There Are Fast Growth Firms, and Then There Are EHGOs

June 2021


By Dan Duffy


Growth at the highest possible level will never come from someone else’s game plan.

 

There are literally thousands of books that have been written about starting, managing, improving, preserving and growing businesses, in all types of organizations. Truly insightful ones, those with original thought, are very rare. Rarer still are works on how to create an exceptionally high growth organization (EHGO). There is a reason this is the case.  

EHGOs come into existence by not following what others have done before them, which makes it challenging to capture the tangible attributes, let alone the ethereal intangible ones, of these organizations within the pages of a book. Having said that, after being part of the leadership team of two EHGOs over the past 20 years, we have observed a few “truths” that are noteworthy. How actionable they are to you and your organization is up to you and your team and your willingness to consider them as you look to your collective future.

 

Exceptionally High Growth Organizations:

See Things Differently. From the onset, EHGOs challenge what was or what is and ask, without considering existing real or perceived constraints, how could we do this or that if there were no constraints.

Have Crazy Attractive Strategic Visions.
The best strategic visions paint a picture of the future that create a positive, “Hell, yes I want to be part of creating that!” emotional response when articulated to stake-holders (employees, customers, partners, etc.)

Understand the Difference Between Strategy and Tactics.  Everyone—and I mean everyone—confuses strategic things and tactical things. Here is a cheat for you. Strategic things address one of two questions: (1) What products or services does our organization offer (or want to offer) and (2) What markets are we
offering our products or services (e.g., geographic, socio econo-mic, specific industries, etc.)?

Periodically Seek to Capture Adjacent Markets through Strategic Extensions. EHGOs examine their core competencies and the market they currently serve, seeking to understand what else their existing customers or clients need or want when they buy your goods or services that are currently being met by other companies or are an unsatisfied (may actually not be known by customer).

Are Very Curious and Embrace Change. This is a tough one because it depends on the culture (more on this below) and most important, the people within the organization. Some people are curious; some people, well, aren’t. The world needs both, but EHGOs tend to have leadership and higher concentrations of cur-ious people that readily and frequently ask “Why is it this way?”, “Is there a better way?” and the one I like most is any sentence that starts with “What if … ?” EHGO team members also are hard-wired from prior positive experiences with change to not fear change (for more on this watch What the BLEEP do we Know!?)

Operate with Intense Focus. EHGOs mute the noise, nay sayers and “can’t be done’ers,” and once a goal is identified and worthy, all the static goes silent and the objective is illuminated as if under a spot light … until the goal is achieved.

Know How and When to Install Organizational Support Systems. Odd as it may seem to support exceptional growth, those organizations with these attributes must simultaneously consider and address the structural needs of the grown enterprise. Seems to be counter to other common traits noted so many times you see EHGOs add operators that are specialized in keeping things running smoothly. Investments in ERP systems, communication platforms, establishing a cadence of KPI reporting, etc., are all required to support a sustainable, profitable and successful EHGO over time.

Manage Their Balance Sheet. This one is pretty obvious: Don’t run out of cash, and maintain at least a year of liquidity. Hard to do when you are just starting, but defer going for EHGO re-sults until you know your balance sheet can handle it (I personally have scars to show you that this is sometimes easier said than done).

Have Powerful Higher Purpose. EHGOs tend to have “worthy cause” that serves as their heart and soul. This is directly tied to everything and without it you are very unlikely to create or sustain an EHGO. Be careful here not to just bandwagon, flavor of the day PC cause it … those fade over time.  EHGOs have deep and meaningful Higher Purposes.

Have Culture of Adventure. If you are seeing a theme here, good. Along with curiosity, seeing things differently, and higher purpose comes great ad-venture! Doing things that no one has done before, or in a way no one has thought to do it, is Magellanian (not a word; but you get it). EHGOs always feel like that are on a grand adventure and enjoy the ride.