What to do when your entrepreneurial business has hit a ceiling

Updated: Aug 27, 2019

Make sure you are not one of the 90% of entrepreneurial businesses not quick enough to react to a significant stunt in growth

Founder of entrepreneurial business when the business has hit a ceiling and growth is stunted.

In a Harvard Business Review article entitled ‘Reinvent your business before it is too late’, Nunes and Breene refer to ceilings as ‘stall points’ and reference that only 10% of businesses who encounter a major stall in growth will successfully recover from it. This is a startling figure, which the authors put down to businesses waiting too long to react, and thus allowing deterioration until the point in which the business doesn’t have the resources, opportunity or energy to to reinvent themselves.

All businesses will hit a ceiling, and often more than once on their journey. The key is to recognise when it is happening to your business, be conscious of the need to change and adapt, and very quickly react to the slowdown of growth. The quicker you identify the status of your business, and the more open you are to transition and reinvention, the more painless the break through the ceiling will be!

Why do businesses hit a ceiling?

There are a number of reasons businesses hit a ceiling and these can be external; not responding quickly enough to changing markets and trends, not being able to keep up with the pace of innovation, losing market share to an ever-increasing competitive landscape etc. For entrepreneurial businesses however, the first ceiling is often internal.

Entrepreneurial businesses are usually established by a Founder(s); entrepreneurs who run with an idea and make a huge success of the early stages. Typically the start-up phase of the business is a case of survival; where everybody involved pitches in at any and every level, where decisions are made on-the-fly and where any sale is revenue. It is this tenacity and unwavering drive for success that enables rapid growth for successful entrepreneurial businesses. There comes a point however, where the business requires a more considered level of structure, process and mindset if it is to continue to the next stage of maturity. If businesses do not recognise this need in good time and adapt, they will, and usually do, hit a ceiling.

How do I know if my entrepreneurial business has hit a ceiling?

The signs of this stage are perfectly summarised in Traction by Gino Wickman. In this book, Wickman describes the following as common frustrations of entrepreneurs at this stage:

  1. Lack of control; it feels more like the business is controlling you.

  2. People; you are not on the same page as your colleagues, customers or Partners.

  3. Profit; there just isn’t enough.

  4. Lack of growth; growth is slowing / has stopped and you feel unable to change it.

  5. Nothing is working; your team are running out of steam and you are overwhelmed.

The reason so many businesses (90% according to earlier sources) fail to push through the ceiling is because they don’t recognise the above signs within their organisation. Typically at this stage of the business, the leadership team are so busy fixing day to day issues and ‘fighting fires’, that they struggle to see the bigger picture of the business’ health. In a Forbes article entitled ‘You and Your business are at a crossroads: where will you go next?', Goldsmith uses a perfect quote to explain why and how this occurs;

"sometimes you’re so close to the elephant, all you see is grey".

Even when an issue with business health is recognised, often it is not the entrepreneur / founder who first identifies that the business has hit a ceiling. In fact, this person can often be the last person to recognise / admit there is a problem. Many businesses maintain a ‘we can fix it ourselves’ mentality for this reason. This may well be true, but in my experience, when you’re too close to the business, you may struggle to see the necessity and urgency to act.

So, if you are an entrepreneur or a leader within an entrepreneurial business, and you relate to the signs above, ask yourself the following questions about your business:

  • Do you feel in control? Are your working hours reasonable? When was the last time you took a proper break from work?

  • Are you confident in the team you have around you, that they can get you to where you need to be as a business?

  • Are your customers the right ones? Are they who you envisaged they would be? Is the margin you make on each client reasonable when you consider the time your team spend delivering to them?

  • Are you generating enough profit? Are you on track to hit your financial projections?

  • Is the atmosphere amongst your team positive and energetic? Do the team seem tired?

  • Are you personally as motivated and excited about the future of the business as you once were?

If the answers to these questions paint a picture of your business which is not so positive, you have probably hit a ceiling and you need to act, fast.

We’ve hit a ceiling, what should I do?

Before giving the answer to this, you need to ask yourself three questions;

  1. Are you prepared to change; to reinvent the structure, processes and mindset of your business and team? Change takes energy and drive, and as entrepreneurs, you’ve likely already exercised a lot of this! When the business reaches this stage, it may be that the entrepreneurial spirit which has gotten you here, is not necessarily what is required for the next phase, the business needs to transform.

  2. Are you prepared to invest into the steps required to break through the ceiling and mature as a business?

  3. Are you willing to be open, honest and vulnerable in order to truly move past issues which are holding the business back from its potential?

If the answer to the above questions is yes, the route I would recommend is the Entrepreneurial Operating System (EOS). EOS is a simple, digestible and logical system which will transform your business and allow you and your leadership team to focus on big, long-term, strategic decisions for the business (rather than urgent, short-term issues).

What is EOS?

In plain terms, EOS is an operating system for your business. The system has been created by collecting decades worth of entrepreneurial experience from business across the world, including some of the most valuable lessons from the most successful business books by Stephen Covey, Patrick Lencioni, Michael Gerber etc.

EOS is available for anybody to learn through the book Traction by Gino Wickman, and the process of implementing EOS means stepping outside of your business to work on your business every 3 months for a full day (sometimes 2), to learn the 6 components (below), associated tools and how to implement them into your business.

The 6 key components of EOS are; Vision, People, Data, Issues, Process and Traction. The objectives of EOS are to ensure that:

  • you have clear vision across your organisation with the right people, in the right seats

  • your leadership team have a pulse on the business operations by managing a handful of numbers on a weekly basis

  • as a team you can identify and resolve issues promptly and permanently in an open and honest environment

  • your business has documented processes that are followed by everyone

  • every single employee knows and is working to their priorities

  • a high level of trust, communication and accountability exists throughout your business

The process pushes you to always think about the future of the business and in this way stops bad habits such as creating a structure for people or losing sight of long-term goals.

Any entrepreneurial business with 10-250 employees can implement EOS and can do so independently. It is strongly recommended that you recruit the help of an external EOS implementer as the results will be seen sooner, your leadership team may feel more comfortable being honest via an independent person, and you may learn more about your business and allow the sessions to be more effective if you can remove your bias (conscious or unconscious) from the process.

EOS Implementers are facilitators, meaning they do not just tell you the answers (and thus create dependency) as some consultants do; they facilitate discussion and change to the point at which you are ready to take control of the system yourself. Your EOS facilitator will support you in navigating these components in a particular order to ensure you are reaping the rewards of the system in the quickest time possible, and making good decisions for the business.

If EOS sounds like an option for your business, take these 2 free steps before you make any investment:

  1. Read the book Traction by Gino Wickman (despite me saying there is no investment required, you do need to pay for the book!). Traction summarises the entire process, and so by the end you will know for sure whether this system could work for your business. You can read the first chapter for free on the EOS website.

  2. Contact an EOS implementer (click here) who will deliver a free 90 minute introduction to your leadership team about EOS, and then leave you to decide as a team whether you are unanimously in agreement that this is the right direction for your business. The first meeting is free because EOS only works if the leadership team are bought into the process.

Bear in mind that this process is not a quick-fix, it takes an investment of time, energy and money to reshape a business. However by the end of the experience you will have the right team around you, you will be working with only the right clients, and your profit margins will be where they should be. You will have successfully pushed through the ceiling and transitioned to a new stage of maturity.

I am an EOS implementer and can help your business push through the ceiling. If you’d like to know more about EOS, how I work, or you’d like to request a free 90-minute introduction for your leadership team, you can contact me at steph@sghcoaching.com

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