The breakthrough I had in the shower that day was that an employee's growth trajectory had nothing to do with their experience or even their performance in their current role. Instead, the most important predictor of future performance was an employee's ability to improve at a high rate, irrespective of their starting point.
I was visualizing our company's annual growth rate as a line on a graph. Then I thought about people who either rose above or fell below that growth line as it advanced upward. That visualization of our employees' growth relative to our company growth is what I frantically sketched when I stepped out the shower.
After reflecting for a few more days, I created a few more lines, figured out the right label for each one, and suddenly had a clear concept that I could share with my team to explain what we had been experiencing throughout our rapid growth.
In fast-growing organizations, the difference between people who can ride the growth wave and those who get consumed by it is their ability to increase their capacity at a rate that equals or exceeds the company's growth rate. Just because someone is great at their job today doesn't mean they will be ready for the job of tomorrow, which is why some A-Players struggle as their roles evolve. In contrast, some employees who did not stand out initially actually improve as they are given more responsibility. They might not start as an A- Player, but they find a way to grow and develop into a significant asset to the organization over time.
Most leaders of fast-growing organizations are familiar with the concept of the valley of death. This is the phenomenon where a period of high growth is followed by a downturn or a period of stagnation. Many companies don't survive these valleys of death, while others only make it out battered and bruised and after significant turnover.
I didn't realize it at the time, but we were in one of these valleys of death when I had my shower epiphany. Many of our early stars were fizzling out, and it wasn't easy to identify who could step up and who would stumble along the way.
This problem isn't rare or unique. Many high-growth organizations struggle to keep their teams together through periods of rapid growth. In fact, I received the same piece of wisdom from several different coaches and peers who had followed the same growth trajectory AP was on: Every time you double your company's size, you will break 50 percent of your processes and 50 percent of your people.
Unfortunately, the way many companies address this challenge is to follow the churn-and-burn playbook of Silicon Valley—hire young employees, work them hard, burn them out, and swap them out for a new crop who are eager to take their seats on the roller coaster.
This 50 percent rule was pretty prescient. Even though we weren't losing half our people every time we doubled, we were still experiencing significant disruption with each leap forward. This was not how we wanted to build a business; we did not want to be a race car that had to change its tires every few laps around the track. We wanted to grow AP by growing with our people and bringing them along for the ride—a mutually beneficial outcome where our team members lifted each other and the organization up as they improved.
We needed a different strategy. What we really wanted was to build a culture that helped build better people.
Visualizing the Capacity Building Road Map
The core of my shower epiphany was that we couldn't think of employee performance or ability as static. Rather, we should think about how an employee's development trajectory relates to the company's growth curve. Here is a refined version of the chart I drew and shared with the company a few weeks later, with the four groups that comprised most of our employees identified on the learning curve:
The axes measure the role requirement for a given employee across the time span of company growth. The graph represents how someone performs in their role as the expectations of that role increase over time. Generally speaking, most employees within an organization fall into one of four groups. Some are Underperformers, while others are A-Players or Unicorns. The rest fall somewhere in the Capacity Building Zone (CBZ).
The solid line in the graph represents the growth rate of the company and the most senior role for a given business function at a given point of growth. Let's use marketing as an example. Early on in a company's growth trajectory, the firm's most senior marketing person may be a manager.
However, once the company grows a few years down the line, the company likely needs a full marketing team, possibly run by a VP who oversees directors and managers working below them.
As these more senior roles are added, every business must determine whether to promote from within or hire from outside the company. It's easier to make this decision if leadership understands how their people fit into each of the categories in the chart above. Here is how it breaks down: