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Stalling

There are many things you don’t want to do if you’re piloting a plane. One of the most fundamental is to not go into a stall. This is a sudden reduction in lift, even though the plane is still moving, and the engines are still running. You are however no longer technically ‘flying’. To recover from the stall you need to increase power, or point the aircraft towards earth and pick up speed. Pilots do this routinely and instinctively, always watching out that they are not approaching ‘stall speed.’

Companies take off too


The analogy to business growth is notable. Enterprises initially tend to ‘get airborne’ because of the energy and drive of the Founding team. We talk about startups reaching escape velocity, and taking off. We recognize when an organization is at cruising altitude. And then what? Cruising implies that the desired state has been reached. Time for the crew to take their hands off the controls, flick on the autopilot and enjoy a well-earned break. That’s the danger time, when a stall could be imminent.

Founders put together businesses because they have passion and energy. Most great founders also have a vision about how their offering can change the world. If they are an Edison, Jobs, Disney or Ford, then the world might even agree with them. So in a short time the company takes off and is cruising at a high altitude. It’s known and admired around the world and held up as a great example of innovation. It has disrupted the norm, and set the standards for all that follow.

90% of companies fail to achieve growth


However only 10% of companies sustain growth in the first ten years of their life, so clearly they don’t even manage to stay at cruising altitude. And according to research by Bain & Company, of the 90% of companies which fail to grow, 85% of them report that the problems they encounter are mainly internal. In other words, the crew are enjoying their coffee break, rather than attending to the job of flying the aircraft. Perhaps surprisingly, external events have relatively little influence on successful outcomes. Whatever the weather outside, it’s what is happening in the cockpit which will mainly determine safe arrival at the planned destination. That’s pretty shocking don’t you think? As a passenger (or shareholder), I’m flying with this airline because I expect the crew to devote all of their energies to getting me safely across the Atlantic. Are you telling me that their minds are on other things?
Well, sadly, yes.

Losing momentum


Once the Founder has left a company, very often their energy and drive leaves with them. The new hires and replacements don’t have the same sense of focus, and they get wrapped up in complexifying the business. Weak business planning is further undermined by a general aversion to risk, which in turn means the inability to seize opportunities when they present themselves. For example, think of how that cruising giant, Blockbuster Video, was knocked out of the park by the emerging disrupter, Netflix. And now Netflix is into its second decade, which could mean that it is also dangerously close to stall speed. Companies must keep up momentum. The alternative is unthinkable, but company leaders must nevertheless think it.

When Founders hang up their hats


In much of my work I’m encouraging the energy of startups and new businesses. Often I’m the one calling on them not to take off just yet, until they have a proper flight plan and are fully fueled! Already however I am seeing some of those that have survived their first ten years get close to stall speed. Maybe the Founders have sold out – as planned – and the company is now being run by highly capable, but much less driven individuals. Or maybe the Founders just got that little bit older, and have slowed down, ready to enjoy their inflight coffee. So as a startup specialist, it’s rare that I’m called in for a ten year review of a company, but perhaps I should be! And what’s absolutely certain is that startups and new businesses must always be aware of the dangers of hitting stall speed.

The larger the company, the slower it gets


When it comes to larger businesses and multinationals, the stall speed gets ever-nearer as initiatives become tangled up in process, and aversion to risk. Meanwhile the business plan is less and less focused, as managers attempt to continuously widen the scope of their offering. In fact no company can offer ‘everything to everyone’, and yet because big companies are driven by the need for constant growth, this is what they try and achieve. Of course, the paradox is that the ‘heavier’ the business becomes, the greater the speed it needs to keep moving, but the harder it is to maintain that speed. All kinds of ‘solutions’ and companywide change plans will be attempted, when really there’s one simple and very achievable way of regaining momentum: Return to the mindset of the Founder.
Which means continuing to be driven and entrepreneurial, and never allowing the company to get anywhere near stall speed.

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