A Checklist for Responsible Growth

I can't imagine why growth in revenue isn't good, as would be growth in your expertise and capabilities. But I think we should be a little more neutral about growth in the size of your firm (as defined by the number of people on the team). It's best to see that growth as bringing a set of implications that are neither good nor bad, but just different.

The main thing about growth is that it should be intentional. You don't want to wake up some day and realize that the marketplace took over and made all kinds of decisions for you. Sure, the marketplace matters, but there's room in that equation for you to be a small firm or a large firm; the choice should be yours.

There are times when I think our 134 lb Great Dane owns us. Frida takes us on walks, gives us a little space we can call our own on the bed, and graciously warns us with thundering hoofs that she's coming through: it's your choice to stand your ground and get pulverized or just step to the side like a non-idiot and let her go after the wild turkey, coyote, deer, or squirrel. You don't want your firm to be that way, where you're really just along for the ride.

In your shoes, here's what I'd ask myself before I accepted or sought growth. I'd keep moving forward as long as I could answer each question with a "yes" and I'd stop and take a deep breath if I honestly had to answer with a "no" at some point. Here they are, in order:

1. Do I have any clients on the roster who have been grandfathered in, either by providing them with a service offering that we don't offer to new clients, or maybe pricing that we haven't offered in years? If the answer is yes, let's think about swapping them out with this new opportunity and clean up the client base first. If no...
2. Are there any existing clients who are still attached to me, the principal? We have tried to wean them off that relationship, nudging them toward one of our very capable account managers, but do they keep calling me when it's not only unnecessary, but a little disruptive, too? If the answer is yes, maybe it's time to be firmer about this and just swap them out. If no...
3. Are there any current clients who fall below our current minimums and haven't been able to grow with us? This is the client whose annual spend is less than 4% of our fee base, and it's also pretty clear that they just don't have the budget to spend what we currently look for in a new client. The starting and the stopping is about the same, no matter how big or small the client is, and so there's a reasonable threshold below which we aren't making as much money. Besides, even the best account managers can't usually manage more than four or five accounts, and, if left unaddressed, this is going to mess with that ratio, too. If not...
4. If we decide to add to our staff, would we feel the pressure to relax our hiring standards or accept a new team member who wasn't an obvious cultural fit? Would we be ignoring our instincts a bit by overlooking something that we heard or experienced directly in the screening process? Or even if that's not the case, would this new hire insist on busting a sensible pay bracket that's going to open a Pandora's box for us with the other team members? If not...
5. Can we fund the costs of the added growth out of our operating cash without using the LOC? And without depleting our cash cushion so that it's less than the number of months we normally want to keep in there? If not...
6. If we go ahead and increase our team's size, can we stay under that 30% YoY magic growth percentage? If we grow faster than that, we may be cash poor, be too impatient about how quickly someone needs to get up to speed, or let the culture do its work of attracting the right people? And even spitting out the wrong ones? Growing at a rate faster than 30% a year isn't a firm line in the sand, but it is a useful boundary. So if not...
7. Am I okay, personally, with a slightly different role at the firm? There will be slightly more financial risk, yes, but I will be "doing" less and "leading" more, and I need time to adapt and to learn. More importantly, I need to embrace what it means to guide a bigger firm. I grew up dreaming about doing this work and not having all these challenging conversations and making all these difficult decisions, so it's definitely a choice I need to be honest with myself about. If that's something I willingly embrace, then...

Let's grow, because now it sounds like a sound decision to do just that!