Scaling Up: 6 Ways to Turn Growing Pains into Growing Gains
When Tim Forrest started working with a food company client, he knew that he faced a challenging revenue curve. “The company had fallen short of their sales goals,” he said, “but I developed several avenues for growth that ultimately got them back on track.” In the process, Forrest -- a recognized leader in food industry sales and marketing – triggered an additional challenge as well. “The company was very happy with their growing revenue but they also needed to quickly figure out how to support it. Scaling became their next opportunity.”
Whether the impetus is the rapid growth of a start-up, added revenue from a new product or market, or sales ramping from a strategy pivot, the energy and urgency of scaling up is both exciting and daunting. The need to scale up is, as the saying goes, a high class problem. While each circumstance is different, the challenges of scaling up often fall into three broad categories: what you do, how you do it, and who you are. In other words: Strategy, Process, and People.
Successful scaling requires an ability to translate the essential elements of the business onto a bigger operation while ensuring that the necessary changes are truly additive. For certain, things will need to change. On a spectrum, effective scaling will require moving a bit from casual toward more formalized, from spontaneous toward deliberate, from organic toward structured. However, it’s not necessary for the company to lose its identity. Instead, think of scaling as evolution by making conscious choices. Making conscious choices about that evolution will help mitigate the biggest issue of scaling up: rising complexity.
In my experience, scaling up is a design challenge that covers all facets of the business. And from personal observation, I believe that the leadership skills required to scale successfully are different from the expertise of the launch phase. In a prior post, I covered The Honest Kitchen’s scaling journey from the owner’s home to a $40+ million revenue company. This time, I offer a framework to help business leaders navigate a similar trek.
Here are some ways to rally the team to scale up effectively while also managing complexity.
- Keep the why. In other words, your mission is central to the whole process. Scaling up can bring new people, new process, new partners…but the mission should guide it all. Patagonia’s mission is to “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” It’s pretty easy to see how that informs everything they do.
- Get your priorities straight and make them clear to all. In situations where speed is important, time and capacity are usually tapped…and people are stressed. Make sure to understand what’s most important and keep the team’s attention on that. Clarity in priorities as you move has an amplifier impact. When I moved from VP marketing to CFO of a public company, my team was facing an overwhelming storm: ERP implementation, acquisition integration, new SEC regulations, and an ill-fitting debt structure. In those times, I believe that the best thing you can do is pump the brakes and prioritize. Here’s my post that covers what we did.
- Understand your organization’s current capabilities and focus on what you do best. Seeing your company grow and feeling confident about its future is understandably gratifying. For some, it’s tempting to broaden the company’s internal capability by bringing functions in house. I’m a believer in adding fixed overheads gradually so I always advise owners to focus on what they do best and beg, borrow, share, or rent the rest.
- Understand who your customers are and why they buy…and then focus on building long-term demand. Once you get so far involved a business, it’s easy to lose objectivity and to think you know without even asking. When Jack Haldrup started a men’s natural soap company, Dr. Squatch, he thought he had a pretty good idea of who his customer would be. His company is growing rapidly but his main customers are different than what he expected. He’s now focusing on building long term demand with his actual customer base not his expected one. From a scaling perspective, selling more to the same or similar customers can be more efficient than finding new ones.
- Understand the most important aspects of the employee and customer experience…and make sure you can continue to deliver on them. Former Scandinavian Airways CEO Jan Carlzon called these “moments of truth.” Every point of contact is an opportunity to reinforce the relationship or a risk to damage it. From online ordering to in person sales, from packaging to delivery, make sure that you’ve got it covered. Jeremy Leifheit is an expert in customer and guest experience training and development. “My advice is to specifically define the experience that you want customers and employees to have with your organization…and then craft scalable training processes that enable your teams to replicate it. Planning and training have a big impact.”
- Have an organization plan that matches the broad strokes of your vision. Though the proverbial five year plan may be a thing of the past for many companies, most have at least a rough revenue goal they’d like to hit. I suggest breaking that into increments and then considering the capabilities and capacity needed at each interval to support the growth. This framework can help you anticipate needs and enable you to screen infrastructure choices. Each situation is different, of course, so the needs as you scale are also different.
Applying the above tactics to your scaling journey will help ensure that the company receives the operational benefits of growth while mitigating some of the side effects.
Mike Irwin is a mentor, advisor, and strategist. Drawing from his past as a startup co-founder/President, executive officer of a $1+ billion market cap company (WD-40), public company CFO, VP Marketing, global chief strategy officer, head of sales, and board member, Mike uses his diverse background to help companies grow sales, improve profitability, and scale up. He serves as an advisor, consultant, fractional or interim CEO/GM/MD, and on boards of directors. He’s also a community volunteer, youth sports coach, author, cyclist, and marathoner. Follow him at BottleRocketAdvisors.com, get in touch at firstname.lastname@example.org or connect on LinkedIn.
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