Preventure is a health and wellness services company experiencing very rapid growth. Its revenues under contract increased from $2M in 2006 to $3M at the beginning of 2011 and $5M by the end of the same year. Revenues grew further from $7M in 2012 to just under $10M in 2013, and the company is projecting revenues of over $15M in 2014. The early success of Preventure suggests a promising future – if it can effectively overcome the inevitable challenges which come with success.
Chief Executive Officer and co-owner Mark Correia, who is also an active member of his Vistage CEO peer advisory board, is both excited and vigilant about what’s next for his company. He’s excited because his real passion is to build a great company and a great place to work, and the company’s growth provides him with the opportunity to continue to realize this mission.
However, growth presents him with challenges that Preventure is working hard to meet. In fact, the company is encountering limits to success which it is seeking to overcome. Limits are a natural outcome of growth, and overcoming limits by cultivating new ways to grow is an inevitable requirement if you are going to be able to sustain success.
Organic growth begins exponentially, not linearly. Preventure’s revenue pattern of slow growth followed by rapidly accelerating growth is typical.
Managing slow growth in the beginning means putting a strong foundation in place. It is about developing the capacity to grow – e.g. the management team, business model, core competencies, organizational culture, and initial connections to the market. Foundational growth is measured more by the strength of your business’s inputs than its size or financials. If you expect linear or more rapid growth in the early stages, you are bound to be frustrated and either push too hard or give up prematurely.
At the same time, if you successfully put a strong foundation in place, you have to be prepared for the demand that tends to emerge from it. For example, in the early years of Preventure, Mark’s primary challenge was making enough money to stay in business. Now his primary challenge is to meet the demand the company has generated. He has developed a three-year strategic plan and restructured teams to handle more work. He is also working hard to hire the right people to fill new positions.
Sustaining a company’s success requires building new engines of growth. Preventure is now ramping up its data capabilities to demonstrate the value of its services. It is screening new business to accept fewer, large, highly-qualified clients and let go of smaller ones. In order to manage the greater complexity of its business, the company is developing new systems and processes while adhering to Mark’s commitment to building a company that values its people and is a great place to work.
Preventure is also becoming more comfortable using an outsourcing model for parts of its client work and provider support. At the same time, it continues to invest and develop the in-house services it views as core competencies. Moreover, because the company is debt-free, it can afford to invest all of its new income into funding these new growth engines.
Building new engines of growth also requires anticipating and addressing new limits before they become serious problems. As part of the company’s recent strategic planning effort, Mark refused to commit to a Big Hairy Audacious revenue goal because he was concerned about the stresses that Preventure’s people were already under. The management team is currently reviewing work to not only start or continue but also to stop, and it is weeding out smaller clients whose requests have become too costly to service.
While hiring sufficient key staff, especially account managers, continues to be an important concern, the more subtle but equally critical gating factor might be time. The staff’s new business and recruiting/onboarding responsibilities take valuable time away from the organizational redesign work required to streamline the execution of these responsibilities. To help people in your organization manage time more effectively, click here.
By focusing on building a great company and a great place to work, Preventure has created a strong foundation for further growth. Its ability to develop successive engines of growth and address the inevitable limits that emerge at each stage will determine if Preventure can sustain its early success and realize its vision.