GURUS OF GROWTH.
BORU CORP. THINKS IT HAS THE ANSWERS TO COMPANIES' GROWING PAINS AND AIMS TO SPREAD THE WORD
Fischer founded Boru Corp. in January 1999, and at first focused on R&D, investigating and modeling the phenomena of corporate growth via indepth interviews with the brains behind 150 booming Front Range companies.
Now Fischer and his diverse troop of nine employees, or "Boruvians," are gunning to take their message to the masses. In the process, they hope to practice what they preach by -- surprise! -- optimizing their own projected growth.
"Out of our research, two major things came out: Companies don't know how to grow; they don't know how to model their growth. No. 2, they don't understand how to get the company to be a learning business," Fischer said from Boru headquarters, which was designed as a prototype for the office of a growing company.
The high-growth companies Boru researched "weren't learning quick enough. They weren't getting the feedback from the customer or the marketplace. They were maybe repeating the same mistakes. The knowledge learned from one thing wasn't being transferred over to another sector of the company, so the left hand didn't know what the right hand was doing."
Statistics suggest navigating growth without a map is a fool's errand. According to the national Chamber of Commerce, some 250,000 new businesses are started in the United States every year. Only 10,000 remain in business long enough to celebrate their 10th birthday. In Fischer's eyes, the concept of "business as a machine" no longer holds water. The more relevant model for the workplace of the 21st century, where brainpower has replaced physical assets as the key corporate commodity, is "business as an organism." A key tenet of this philosophy, said Fischer, is that "the way the organization operates is different at every level of growth." The ability to learn and adapt, as in nature, is paramount to survival.
"There's a dynamic that's very similar in nature that happens in an organization that's growing very rapidly," Fischer explained, "And there are rules, clear rules, of the road. When the level of complexity grows, then (unprepared companies) start running into a lot of very serious issues." These issues include ill-defined delegation systems, high turnover, lack of departmental co-ordination, cultural conflicts -- in other words, utter mayhem. To help ward off these troubles, Boru has developed a model of the "Seven Stages of Growth" that provides a road map for growing companies with one to 400 employees.
"The key element in measuring growth or modeling growth is complexity," Fischer said. "That's what gets people, that's what takes them down -- the complexity overwhelms them. What a lot of companies do is they get overwhelmed with the complexity, and they think, 'We're overwhelmed with work; we've got to get more staff.' So they throw people at the problem, which is the wrong thing to do."
The right thing to do? Put together an appropriate blend of systems and people. Explained Fischer: "It's a very delicate balance, because if you try to over-systematize your company, it'll blow up on you. If you try to put in too many people and not enough systems, it'll blow up on you. If you don't have the professional management ... the people on board aren't going to be able to set up professional systems because they've never done it before."
Companies on the fast track, Fischer added, should look to get a human resources person as one of their first 10 employees. Businesses tend to "get an HR person after they get (behind on) HR issues and they need to get someone to come in and help them out. That's nuts."
Fischer ultimately sees his company as an educator. "Our basic underlying premise is, we're in the business of bridging the gap between growth business and learning enterprise," explained Fischer. To this end, Boru is in the process of raising $2.5 million to launch a comprehensive "emerging growth corporate university" that will deliver Boru's proprietary educational content to companies via seminars, books and the Internet.
As for applying Boru's growth models to his own company Fischer explained, "I have purposely held it in Stage One (10 employees or less) until we're absolutely ready to go to Stage Two (11 to 21 employees)." The company took a step backward last year, cutting back from nine employees to five as a move toward cultural homogeneity a necessity said Fischer, for a small business. "We went down the wrong road for our product or service, and we had to back up," he explained. "I realized it, and I said, 'OK, that's not where I want to go.'"
In the longer term, Fischer has projected lofty revenue growth for the company, to the tune of $28 million by 2003, a 2,300% increase over this year's expected $1.2 million. By next March, Fischer said that he expects to be at the center of a 35-employee organization. The basis for this projection? The company is gunning to grab a chunk of the estimated $175 billion international training market and deliver customized growth universities to clients via the Internet. Born also plans to publish a book, Navigating the Growth Curve, co-authored by Fischer, and he will continue to consult on growth-related issues. In other words, the company wants to brand itself as the guru of growth, spread the word and make a tidy profit.
Fischer said that some conservative executives have dismissed Boru's services as New Age smoke and mirrors -- his interpretation is that they were unwilling to accept change -- but the company's clients readily sing it praises.
"You've got to acknowledge (the chaos of growth) and try to stay ahead of it," said Laurie Taylor, president of Boulder tech marketing firm Leopard Communications Inc., which has steadily grown at a 20 percent to 30 percent annual clip since it was founded in 1985. "(Boru) puts in place milestones ... that allow all of your employees to learn and grow on a consistent basis. They bring their philosophy to all of your employees."
"We're at that stage of growth where we can't just plan one year in advance," Taylor added. "It's probably the situation where the risk of not seeing the bigger picture could impact us too little, too late."
Another Born project is fleshing out Sashco University a three-day course about culture and growth for the 75 employees of 64-year-old Sashco Sealants Inc. of Brighton, part of a mission to create sustainable annual revenue growth of 20 percent. "They were able to think critically about what was happening with our culture," said Les Burch, Sashco president. "It puts out the notion of different stages of growth. There's different changes in each stage, and there's pain associated with growth, too."
