Here we go again… GoPro is just the most recent example of poorly managed hyper-growth leading to drastic cuts. After ballooning its workforce by some 50% annually, GoPro recently announced a 7% workforce reduction as a result of disappointing 4th quarter sales. Considering the 4th quarter closed only a couple weeks back, these extremes suggest a business out of control.
Source: Mashable.com
Companies lacking useful strategic and operating plans tend to make biggest mistakes when growing at the most rapid rates. Certainly, employees are stretched when businesses grow at the remarkable rates GoPro did before and after its IPO. These conditions most often lead to requests (demands?) for more people. When managed in the moment, or without longer-term vision, the inevitable slowing of sales then leads to decisions on the opposite extreme.
GoPro’s 1500 employees undoubtedly believed they were part of a juggernaut, especially because the company makes excellent products. While I don’t put much stock in Glassdoor‘s anonymous reviews, the vast majority of the employees writing on Glassdoor had great things to say about the leadership, environment, and overall company culture. Those positive attributes will clearly erode, where the lack of management and planning that led to the announced workforce reduction will open up a whole host of newer and potentially more complicated problems for GoPro. It’s also worth noting that even the most positive employee reviews referenced poor structure and general disorganization. Indeed, the signs were there but action came only after calamity.
Every company will have to reactively manage events, often beyond their control. But there’s a consistent pattern of companies in hyper-growth stage losing the necessary proactive edge, opening the door for reaction on every front. Accordingly, rather than controlling business action and the company’s future, it is controlled by forces inattentive management created.
GoPro still, however, has a great deal going for it. Their mismanaging hyper-growth is hardly the first, last, or only time it will happen. How they proceed, and the way they manage the business going forward, will determine if GoPro’s staff cuts amount to a valuable lesson learned and a small detour on the company’s way to the next generation of success or the unraveling of a (once) terrific company. Getting it right won’t be easy and will require great expertise.
Keep a close eye on GoPro! These next few weeks and months promise to be more instructional and exciting than anything every recorded on their action cameras.