When is it time to Reinvent yourself? The Rule of Triplication in business reinvention. understanding when to formulate a new business strategy

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Too often, organizations change for the sake of change, leading to disruption and confusion. However, just like hermit crabs, businesses need to find a new shell when they outgrow the old one. When is the right time for this transformation?

Understanding the Need for Reinvention

Change is inevitable in the business world. As companies grow and evolve, their systems, focus, and strategies must adapt to support their expanding operations. What gets a business to a certain point is usually not what's needed to get it to the next evolution of the business. Thus a business will do well to understand what stages there are throughout a lifecycle and when to re-invent itself and formulate a new business strategy by using the rule of triplication.

This blog post explores the concept of organizational reinvention, drawing inspiration from the hermit crab's need to upgrade its shell as it grows.

The Rule of Triplication

In general terms, every time a business triples in size (either in headcount or turnover), the principles that led to its initial success become less relevant. This necessitates a strategic shift to maintain growth and navigate new challenges. It necessitates a need to formulate a new business strategy yet not leave behind what has made it successful to date.

Stages of Organizational Growth & Reinvention

• Fledgling Businesses (1-30 Headcount, <$10M T/O): The focus is on survival and securing new customers. The founder plays a crucial role, while staff handle administrative tasks. Cash flow management is critical. As the business grows to 4-10 employees, structure starts to emerge, and dedicated departments may form. At 11-30 employees, the founder's dilemma arises - how to let go and avoid becoming a bottleneck. The board of directors becomes increasingly important in guiding the business through this transition.

• SMEs (10-300M T/O): At this stage, systems improvement and alignment take center stage. The founder may have exited or found their place within the company. The CEO builds an executive team and focuses on securing talent. The board and CEO work together on strategy and execution. As the business grows to 30-100M T/O, commercial excellence and management efficiency become key priorities. Multiple layers of management emerge, and the company may explore exit strategies or M&A opportunities. At 100-300M T/O, the focus shifts to growth, either within existing markets or through expansion into new ones.

• Corporations (1B+ T/O): With 1-3B T/O, existing structures may no longer be effective, prompting a reevaluation. The company may consist of multiple businesses without dedicated management. Alignment and flexibility are crucial. At 3-10B T/O, the concept of "companies within companies" emerges. The conglomerate may consider splitting into separate entities. At 10-30B T/O, the company's size allows it to influence the market. Each unit likely has multiple businesses within it. Beyond 30B T/O, the question of "when is big too big?" arises, and the future holds new challenges and opportunities.

Embracing Change for Continued Success

Reinvention is not just about change for the sake of change. It's about recognizing when the old shell no longer fits and proactively seeking a new one that supports growth and evolution. it's about recognizing when your current strategies and structures are holding you back and proactively seeking new approaches that foster growth and evolution.

By understanding the signs and embracing change, businesses can position themselves for continued success in an ever-evolving landscape.

Ready to assess your business's health and uncover new growth opportunities?

Egress Australasia's Business Health Check is the perfect starting point.

Contact Egress Australasia today to schedule your Business Health Check and embark on your journey towards sustained success.