In Boru's collective consciousness, there's no better remedy for corporate growing pains than understanding your. own company's culture and values. "When you get into these chaos zones (a well-defined corporate culture and value system) basically helps you get through gracefully" said Fischer. "If you don't have a value system intact, then it's like, 'Good luck.'"
BORU'S RX FOR TWO COMPANIES STRUGGLING TO GROW
CASE STUDY #1
A KNOWLEDGE MANAGEMENT COMPANY IN CALIFORNIA
Armed with "significant venture capital funding," this company started out with a staff of 12 people. "They built their organization like it was out of a textbook," said Fischer. "They attracted quality people with high salaries and big stock options." However, management failed to develop a workable infrastructure as the company grew to 92 employees in six months.
"The recurring theme in that situation," said Fischer, "is that people felt like they were just a cog in the wheel. There was no direction, there was no infrastructure, there was no understanding of the values the company. They didn't feel they belonged to anything other than something that was going to be a great stock option." As a result, turnover skyrocketed. "They did a total 200 percent changeover on their software development team," remarked Fischer. "How do you make anything work when you grow a company like that?"
In Fischer's opinion, this company missed the point from day one. "Only one out of five elements (in staff satisfaction) is the compensation element," he said. "You have to build a community where there's camaraderie. You have to build a performance-based system...so that people can know what they can earn when they go beyond what's expected of them. Four, they have to be constantly earning. Five, they're spending so much time in this place, its got to have some meaning in their life. If you only address the first tier -- which is money -- in an organization that's growing that quickly and it's getting complex that quickly, you're not going to be able to hold people."
CASE STUDY #2
A SOFTWARE COMPANY IN BOULDER
After this company had grown to 30 employees, the problem revolved around delegation, or the lack thereof "Because (the owner) was so hurt by peopIe leaving, he stopped believing in people and started looking at them as pieces in the machine," said Fischer. "So people weren't accessed for their intelligence, for their ideas. They weren't necessarily respected openly or acknowledged for their great contribution: (The owner) almost put himself out of business.
"He didn't see the incredible resource he had with his staff," observed Fischer. "As a result, he was always pushing his staff away. Because he couldn't let go, he couldn't delegate, he didn't trust people." The moral of the story? Don't try to do it all by, yourself, because you'll end up wasting the talents of your employees and driving them all away.
Source: Boru Corporation Research, 1999-2000
ADVICE: MICHAEL DEVERY
As manager of Silicon Valley Bank's Colorado branch, Michael Devery is no stranger to corporate growth. The biggest local constraint, he said, is record low unemployment, "Lately, the biggest problem is companies expect to grow at a certain growth rate and can't find employees," he said. "The ramp-up is hindered by it."
Devery pointed out another pitfall: "(Companies) grow too fast, and a lot of the money they raise from venture capitalists they're told to put it to work. They might spend it in vain. To get the cart in front of the horse and spend a lot of money on marketing and advertising before there is market demand. It's risky proposition. If you have a shift in the market place, you might run into the wall at 100 miles per hour."
Devery's recommendations for growing start-ups: outsource as much as possible, create a comfortable workplace ("whether it's just allowing your dog to come to work or free food") and maintain a respectable level of liquidity. Once market demand comes around, "step on the gas pedal, and start spending those dollars on sales and marketing."
Boru's east Boulder office is a reflection of the philosophy that environment is a key to healthy growth. The humdrum industrial park exterior sheaths an unexpected interior Centered around a percolating copper fountain, employees work at desks designed in accordance with the Golden Mean: 70 percent of the space is public, 30 percent is private. Employees might place a sign on their desk reading "In Focus Zone" or "Latte Moment" to connote their mindest. Air purifiers cleanse, nature CDs spin, and the radiation and electoromagnetic levels are low, all in the name of minimizing stress and maximizing productivity.
ADVICE: ROBERT AGLAR
How do you follow up a prolific career in real estate? If you're Robert Aglar, distric manager for the Colorado branch of the service Corps of Retired Executives (SCORE), the answer is to pass on your knowledge to the next generation of entrepreneurs.
Aglar's advice for growing businesses:
* Get the right people. "If General Motors has two bad people, it doesn't matter all that much," he said. "If a company of 10 people has two bad apples, it's a disaster." Hiring the right people starts with the interview, but to rehash someone's resume, Aglar noted, is "a total waste of time." More pertinent questions range from "What do your subordinates think of you?" and "In your present job, what do you do best and least well?" to "What was your most frustrating past for experience?" and "What kind of people do you get along with best and least well?"
* Define and refine your collections policy. According to a Dun & Brad-street survey of 9 million companies, businesses with less than 10 employees are the last to get paid, take riskier accounts and lack collection ability. "It's a major, major concern," said Aglar. "Billing and collecting is a job that has to be done step by step." For a primer, he recommended reading Leonard Sklar's The Check is Not in the Mail.
* Don't discount looking outside the company for upper management. "Smart companies with big eyes and expanding possibilities overlook one thing: Is it time to get a chief executive officer from the outside?" Noted Aglar. "They've been there, but (small business owners) don't know what's coming."
Aglar's moral: "The only way to (grow) properly is to plan."
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|Article Type:||Company Profile|
|Date:||Oct 1, 2000|
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