Your big upward rush has stalled, and somehow, despite all those sales and all the new people you’ve brought on, your margins are rapidly shrinking. How could that be? And who will shoulder the responsibility? This is when the finger pointing and frustration typically begin in the part of the business cycle I call the Avalanche.

Administration—the back office—has been throwing a lot of people and a lot of money at all these symptoms. Executive leadership is now looking for accountability. Who are they going to blame for this failure? Who is responsible for the IT mess that is going to be so expensive to clean up? Who is responsible for not keeping the margins the same as they were during the powerful growth phase of the business cycle you’ve just been through – the Tornado? Why didn’t profits rise at the same rate as revenue? It has to be someone’s fault!

The plain fact is that there’s really no one to blame. These “failures” are all part of the Business Storm Cycle, and you’ve got to get through them if you’re going to survive long enough to enjoy your next Tornado. Nevertheless, there are a couple of Avalanche issues that need to be resolved while you’re in the midst of the crisis.

Company boards and executive teams can usually recognize that the CEO skill set that was required for the Tornado’s acceleration is very different from what it needs in that same role later in the Business Storm Cycle when you hit an Avalanche—but they fail to see that the same is true for other leadership roles in the company too. As a CEO, you need a set of quite different professional resources to get to the efficiency phase and maintain your market, and it’s common for companies to hire new CEOs as they go into the high-growth phase. It’s very uncommon, though, to see companies hire new HR directors, accounting managers, finance directors, or technology leaders in order to handle the same set of challenges. And yet the leadership skills used to make it through the Tornado are not the same skill set needed to make it through the deceleration point. So if you’re the one who gets to make these decisions, remember—you want to continue the cycle, which means you want leaders who can get you ready for the next transition, and back to the Tornado. Those may not be the same leaders you have in place right now.  You may to retrain them for the new phase or replace those that can adjust.

It doesn’t matter what kind of a company we’re talking about here; you’ll see the same sort of thing happening across the board, regardless of the industry. When the company hits the deceleration point, it discovers that the processes that once worked don’t work any longer, or at least not efficiently. The company is now bigger than it was, and that has all sorts of often-overlooked consequences. For one thing, it’s more bureaucratic. It has more processes to handle. An Avalanche is a tough time for a company. The back-office staff has failed: they failed the company, and they failed themselves. There’s a lot of disillusionment going around, and a lot of despair. Regardless of the terrific growth you had, everyone knows the Tornado was cut short. No one understands it’s just a natural part of the cycle, so the back office gets blamed for it.
This is the moment when the executive leadership needs to step in and explain what’s going on. As a leader, your role is vital now.    Explain the cycle and let folks know that it was inevitable. They need to hear that it is NOT their fault, it was inevitable.

Every Tornado has to end. The goal during the Tornado was to keep it alive as long as they could—and however long that was, they’ve done that. Stop looking backward, and start strategically looking forward. Get in touch today.