Scaling Up! People, Strategy, Execution, Cash

Goals without routines are wishes; routines without goals are aimless.  Start up, Scale up, Screw up, or Stall out (fail to scale)! (Harnish, 2014) 

The life cycle of businesses is either driven by leadership to scale, or it is reactive and either screws up or stalls.  The key to scaling is:

• Attracting and keeping the right People; 

• Creating a truly differentiated Strategy;

• Driving flawless Execution; and

• Having plenty of Cash to weather the storms.

So, what are three barriers to scaling up.   First, is leadership.  The inability to staff/grow enough leaders throughout the organization who have the capabilities to delegate and predict.  Second, is scalable infrastructure.  The lack of systems and structures (physical and organizational) to handle the complexities in communication and decisions that come with growth.  Third, is marketing.  The failure to scaleup an effective marketing function capable of attracting new customers, talent, advisors, and other key relationships to the business.

What can you do to overcome these barriers?  There are four fundamentals:

• In leading People, establish a handful of rules, repeat yourself a lot, and act consistently with those rules.  This is the role and power of Core Values.  If identified and used effectively, these values guide all the relationship decisions and systems in the company.

• In setting Strategy, make sure it passes two tests:  First, what you're planning to do really matters to enough customers; and second, it differentiates you from your competitors.

• In driving Execution, implement three key habits:  Set a handful of priorities (the fewer the better); gather quantitative and qualitative data daily, and review weekly to guide decisions; and establish an effective daily, weekly, monthly, quarterly, and annual meeting rhythm to keep everyone in the loop.  Those who pulse faster, grow faster.

• In managing Cash, don't run out of it!  Pay as much attention to how every decision affects cash flow as you would to revenue and profitability.

When you think of scaling your business, it's like climbing a mountain.  Not that I've done this, but think of this simple analogy, many people dream of summiting Mount Everest (or its equivalent in their life).  Those who do it create a plan.  Prepared with a set of unbreakable rules(think Core Values) and a passion for the journey, they head toward the summit.  Along the way, they aim for a series of camps:  intermediate waypoints normally marking significant changes in terrain.  Then it's a matter of focusing on the next day, and more important, the first and subsequent steps, making adjustments along the way as the mountain conditions dictate.  Those who have made such personal journeys report that it's ultimately about staying acutely aware as you push to take just one more calculated step.  

It's the same for an organization.  Guided by a set of Core Values and a Purpose, it chooses a Big Hairy Audacious Goal ("BHAG") to achieve in the next 10 to 25 years.  To break up the journey, the leadership team sets a series of three to five year targets divided up into annual goals.  These are further broken down into specific actionable steps the business takes over the next few weeks or months, adjusting tactics as the market conditions dictate. 

In the end, it's about keeping everyone focused on the summit ("BHAG") and then deciding the appropriate next step (quarterly priority) while respecting the rules (core values) that keep you from being swept off the mountain - keeping in mind Bill Gates' note that "most people overestimate what they can do in one year and underestimate whay they can do in ten years."

Everything in between this quarter and the next 10 to 25 years is a "WAG": a wild-ankle guess!  There are no straight lines in nature or business.  As a winding river must follow the contours of the landscape on its way to the ocean, a business must navigate the waves of the marketplace ocean on the way to its Everest.  The key is keeping your eye on the prize and adjusting your course accordingly.  Remember, along the journey there is a set of habits that will make the climb easier.  "Routine sets you free." (Harnish, 2014)  You may set a goal to lose weight, but unless you change some daily and weekly routines, it will never be accomplished.  

Harnish, V. (2014). Scaling up how a few companies make it... and why the rest don`t ;. Ashburn, VA: Gazelles.

Jayne McQuillan, CPA, MBA, CEPA is a strategic management consultant, and the owner of Journey Consulting, LLC, in Green Bay