The methodology is the result of 40 years of work by Professor Eric Flamholtz with companies around the world, from startups to Fortune 500 companies. It is presented in well-known publications, translated into 7 languages, and published by prestigious universities such as Stanford University, Oxford University, and Cambridge University. Professor Eric Flamholtz himself is an outstanding business practitioner and co-creator of the success of many companies, who has supported many well-known global brands in developing their organizational structures, including IBM, Starbucks, Neutrogena, and PIMCO.

Empirical research has shown that there is a statistically significant relationship between the occurrence of the Growing Pains phenomenon and the future financial results of a company. Therefore, it is a barometer of the upcoming financial situation of the organization. Good results obtained in the study indicate that the company has great development potential, including the ability to cope with changes in its external environment. Conversely, poor results obtained in the study indicate a lower development capacity of the organization, including a decreasing ability to adapt to upcoming market changes. The study results explain 80% of the variability in gross margin and 55% of operating profit. As the only entity in Poland, we have an exclusive license to use the methodology in cooperation with Polish entrepreneurs.

The “Growing Pains” phenomenon and the size of the company

“Growing Pains” occur due to inadequate organizational development in relation to the scale and complexity of the business. They are a symptom that the company’s growth is not progressing correctly. They appear as a warning signal and indicate the need to move the company to the next level of organizational development.

Paradoxically, they result from the company’s successes, not failures. However, they are both a problem in themselves and a sign of a fundamental systemic problem in the company. They usually indicate a mismatch between the infrastructure of a given organization and its size and stage of development. This means that resources, operational and managerial systems, and company culture (the four most important values of the Organizational Development Pyramid®) have not been developed to a degree appropriate to its size, complexity, and growth stage.

Growing Pains Strategy® is a methodology that helps organizations identify their growth challenges and plan to improve their effectiveness. When an organization doubles its size, measured by revenue, production volume, annual budget, or number of employees, it usually requires a change in its infrastructure. If this doesn’t happen, growth-related problems will multiply, and even successful companies may face the risk of failure.

The methodology identifies the top 10 common symptoms of growth-related pain, which include:

  • People feel that there are not enough hours in the day.
  • People are spending too much time “putting out fires.”
  • Many people are not aware of what others are doing.
  • People have a lack of understanding of where the company is headed.
  • There are too few “good” managers.
  • Everyone feels “I have to do it myself if I want to get it done correctly.”
  • Most people feel our meetings are a waste of time.
  • When plans are made, there is very little follow-up, and things just don’t get done.
  • Some people have begun to feel insecure about their place in the company.
  • The company has continued to grow in sales, but not in profits.

The methodology involves tools such as the Growth Barrier and Organizational Effectiveness Survey, strategic planning, leadership and management development, team building, organizational structure design, performance management system design, and cultural management.

According to the methodology’s inventor, Professor Eric Flamholtz, developing a company without an action plan is like sailing a leaking boat in unfamiliar waters surrounded by sharks, and one mistake can cost everything. He believes that just as a boat crew dreams of a guide who can help them navigate, repair their boat, and impart necessary knowledge, business leaders need a guide who can help them develop their organizations.

The methodology recognizes that there are threshold levels of growth-related pain that are dangerous or unhealthy for an organization’s daily functioning and future financial results. The goal is to diagnose the intensity of the pain and recommend changes to make it less noticeable for stakeholders such as owners, executives, managers, and employees.

The key to a company’s success varies depending on the stage of its development. The methodology outlines different development stages based on the revenue achieved each year and recommends different development goals for each stage. It focuses on developing different levels of the Organizational Development Pyramid, depending on the stage of development.

The Value of Strategic Planning

One of the pillars of the Growing Pains Strategy® methodology is strategic planning. The true value of strategic planning lies not in the plan itself, but in the process of planning, systematic analysis, discussions, and solving specific problems that focus managers’ attention on the future of the company.

“Plans are worthless, but planning is everything!” / Dwight Eisenhower, former President of the United States, Supreme Commander of the Allied Forces in Europe during World War II

Factors that Determine the Success of Polish Companies
What factors determine the success of Polish companies?
What sets apart companies that effectively overcome the stages of development, bypassing the traps encountered at each of them? To identify growth-limiting factors, we studied nearly 900 Polish organizations.

Here are the most important conclusions:

  • Only 12% were in the Leaders group – these companies do not have major barriers to development and have good business results.
  • 36.9% of companies have the potential to become leaders, provided they “heal” the areas that are most important in their stage of development.
  • Nearly 10% are companies in trouble with the biggest recognized growth barriers.
  • As much as 41.6% are entities that should take corrective action, otherwise there is a serious risk of remaining on the market.

The research findings clearly indicate that the biggest barriers for Polish companies are the lack of good managers (26.9%), failure to delegate tasks and low teamwork skills (26.8%), improper work organization (20.9%), and lack of planning – mostly ad-hoc action (16%).
Global leaders stand out for their low growth barriers. In the Growing Pains Survey©, they score below 15 points on a scale of 10-50 points, and in the analysis of organizational effectiveness, they score above 4.5 points on a scale of 1-5 points.

Many Polish companies – including yours – have the potential to become global leaders, provided they eliminate the growth barriers identified in the study.

If you want to learn more about the methodology, buy the book – available exclusively in our store!