Within several years of launching Worldwide Clinical Research in 2001, Geiger found herself hip-deep in the consequences of rapid growth. She had fulfilled a dream of getting her clinical research company up and running. She had created two dozen jobs. But for the company to realize its full potential, she decided last year that she needed someone who would, in her words, “have my back.”
She sold Worldwide to a venture capital-backed outfit and is now signing the back of a paycheck, rather than the front, as executive vice president of Clinipace Worldwide. Her experience dovetails neatly with research that shows high-growth entrepreneurial ventures start develop wrenching new organizational challenges once annual revenues pass a threshold of a few million dollars—particularly when that point is reached on a short arc.
Rapid growth has a way of redefining not only the direction and structure of a company, but determining whether it will even continue in its initial model. In the following pages, you’ll be reading about some companies that have successfully reined in that growth. They stand as some of the Kansas City region’s best examples of small companies, no more than 100 strong in payroll, who punch well above their weight in terms of revenues per employee and overall growth.
The performance of such high-growth companies is more than just a tribute to their top executives’ abilities, say specialists in entrepreneurship. Those achievements are often overlooked in the national debate over the best way to kick-start economic growth and job creation.
According to the Kauffman Foundation, small business in general is incorrectly credited with being the driver of job creation. As the foundation’s Robert Litan says, the real credit lies within a subset of small businesses. Rapid-growth companies, he says, are the true engines of job creation.
The foundation’s research has determined that, in any given year, 40 percent of new job creation comes from just 1 percent of companies, which it dubs “gazelles.” An even smaller subset of young gazelles (again, less than 1 percent of the total number of businesses), yielded 10 percent of the new jobs.
That, says the foundation, is why discussions of job creation should be reframed. Rather than focus on the need to promote entrepreneurship generally, they instead should promote high-growth entrepreneurship as the nation’s best hope for shaking its economic doldrums. Doing so, in large part, would come from removing the barriers to creation of high-growth companies, rethinking traditional approaches to taxation, regulation and immigration, improving access to capital, and putting more attention on commercialization of innovative products and services.
A Defining Difference
The traits of successful business owners are well-known, the stuff of business schools and executive MBA programs—attributes like vision, goal-setting, communications skills and ability to inspire a staff are but a few. There is, however, one fundamental and defining difference, says Rockhurst University’s Dan Jensen, between the average small business owner who’s making a good living and the executives who can harness rapid growth and turn it into long-term success: The ability to transition into new and varied leadership roles.
“If that doesn’t occur, what generally happens is that entrepreneurs who are not going to make it will put artificial caps on their growth, and usually, these involve control issues,” said Jensen, director of professional development at Rockhurst’s Helzberg School of Management. “They create what we would term a lifestyle business, rather than a true entrepreneurial venture.”
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