A bestselling author shares his rules for scaling up with the minimum effort and the fewest growing pains.
Scaling Topics: Mis-Fits, Expertise, Small Teams, Structure, Loyalty, Mess, (+) + (-), Mindset, War.
KW RE Ord Scaling
My editor asked me for a list of things that startup entrepreneurs should address early on, in case they turn into problems as a company grows. Since Scaling up is not my area of expertise, I asked Stanford professor Robert Sutton, co-author of “Scaling Up Excellent”, Getting to More Without Settling for Less to help out. Here’s my take on what he told me:
1. Dump the Mis-Fits asap. They’ll give you fits.
Nothing drags a growing company down than negative people and their negative behavior. Author: “Destructive team members, laziness, incompetence, nastiness, stealing, etc. are many times more powerful & contagious than their positive counter-parts. A single destructive team member brings down performance 30% to 40% because their nastiness or incompetence is contagious and distracting.”
2. Connect your Points of Excellence. – Expertise.
As you identify parts of your company that are doing great work, have other groups in the company learn about and learn from them. The Author says that’s “What made HP a great company under Hewlett & Packard” (when it saw its fastest growth.) By contrast, when HP bought Compaq, it absorbed Compaq’s worst practices.
3. Small Teams WiN; big Teams Suck.
While you’ll need to add hierarchy, structure & processes, the one thing that you must avoid is the creation of huge teams–the death knell for many a growing firm. The Author says that the “Optimal size of a Team is 4 to 6 for most tasks and as you head towards 10 or more performance drops exponentially.”
4. You’ll need Hierarchy, Structure & Processes.
It’s a complete myth that a company can remain freeform and ad-hoc as it grows. To make this point, the Author para-phrases Chris Fry, the head of engineering at Twitter: “The purpose of hierarchy is to destroy bad bureaucracy. If your people feel as if they are walking through muck, then you’ve got to do something about it.”
5. Create Mutual Loyalty.
For organizations to scale up, they need employees who feel as if “I own the place and the place owns me.” To make this point, Sutton compares IN-n-OUT burgers, which has scaled up and kept its founding energy and the perennially-troubled United Airlines, where employees feel betrayed, mis-understood & mis-used.
6. Confess the Mess, then Embrace the inevitable Mess.
When successful founders tell the story of how they grew their own firms, they tend to blur over the mistakes they made and create a narrative plot where growth seems logical & inevitable. Sutton: “But that is almost never how it is as the company evolves. There are many times when you need to muddle thru, until you figure out what works.”
7. It’s Addition AND Subtraction.
Scaling up doesn’t just mean doing new things to be successful; it also means successful. Sutton cites the case of IDEO whose NOT doing old things that once made you “all hands meetings worked perfectly when they had 40 or 50 employees, but became impossible when they grew to 100.”
8. Focus on Mindset, not Footprint.
Scaling up isn’t a matter of hiring a lot of people, but of creating a culture that draws the right people into the organization. The Author draws the comparison between Facebook, which kept their “move fast & break things” culture and “Starbucks lost focus on their goals and did major damage to the company -which they are still repairing.”
9. It’s a Ground War not an Air War.
There’s no point in the growth of a company where you can focus on grand strategy and let the tactical details take care of themselves. At each stage of growth, it’s attention to details and (especially) putting the right individuals into the right roles that will make the growth possible.
Quotes about Scaling
“Scaling up is every Entrepreneur’s dream — and Nightmare. Hyper-growth is terrifying, and it’s most often success too fast – that kills great companies. —Verne Harnish, Author, Scaling Up
“Scaling Up is organized around the needs a Leader must deal with: People, Strategy, Support, Structure, Execution, & Cash needed.” Jim Collins, best-selling Author of Business books.
“There are no great limits to growth because there are no limits of human intelligence, imagination, & wonder – Ronald Reagan, Governor of California & 40th USA President
“To start your Scaling effort you need to have: 1) a Product or Service of great Value, 2) big enough Market to go for many new Customers, 3) Capital to fund your expansion. Peter/CXO Wiz4biz
“Without continual growth & progress, such words as improvement, achievement, & success have no meaning.” – Ben Franklin
“When are you ready to Scale? 1) you have the Resources to do it, 2) can you offer the same level of responsiveness, support? 3) you have in-place an infra-structure (system of processes) that can handle it. Peter/CXO Wiz4biz
Comments: Do you know any other Rules for Scaling-up your company?
from 100 Female Entrepreneurs 09 Feb 17 enhanced by Peter/CXO Wiz4biz
For more Info, click on Scaling.