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Managing Hyper-Growth

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Article by: Steven Hooper
August 10, 2010

Try to imagine 2000% growth in an MLM company in one year–going from $10 million to $200 million in sales! Hypergrowth refers to the phenomenon of the exceedingly rapid expansion of an organization. This kind of growth is not smooth but it is spectacular. In general, hypergrowth hits without warning and the organization is typically not in a position to do anything to significantly prepare for it!

Hypergrowth is not always successful, sustained growth. It is possible for network marketing organizations to grow so quickly that they run out of the vital resources needed to nourish and sustain their operations. Like living things, organizations need certain external factors to grow, the most important of which are a source of nutrients (product, capital, skills, etc.) and a secure environment.

MLM companies that experience hypergrowth need to control it or else it becomes like an inferno that consumes everything in its path but then dies away because it has burnt up all the oxygen. The ideal scenario is to manage the rapid growth of distributors and orders in a manner that does not outstrip the resources of the company. Hypergrowth can be managed by those who understand that growing too quickly can be as dangerous and destructive as growing too slowly or not growing at all.

Hypergrowth operations are linked to entrepreneurial figures. Individual vision, drive, and commitment are an important factor in developing and sustaining hypergrowth. The team that supports the entrepreneurial figure and makes his or her promises come true is equally important. The visionary leader recognizes the interdependence of those who sparkle on stage and those in the home office.

Here are seven lessons about MLM hypergrowth that any entrepreneur with “on-fire” ambition had better learn preferably now rather than later, when the education may be harder and more costly:

  1. Hypergrowth companies need a succession of stars.
    There is a star that flings the company into hypergrowth. To continue existence, you need a succession of stars–sales leaders, products, or both. You must identify and nurture the next star, and then the next. You must always have the next star on the way before the current one declines or else you may join the ranks of the “one-hit wonders.”
  2. Remember the value chain (supply chain).
    There often is a complete dependence on some of the links in your value chain–suppliers, vendors, and backers. It is critical that you nurture these links and provide them with your moving projections and a constant stream of supporting information. Hypergrowth companies place extreme demands on the supply chain. Remember that if you are in hypergrowth, your value chain is most likely in hypergrowth as well. The value chain must be able to survive and sustain your growth.
  3. Know your distributors and customers and be on the cutting edge.
    You must know your distributors and your customers–their wants and needs today as well as in the coming months and years. To stay alive and meet the competition, you must be on the cutting edge of new markets, new product development and production, new recruiting tools, etc. You must constantly “push the envelope” and do things in different ways. Be wise and establish a fair and generous refund policy. Hypergrowth companies do not quibble about refunds. They make friends with their customers because they know that word-of-mouth recommendations are far more effective than advertising campaigns.
  4. Control costs and sort out the money.
    A lot of entrepreneurs are nuts for growth. But, what will make you successful is to build in a concern for profitability into the philosophy of your company. Growth requires financial resources. Cashflow is all-important. A company should never run out of cash. In the rush of acquiring new distributors and their orders, the need to control costs can be forgotten.Pay the people who need to be paid with the money you have. Hypergrowth companies must avoid the temptation to pay their commissions and sales tax liabilities from the next month?s sales activity or else they “hit the wall” if sales activity declines.
  5. Be the best.
    Quality in both products and service actually comes with little ultimate cost. The cost of not doing something properly is nearly always greater than the cost of delivering a quality product or service. Though everyone thinks that they are the best, listen to feedback from distributors, customers, and vendors, and then act on it.
  6. Control growth.
    Hypergrowth is highly exciting but needs to be controlled. Hypergrowth companies keep a tight rein on their resources to ensure that the growth does not become so chaotic as to threaten the company itself. You must find ways to make the transition so your company can function smoothly, efficiently, and with order.
  7. Have and communicate a vision.
    Without vision and knowledge of where the company is going, growth and especially any hypergrowth will be unfocused and ephemeral. The vision should not be held only by you but needs to be communicated throughout the company and along the value chain so that everybody can understand the part they will have to play in making it a reality. Realize that at this frenzied time, you will be required to make decisions from time to time that make you uncomfortable. You may not be able to find and use the information and resources you need to make the decisions appropriately. Recognize that there will be times that you just have to make the decision and let the chips fall where they may. Mistakes will be made, but that too is part of the process. Evaluate, use judgment, and decide.

Any way you look at it, hypergrowth is a risky business! Yet, most network marketing companies publicly declare their intention to be the next darling of the MLM industry and the next hypergrowth company. If you were to sum everything up into one big lesson, it might be this: You must build a company that can turn on a dime when you have to!

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Steven Hooper

Steven Hooper is a recognized network marketing industry name in technology and operational strategy and has the unique opportunity to head up the...

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