terms of finances, production, time or materials. "You can't have steps that don't add value," says Laxer. "It's making sure you have as lean an organization as you possibly can, both in the people you have and in the steps they [take] to deliver the service."
Theresa Welbourne, founder of eePulse, an HR technology and research consulting firm, sees small firms struggling with what to grow first, second and third—whether it's head count, cash, customers or sales. The typical scenario is to focus on product, sales cycle and people (in that order), but the companies that win are the ones that spend more time hiring the right people. "[They're] really built on their core team and they're working on the people, but that's not what most people do," she says.
John Keagy is co-founder and CEO of 6-year-old ServePath, a San Francisco-based managed hosting company with 2,500 customers that is working to go from annual sales of $10 million to sales of $20 million. Its growth strategy is to target more sophisticated customers—namely accomplished Web 2.0 firms and software as a service companies—that have more complex requirements, but Keagy needs to build the 100-employee company's middle management layer to spur this growth. "Ten people can't fill out this whole company anymore," he says. "We need to teach the executives we've got now how to build executives that report to them."
Keagy is trying to keep the company's hiring costs in line with recurring revenue, which he expects to grow 60 percent a year. "I hope that our head count doesn't grow quite as fast," says Keagy, 40. "If our head count grows 40 percent and our revenue grows 60 percent, that's probably about right."
To grow, you'll have to balance your company's short- and long-term thinking, creating time and budgets that are focused on the future while also fighting today's fires. "You have to have both points of view," Greiner says. "You have to be short-term oriented to solve problems and get performance; you have to be long-term minded about where you're going."