I so enjoy my Authority magazine interviews. Not only do I get to really think about how to grow a business, change your culture, be an effective leader or become successful as a woman entrepreneur, I get to share my thoughts with all kinds of business people, either established or emerging. I love it! The most recent installment was part of the magazine’s interview series, “5 Things You Need To Know To Successfully Scale Your Business.” You can read the entire interview here.
Watch this short video on 5 things you should know to grow a business
So how do you successfully scale a business?
Say you’re a small startup. How do grow to a midsize and then a large company? When asked this by Authority magazine, my answer was that as an anthropologist, I help organizations do something that people hate to do: change. When it comes to scaling a business, change is involved. The resistance to this often comes from people not realizing that more of the same, even cheaper, is not an effective strategy. This is particularly the case when the times are changing, and fast (like today). What I have learned in my own career is that you’ve got to keep your ears open and your eyes scanning the horizon for opportunities that are coming your way. They just might be the answer to the growth you’re seeking.
The 5 most important things to know if you want to grow
Here’s a shortened version of my answers to the above question:
1. Strategy, strategy, strategy. Regardless of the size of your business, if you want to grow, and scale for the future, take the time to assess your business strategy. Learn about “red oceans” where you are competing and “blue oceans” where you are creating. It is not a good business model just to be better than the rest. It is much more important to make sure you are meeting consumers’ unmet needs and attracting non-users who will sustain your growth. We are trained practitioners in Blue Ocean Strategy®. Having worked with too many companies trying to be a little better than the others, we caution our clients and the reader to think about your business from the outside in. What is the market, and is it growing so that you can create a new market space fulfilling unmet needs with innovative solutions?
2. Hire the right people, then train and prepare them for the future. If you are going to grow your business, you need to recognize that people are your most important asset. Think about what type of person you want on your team, both short and long-term. Do you need someone with attention to detail, a creative forward-looking person who stretches the bounds of your thinking, a self-starter who can work independently?
3. Don’t let the ideas alone drive the business. As we work with entrepreneurs, we have learned quickly how they love their ideas and how they get frustrated when staff or investors refocus them on processes and data. Of course, entrepreneurs and business owners are proud of their ideas, but to capture markets and sustain their growth, they need to also focus on the business model itself. Are they developing processes and systems to scale for future business? Are they designing data capture systems and analyzing the information and insights to ensure they are hitting the targets needed to support their investments? How are they evaluating different ideas, mergers/acquisitions and new products to ensure they have the right ones coming together at the right time?
4. Know what funding you need to scale for growth. The lack of available funds can slow down or even kill a business, much less the scaling process. How much do you need and when? What are your sources of funds? How knowledgeable are you about different sources and uses of capital? We often find that the creative leadership of a company lacks the financial expertise needed to run and grow the company. Think carefully about your strengths and limitations related to financing. Everything is in the numbers.
5. Timing and pacing for growth. Develop realistic time frames. Figure out what is a realistic goal. Then work backward to determine the viability of the goal. Often you will have to adjust that scaling goal as you begin to understand the deliverables at each stage and the complexity to accomplish the goal.
3 common mistakes companies make when trying to scale their business
1. The company thinks its current skills are the right ones for scaling its business.
2. The why’s and how’s are missing in their strategy.
3. They are thinking inside out, not outside in. Growth is about serving others, not building the factory.
4. They are growing to compete, not create. More of the same, cheaper, is not a good strategy for growth. Scaling a company should be associated with creating new markets.
How do you preserve the company culture when new people are brought in?
As culture change experts, we spend a great deal of time with clients assessing and building their cultures. Far too often, people don’t know what their current culture is, and how the values, beliefs and behaviors of new hires will fit or not fit into it. When you are scaling an organization, it’s important to begin with an assessment of your existing culture so you know what you want to preserve, change, eliminate or create. Try using www.ocai-online.com, a culture assessment tool we frequently use.
Once you understand your current culture (the way you do things today), and if you want to preserve it, you need to develop a definite process to introduce and embed new people into the company. It is not sufficient to onboard someone for a few days and hope they get it. It will take time for them to understand how best to navigate and operate within your culture.
When scaling your business, take time to assess where you are today, the skills you have for growth, and the reasons why you want to grow.
If you are going to “live this story” that is in your mind about how big this company can become, make sure you are not making up a myth about it. Is the future image of your company realistic? Can you realize scale through organic growth, or do you need to acquire other companies? What skills and talent do you need in your staff, your teams, and your outside supporters? This is not a job for one person. Be brave and think beyond “I” and consider the “we” who are needed to make your company the one you want it to become.
From Observation to Innovation,