4 Downsides of Quick and Easy Customer Growth

Who wouldn’t want fast and easy customer growth for your business? How can there be a downside to quickly closing new deals and acquiring easy wins? Fast-growing trees provide insight into 4 potential pitfalls of fast growth. And that’s the focus of this episode.

Our yard was bare when we first moved into our current home. With a strong western exposure on the front and a steep backyard perfect for twisting ankles, we needed to rapidly address landscaping. We took the advice of our landscaper at the time and put in Arizona Ash. It’s a deciduous tree so it keeps it leaves which makes it great for our hot months. It grows wide and reaches about 30’ in height. It seemed perfect for offering plenty of shade in a hurry.

Not so perfect. It turns out Ash in comparison to other trees is short-lived. Thankfully we also planted slower-growing trees that while they have taken longer to grow; they remained steadfast through the years and the seasons. What caused the Ash to die? Well like other fast growers, it had underlying structural problems. Similar to many fast-growing trees, it was susceptible to disease and vulnerable to frost. Not only did they have a short life, but their aggressive root system also caused damage to other parts of our landscape.

What Insights from Fast Growing Trees Can Teach Us About Customer Growth

Companies that grow quickly may find themselves facing some of the same challenges of our Ash. Here are four areas of concern to anticipate when enjoying fast growth and thoughts for how your business can address each.

1. Underlying structural problems. You will often find the limbs of fast-growing trees cannot withstand the stress of high winds. The last thing you want is to start losing customers because some part of your infrastructure is weak. Some of the systems and processes that you initially deployed may begin to break under stress. Fast growth requires regular attention to processes to keep your business running smoothly. Take the time to define and build frameworks to support business continuity and to scale as growth occurs. Invest in frameworks early and processes quickly because like a fast-growing tree it is often very difficult to go back and make changes once you reach a certain size.
2. Shallow roots. Tree roots anchor a tree firmly to the ground and enable it to draw nutrients and water from the soil and up into the tree. Fast-growing tree species tend to develop very shallow roots. Shallow roots can be hard to mow around, create cracks in driveways and sidewalks, intercept underground sewer pipes and other important utility lines. Improving soil quality so the tree can access oxygen can help. Insights derived from data are the oxygen of business. Create a data driven culture in your business that thirsts for insights. Use these insights to make customer, market, product, and service decisions.
3. Increasing susceptibility to the competition. An unfortunate characteristic of rapidly growing trees is their tendency to develop disease and suffer from life-threatening pests and fungi. The same can occur with fast-growing companies that find themselves enjoying quick success. Fast-growers may ignore competitors making headway in the market. When I was with Motorola, our microprocessor, digital signal processor, and microcontroller businesses were growing rapidly. We tended to worry over competitors such as Intel, Zilog, and Hitachi. TI was barely on our radar screen. It was a mistake. In the early 1980’s, TI introduced its TMS320 series of digital signal processors. The 320 DSP family and its derivatives took off, ultimately becoming nearly half of TI’s revenue. It moved TI into a competitive position in the race for the embedded processor system on a chip – the very space Motorola wanted to own. The DSP family generated billions of dollars in chip sales for baseband modems, disk drive controllers, and a wide variety of other products. TI gave Motorola a “run for its money.” This new family pushed up TI’s market share rank and placed it among the top semiconductor companies. Motorola had become susceptible. Like fast-growing trees in your yard, your business is part of an ecosystem. In the words of colleague Becky Taylor, “it’s super important to maintain a 360-degree view, or an up-periscope, in order to be able to adjust quickly, or as close to real-time as possible.” The ecosystem provides valuable clues regarding the health of all the plants in your garden and the moves being made by competitors. Build strong lines of communication with suppliers, partners, and influencers in your business ecosystem to gain vital clues about your competition.
4. Vulnerability to complacency. Trees need tending. While it takes patience to nurture slower-growing trees, the challenge with fast-growing trees is to avoid complacency. Fast-growing trees often need more attention because their softer wood has a tendency to more quickly grow forks and crotches with narrow angles creating conditions for an early demise. James C. Collins co-author of Built to Last: Successful Habits of Visionary Companies said, “visionary companies install powerful mechanisms to create discomfort–to obliterate complacency–and thereby stimulate change and improvement before the external world demands it.” It takes regular vigilance to curb complacency. Thwart complacency with customer-centricity. Customer-centric companies place the customer at the center of their business operating model where all aspects of the business are informed by or designed to meet the needs of the customer. Keep customers and their success central to your purpose, your mission, your focus, and your goals. Not all customers are equal. Focus on bringing on the right customers from the beginning. Customers that will be a part of your business over time, become your advocates and make referrals.

The downside of trees that experience rapid growth is that they are not healthy and tend to have short lifespans. Healthy mature trees add value to a property. If your goal is to build a company for a fast-sell, rapid growth may seem the way to go. But a smart buyer will be able on their own or through an inspection discern trees that will not make it for the long haul. Better to invest in growth strategies that will serve your customers, your suppliers, and you for years to come. With proper care, you can help speed up the growth of slow-growing trees that will be around for decades if not hundreds of years. The same holds true for every business.