We’re not supposed to get a foot of snow in October, but that’s what greeted me the other morning – along with no electricity… The transition from summer to winter (aka fall) is supposed to happen a little smoother – some cool crisp days, maybe a frost or two, then a few flurries in November, and frozen ground mid December. Fall foliage covered in snow is not in the plan.

This disorderly move from one season to the next is similar to the growing pains many companies experience. Instead of seamlessly adding new channels or upgrading processes, they often stumble their way to the next level. Since growth is pretty much at the top of everyone’s list, successful companies will eventuality run into these bumpy transitions. This happens whether they are adding outside capital or building sales organically.

So what can you do to try to avoid getting snow on your foliage? Here are a couple ideas.

• First is to realize that it will happen. Companies growing from a few $M to $10M as well as those going past the $50M watermark will run in to this. It’s human nature to put your head down and grind away, assuming these little challenges are just another small hill to surmount.

• The most obvious sign is that you and your people are getting lost in your pile of information, and becoming less organized in your execution. Spreadsheets are no longer giving you the forecasts you need – its time to put in some infrastructure and processes that are designed for this purpose.

• Management styles need to evolve from the collegial, flat, all-for-one approach to a more formal organization. I’m not saying you need an HR department, but the organization needs more structure to function efficiently.

• Last, but certainly not least, your strategy needs to move from a product or product-line focus to a broader corporate viewpoint. A product view will get you to a couple $M, but more pieces are usually needed to build the company to the next niveau.

Growing your company is a somewhat chaotic, but supremely satisfying achievement. But be aware that snow can fall before you expect it. When the warning signs appear, be sure to change the way you are doing things, before the lights go out.

Markets are not static – they evolve, grow, shrink, disappear, and are built. The challenge is to know when this may happen so you can be ready to take advantage of the new sustenance. Here are a few things that you can do to be sure you don’t end up like the squirrels.

• Having a deep understanding of your customers’ situations is the best starting point. After all, they have the problem and the money (usually). For instance, if you are selling 96-well screening thingamajigs and your customers have big backlogs, then there is an opportunity for you (or your competitors…)

• What is everybody else doing? I’m sure the squirrels quickly surmised that all their brethren were fighting them for the 3 acorns that fell on their acre. If your competitors are fiercely throwing all kinds of effort (and VP’s) at even small business opportunities, then something is afoul in your market.

• The good news is that markets do not tend to vaporize; the problems that were being addressed often just shift to new solutions. Similarly the squirrels are now all rushing to get sugar maple seeds stashed away. Capillary sequencing, HPLC, and shrink-wrapped software are in the process of being supplanted by NGS, UHPLC, and SAS. (next-generation sequencing, ultra-high pressure liquid chromatography, and software as a service, in case you were curious). People still need to buy stuff, just not the old stuff.

• The easiest way to get a sense of market reorganization is to look at some external factors. If the squirrels had realized that last year’s super-abundance would be followed by a lean year, they could have been better prepared (though this, of course, is beyond their walnut-sized brains). Trade show attendance, funding agencies’ programs, M&A activity, and capital raising are all good indicators of where the action is… and isn’t.

So when your dependable sources of nutrition are disappearing, be sure you know where to find your next pile of revenue. Like the trusty annual crop of acorns, things will change and you will need to adjust your diet.

I went timber cruising last weekend. No, this is not aimlessly driving the back roads of New England, but rather, walking around the woods selecting trees for next year’s firewood. I take little pink ribbons and tie them around the trees that will eventually keep us warm during the blizzards of January 2012.

Though the forest has over 100 trees per acre, I don’t just pick the first 30 trees I see. I have another objective beyond just cutting firewood – I also want a healthy and robust forest that supports a diverse range of wildlife. I actually see many companies in a similar situation – an overstocked portfolio of products and applications, and struggling to support and grow them all. For those folks, it is time to apply some well-directed timber cruising.

The starting point for the selection process is actually in the future. Ask the question, “where do we want to be in 5 years” (or pick your favorite horizon.) For the East Woods, I am looking 10 years down the road at big trees able to fend off beetles and ice (see Dec 2008.) Similarly, your business first needs to define its long term goals, be they top line growth, strategic partnerships, near-term profits, market position, or exit.

Once you have the bar set, it is somewhat straight-forward to go through your opportunities and find the ones to pursue. There are a few big slices you can take that will get you well on your way.

• First which applications have a sizeable market that the product can address? When I size up a tree I prefer to take a fatter one that will yield much more wood with only incrementally more effort that a skinny one. Also, a red oak will produce heat much better than a white pine.

• Second, can you actually get your products to the customers who will benefit from them? Though I may find some nice oaks way out in the woods, if I can’t get them to my house without a Herculean effort, then it is a lost cause.

• Third does your offering solve a problem that is really important to the customer? Many nice-to-have products have sounded great only to languish on the shelves. When I plan to take down a tree I always consider how much more light and nutrition will fall on its neighbors if this one is removed. Energy and food, along with water, are the primary currencies of growth in the forest.

• Lastly, will your selection make the company better off in the long run? Can you leverage this product for follow-on applications and build the company around this. When I look at the trees, I always select the weaker, crooked trees and leave the strongest and straightest. They will grow faster, produce more nuts (offspring, food), and look nicer.

So while you ponder all the wonderful products and opportunities you have, remember that if you cull out the weakest, the strongest will flourish from the additional sunlight (resources) and nutrition ($$). With this accomplished, your woodlot of products will be strong, robust, and fast growing, just like the East Woods.

Similarly one of the biggest problems with forecasts is that the risks are usually ignored.  If we look at avalanche safety, there are actually some good lessons to apply to forecasting in general.  Whether it is the next quarter sales or the market size in 2010, the downside of forecasts is usually given short shrift.  Maybe it’s that we are all optimists, but reality eventually will win out.

• One of the first things to realize is that an avalanche forecast is an assessment of the level of hazard; it is the chance that something (in this case, bad) will happen.  Similarly the 14% revenue growth next year is a wonderful forecast, but it needs to be framed within the likelihood that it will happen.

• Once you have the avalanche forecast in hand, travel in the area requires that you have complete awareness of your surroundings.  The initial action is to look for obvious clues that will help reveal the amount of hazard.  Signs of recent avalanches and cracking snow are foreshadows of trouble.  Similarly when the revenue starts to veer off the forecast, you need to heed this warning and take action.  If sales cycles get longer, then your ears should perk up.  Also if you are ahead of plan, first smile, then ask why.

• You can use test slopes or dig snow pits to assess the stability of the snow pack.  When building the forecast you obviously spent time doing the right things such as talking with potential customers, and looking at historical data.  However, after the forecast is set and people are moving with these goals in mind, it is still important to be testing the slopes to better understand the certainty.

• Safe travel in avalanche terrain is critical to being on the right side of things.  Stay away from cornices, travel one at a time, and have an escape route planned.  When creating and then operating on your forecast, be sure to look at alternatives.  Have contingencies in place for surprises that happen in either direction.

• The last subject is, of course, deciding what to do if you or a friend gets caught in an avalanche.  Statistics are not on your side so I won’t belabor this scenario.  Clearly avoidance is the overwhelmingly preferred path to take.  But only by taking heed of the level of certainty and risk in the forecast will you safely reach your destination.

So, when you finally put the pens down and declare your forecast for next quarter solid, be sure to keep in mind that you are traveling in avalanche terrain.  Great joy (and success) can be had if you maintain perspective on the risk and keep a vigilant eye on your surroundings.