Organizational growth and turn over

Organisations need to grow. However, they should not grow for the sake of growth. That would be a virus. Orgs should not grow to survive as well. Orgs should grow with a purpose.

At times, It is not clear why orgs need to grow. It is very easy to find a way out and say “If we do not grow, we are going to close”. That is not true. One of the most successful orgs in India - in terms of revenue - has people and revenue growth that is static in the last 10 years. In fact, it is a governmental organisation that works under more constraints that most private organisations. It is the Power Finance Corporation - PFC.

What it instead has is a well defined purpose that every employee needs to understand and act with. Trying to change the charter of that organisation is out of the control of every employee - including its CEO. That brings us back to a private org. Private orgs do not have the one luxury that PFC has - a static and clearly stated sense of purpose.

Just to put things in perspective - PFC has around 350 employees with a revenue of USD 2.2 Billion. It is by no means a monopoly or has any preferred status with respect to the government. It has some privileged access to information that it fully exploits. It struggles to hire the best and the brightest and its leadership structure is deeply crippled.

Context

I am seeing more organisations with the meaning of growth and with communicating the intent. Both the organisations I have worked with have bungled it , in my opinion. The clients I work with as well also have very conventional methods of growing and have never tried to understand what it means to employees.

In fact, No single publication that I read - that includes the HBR, MIT-SMR, Economist or the New york times - has any deep work on what growth means from a more holistic perspective. They all look at growth and success in hindsight and never dissect the process of growth in terms of its pains.

I have been torn by ow simplistic most of the communication has been with growth - While simplistic is not a concern , it seems to also be trivialised into a solved problem category that I do not agree with.

Some challenges that I see with growth

Growth is multi-dimensional. It means different things to different people. While we are aware of this point and acknowledge it, we seem to be in a rush to quantify things that are more visible and qualify things that are intangible - rather than trying to make an effort to spell it out clearly for all of us to understand how complex it really is.

Some clear challenges with growth :

• Growth means all our internal systems break down and new behaviours emege
• Growth means culture - as it stands - tends to dissipate and new culture evolves to take its place
• Growth means there are several parallel hierarchies formed - apart from the official ones - that create more confusion
• Growth means communication is not as straight forward as it used to be - with different messages in different pockets of the organisation
• Growth means utter chaos in terms of boundaries , expectations and roles & responsibilities
• Growth means investment in terms of capability and leadership that can handle all these challenges and provide structure and clarity

The most visible challenge with growth 

The most visible challenge with growth that I am not including is that of employee turnover. I am not listing a challenge because , for me, it is a symptom not a challenge.

Most of our time is spent in addressing some of these visible symptoms that would seem pyrrhic later.

So the question that comes up is - is employe turnover really bad?

My opinion is It depends - I know it is a typical Consultant answer. Let us dissect it further.

What employee turnover means is to lose people that have context and have new people that would need to learn new context. It forces us to confront these challenges more heads on since the pain that comes with turnover is pretty intense.

Some advantages:

• Turnover provides us direct feedback on all the challenges that the org is facing. A very painful way of getting feedback - but the most valuable
• Turnover provides us with people who expect chaos as they enter any new org - and are more adjustable to the chaos than existing org employees.
• Turnover provides us an opportunity to refocus our capabilities - if we need to

Some issues:

• Turnover makes it difficult for us to retain org context that is very critical in the growth period
• Turnover also starts a domino effect that proves painful in employee retention
• Turnover makes some of the growth challenges public that makes it tough to hire new people

Thoughts?