LIFE CYCLES, Part X
A leading characteristic of companies in the “Them” phase is the relative stability and balance of the three Dynamics within the Sustained Profitable Growth model.
While sales growth and profitability aren’t always moving in a positive direction—or at least not at an increasing rate—they’re relatively steady and predictable. Cash flow is positive and healthy enough to allow for reinvestment in the growth of the company.
Employment is reasonably stable and the company is able to attract and keep the talent necessary to support its continued growth and leadership position within the markets and communities it serves.
“Them” phase companies are typically operating from a written Strategic Plan. This helps ensure the alignment of their people and processes in accomplishment of the company’s goals. An adequate number of these processes and systems are in place to manage the complexities of a company of this size as well as to ensure consistent results of the company’s products or services.
This phase is similar to what author Les McKeown refers to as the Predictable Success phase in his book by the same name. He writes that companies in this phase are “…maintaining the right amount of systems and processes necessary to tame complexity, while at the same time holding in balance the entrepreneurial zeal, creativity and risk taking that have grown the business to this point.”
“Them” phase companies don’t necessarily leave behind all the characteristics that defined them in their “We” phase. They may even continue to look like “We” phase companies from the outside. They are still driven by a need to compete and improve, by a need to be profitable and grow (although this growth might come in different forms and may not be defined in dollars), but the questions they ask themselves change. No longer is it simply “How can we do things better?” but “Should we be doing these things at all?”
Just as the “We” phase of a company is a time of accumulation, the “Them” phase is one of figuring out what to do with all the things that have been accumulated. It’s a time of reflection. Rather than blindly accumulating more things, this is a time to find meaning in what has been accomplished.
As companies age, so do their founders. And what was important to them when their company was first started or when the owners were in their 20’s, 30’s and 40’s are frequently not the same things that are important to them when they’re older. Things change. People change. Priorities change.
As mentioned in Part IX of this series, “We” phase companies are defined by the terms property, prestige, and power. This is their accumulating phase and a natural part of their growth.
“Them” phase companies have a corollary to these three terms but with a slight difference. These companies are often defined by their relationships, purpose, and service. This same principle applies to the people who run them. In Part XI I’ll expand on this and introduce another concept that defines “Them” phase companies.
