Actually, that isn’t the question. The question every business owner really needs to ask is: When and how should I scale?
Scalability is the ability to maintain performance and deliver quality products as a company begins to take on more customers, hire new people, and expand in its market, with or without increased resources.
Scalability done right will fast-track your business to increased revenue and success. However, scalability done wrong, or at the wrong time, will ultimately lead to failure.
Companies that successfully scale have better cash positions, outperform competitors and are better able to weather the storms that inevitably come in business.
But scaling up brings its risks!
To Scale or Not to Scale (right now)
So that brings us back to our philosophical musing: To scale or not to scale? Or rather, when and how should I scale? Whether or not you should, isn’t under dispute. Clearly, your business MUST scale if you are going to succeed in the long run. Not scaling up contributes to going nowhere or failing completely.
Investors are increasingly demanding higher profits from increased growth. Finding talent and retaining skilled employees in a tight labor market is becoming more and more difficult. Scaling your business can help you achieve both of these goals!
However, scaling prematurely, without a structured framework, is clearly a danger for your company. In fact Mckinsey and Company’s analysis further states “The scaling challenge comes not just from the nature of the company or the products themselves: behind every failed attempt to turn around an outdated business model, capture the benefits of an important acquisition, or scale a tantalizing start-up, there is probably some mismanagement of some aspect of talent, organizational culture, or operating model.”
Remember that scalability is the ability to meet increasing demands with the same quality and service that you always have, often without a substantial increase in resources.
“Processes need to be clearly defined, understood by employees, and easily replicated to maximize output!”
Many promising businesses, whether large or small, ultimately run into the scaling dilemma. They have a successful product, brand recognition, repeat customers, stable employees, and lots of enthusiasm for the future. However, perhaps in an effort to keep start-up costs low, or possibly from initial inexperience, these same companies will have several different unintegrated software platforms and haven’t put a lot of time into the organization and coherence of processes within the company.
Here’s the critical juncture. It may seem like it’s time to scale, but scaling is largely about efficiency and alignment of people, purpose, processes, product, and performance. Scalability means maximizing your resources while minimizing your input. As we’ve been discussing, without clear and concise internal collaboration, role clarification, and well-understood and followed actions, this type of efficiency just isn’t possible.
Simplify, Simplify, Simplify!
Growth without organization leads to increased complexity! Increased complexity leads to confusion, misunderstandings, burnout, decreased quality and production, and ultimately, unsatisfied consumers.
When you scale your business successfully, you don’t simply grow; rather, you maximize! Processes need to be clearly defined, understood by employees, and easily replicated to maximize output!
You need to be prepared to introduce scaling in a way that considers every aspect of your business and how it will be affected by your trajectory.
Companies frequently scale only one part of their business, out of sync with the rest of the processes. For example, imagine you decide you are going to aim to produce 200 personal jetpacks per week instead of your usual 100 per week. You’re scaling up your production, right? But if you don’t also scale up manufacturing equipment and hire more employees, or restructure existing processes in some way, your stable employees are going to be out the door when they get tired of 15-hour workdays 7 days a week.
Where do I start? That’s the question now!
You know where this is going, right? You’ve got it! Here at Effective Performance Strategies, we specialize in aligning People, Purpose, Product, Performance, and Process. You need clarity and organization to begin your process of scaling up and we are the people who will help you do it! Allocating resources to organization, documentation, and alignment now will give you an increased return on investment in the future! Book Your Strategy Call Today!
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