One of the top challenges a company faces is figuring out how, and often when, to grow. Let’s clarify one thing up front. You probably aren’t interested in growing as a company. No. You want your company to scale. I’m not talking that hockey stick scaling of your revenue (that’s nice too – don’t get me wrong); I’m talking the addition of people and services to your company which it needs to accomplish its business.
Before we jump in we need to answer one key thing: what’s the difference between growing and scaling? The team at Fundable says it best. “Growing means you are adding resources at the same rate you’re adding revenue.” When you add revenue, you hire. You add more revenue, you hire more. It’s nearly a one-for-one trade of revenue for people. We often think of consulting or professional service firms as growth companies. Your growth is linear – you’re not scaling.
Scaling on the other hand is “adding revenue at an exponential rate while only adding resources at an incremental rate.” When you add revenue, your first instinct isn’t to go out and hire; rather, you’re calculated on when (and whom) to hire. We often think of internet companies as companies that scale. Your ratio of revenue to resources is that of a scaling organization.
When you look inside your company, there are three main levers that impact your company’s ability shift from a growing organization to a scaling one. I call them the 3 P’s.
- People are the foundational pillar of a strong organization. It’s essential you have the right people doing the right jobs at the right time. They are the heart of your company and are your greatest asset. They are also your biggest expense.
- Process (or lack thereof) can hamper your business’s growth. You need to strike the balance in having processes which enable you to work more efficiently without adding an undue burden to your team. The right processes can return exponential value to your business.
- Policy becomes the tool to further ingrain practices and procedures into your business. You can leverage policies to cement your business rhythm and shape how your business will continue to flourish. Having the right organizational structure and flow can ease the scaling process.
A growing company focuses on one, maybe two of the P’s. Yes they will experience growth – but they won’t scale.
Individually the P’s are strong; however, when combined they bring an amazing scaling force into your business.
People + Process + Policy == Culture
When your organization scales and changes, so does its culture.
Every organization has a culture that carries weight and adds value as it scales. As a leader, you want to ensure your organization has a healthy and inviting culture that welcomes a scaling mindset.
Scaling means paying attention to your organization’s evolving culture and staying in-tune with the impact it has on your success.
A solid foundation of the 3 P’s builds a mighty culture which will drive your business to successful scale.
Another way to look at this is:
- Have the right people.
- Do the right work correctly (process).
- Reinforce your organizational structure (policy).
- Drive and embrace culture.
Each has an impact on the other and by noting successes, correcting for failures, and measuring progress — your business will scale.
No one will say this is easy; however, with persistence, dedication, and focus you can drive the success your organization needs.
And it starts with the People.