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GUEST COMMENT How to harness internal disruption and grow your business

How can you ride the internal disruption wave to the shores of a profitable business?

Online Retailer Spreadshirt on Navigating the Awkward Growth Years

Disruption is seen as a force for good, especially if you’re the new start-up overturning an established industry. Fresh ideas, new working styles and shiny technology can change the world.

But what if that disruption is internal? It’s not just corporates that experience disordering. There can be an awkward growth phase in a (retail) business as it moves from a nimble upstart towards the steady growth of an established company.

How can you ride the internal disruption wave to the shores of a profitable business?

At Spreadshirt, we’ve just been through our period of internal disruption. Our on-person, self-expression retail platform has grown from a start-up to a €100m international grown-up and seen a few changes along the way.

Like most disrupted businesses, we didn’t necessarily see it coming, but we did learn from it. We had to respond nimbly, challenge ourselves to change and learn how to communicate again. We had to recognise shifting priorities, realise that we’re not invincible and manage internal resistance.

Recognise shifting priorities

While you’re busy growing the business, the business is itself often changing. You can no longer have your eye on everything and management concepts, or significant operational problems can creep up on you while you’re prioritising something else. Of course, this is normal, but it can make you doubt your approach. For us, this was focusing on quick wins and future-oriented projects above the issue of our legacy technology. We overstretched ourselves and had to take a step back. The plus side of this is that our team built a new system, which is future-proof and can grow with us.

This is where you need someone with a bit of perspective, one of those investors or advisors you have on board. They’ve probably seen it all before and give you the wisdom of their experience. While you’re head down in the engine of the business, they can take a broader look at the road in front and the bumps that might be coming down the line.

At the same time, as a business leader, you may also find that your role changes. You may need to step up into the wider-vision role and empower your, now more prominent, team to take an operational position.

The role of the leadership team at Spreadshirt has undoubtedly shifted. As a scaled retail business, we now have 750 people in 6 venues, scattered across two continents and with 15 years of doing things in specific ways. This is a very different business that requires very different processes. So it’s essential for us to focus on our core values; empowering the team and creators, exciting our users and keeping it simple.

You think you’re invincible

In the buzz of early success, beware of being overwhelmed by ideas about new markets and pivots. While all online retailers should allow for some experimentation, it can also be disruptive for other, profitable parts of the business. You can end up spreading your team too thinly and not doing anything very well.

We were pretty good at international expansion, but we took it a step too far when we acquired a company in Brazil. Our platform wasn’t yet ready for the complexity of integrating a new business into it. We had to solve other issues first, and in the future, we’ll be prepared for such an integration.

This process made us realise that it’s more important to have the satisfaction (and profit!) of doing a few things well. Profitability and a well-structured business can also help you ride out the arrival of external disruptors too.

More recently we pivoted slightly, into three business units, concentrating on the market sectors where we see the most potential for growth and profit: Personalisation, Marketplaces, and Shops. Each was constructed according to their most basic and intrinsic features – who the target audience and sellers are. The new structure has already exceeded expectations with an 80% increase in new Marketplace Sellers and had a 35% increase in all Seller earnings.

Internal resistance

When you’re small and all in one room, or on one floor, or in one city, it’s easier to share news and ideas. As the business grows, it can feel like it’s being diluted. The strong sense of identity and determination of the original gang is not always understood by those who arrive later.

Your first employees may not like the changes in the way the business works and communicates. They joined a retail start-up; do they want to be part of a corporate? Managing this sort of disgruntlement is all part of handling internal disruption and the awkward growth phase.

At Spreadshirt, we recruited a Feel Good Manager to keep the good vibes flowing within the team. We wanted to hold on to our talent and to grow a cohesive company. This lead to a series of ideas, including Wandertag; the summer outing for all Spreadsters to enjoy the outdoors together and get to know each other.

Managing the internal disruption caused by growth can be as challenging as starting the business in the first place. In the end, for online retailers, growing up is a form of disruption. It’s a culture change, and everyone in the business needs to recognise that disruption can come from inside, as well as outside the company. Only then can you navigate your retail start-up through the awkward growth phase to the grown-up shores of steady profitability.

Author: Philip Rooke, chief executive officer of Spreadshirt. Connect to him via LinkedIn.

Image credit: Fotolia

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