Operational Scalability: Alex Brueckmann On How To Set Up Systems, Procedures, And People To Prepare A Business To Scale

Cultivate a culture of innovation: Encourage creativity and innovation within your organization. Reward and recognize employees for innovative ideas that can improve products, processes, or customer experiences. 3M is known for its innovative products, and encourages a culture of innovation through their “15% Culture.” This initiative allows employees to use up to 15% of their work time to pursue projects of their choice outside their regular responsibilities. One of the most famous outcomes of this policy is the invention of Post-it Notes, which has become a globally recognized and widely used product.

In today’s fast-paced business environment, scalability is not just a buzzword; it’s a necessity. Entrepreneurs often get trapped in the daily grind of running their businesses, neglecting to put in place the systems, procedures, and people needed for sustainable growth. Without this foundation, companies hit bottlenecks, suffer inefficiencies, and face the risk of stalling or failing. This series aims to delve deep into the intricacies of operational scalability. How do you set up a framework that can adapt to growing customer demands? What are the crucial procedures that can streamline business operations? How do you build a team that can take on increasing responsibilities while maintaining a high standard of performance?

In this interview series, we are talking to CEOs, Founders, Operations Managers Consultants, Academics, Tech leaders & HR professionals, who share lessons from their experience about “How To Set Up Systems, Procedures, And People To Prepare A Business To Scale”. As part of this series, we had the pleasure of interviewing Alex Brueckmann

Alex Brueckmann is an executive thought partner, strategy facilitator, speaker, and author of The Strategy Legacy: How To Future-Proof A Business And Leave Your Mark, and Secrets Of Next Level Entrepreneurs: 11 Powerful Lessons To Thrive In Business And Lead A Balanced Life. He talks about the power of strategy and identity, transformation leadership, purpose, impact, and legacy. Brueckmann has impacted thousands of business leaders across the world, from multinationals to start-ups.

He is an alumnus of EBS European Business School (Germany), and holds certificates in change management, leadership, finance, organizational development, and strategy from INSEAD (France), and Harvard Business School (USA).

Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

If you want to go way back, I started my professional career in the 1990s as a music journalist and radio host. In my late 20s I became more curious about business strategy and leadership, and I shifted from the content creator side to the management side. After a few years in big corporate the consulting world became my thing and eventually, I built my own company in the strategy facilitation space.

It has been said that our mistakes can be our greatest teachers. Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

One of the most powerful learnings came from assuming I understand my clients. I ended up in a situation where I was frustrated with the progress — or lack thereof — we made in a client project. What I felt they needed was not what they thought would be the right next step for them. I learned that I’m not my own client and that I needed to listen more, and on a much deeper level. Not sure this was a “funny” mistake, but definitely a humbling experience and a great reminder to first try to understand, and then to be understood.

What do you think makes your company stand out? Can you share a story?

What both Fortune50 and Inc5000 executives tell us is that they feel we get them. What they mean is that we understand their specific cultural traits and the challenges they are dealing with, both individually as leaders and collectively as an executive team. From fast-growing startups, we hear things like ‘We want to define what leadership means and it doesn’t make sense to do this without you’. And big corporate execs tell us things like ‘you hold us in the palm of your hand and create the space for deep strategy conversations’. This type of value creation makes me very proud.

You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?

First, enjoying the discomfort of being a beginner and learner. I’m constantly learning new things and I allow myself to be a rookie and make mistakes. It takes the pressure off and makes learning a fun experience.

Second, being intentional with everything you do: when I vacation, I vacation. When I work, I work. When I spend time with my child, that’s what I do. With that comes the ability to say no to 95% of opportunities along the way, to make the space for what you want. This is the best recipe against unfocused hustling and exhaustion.

And third, stamina: any overnight success has been a decade in the making. Keeping your goals front and center and allowing you to stack up your wins is critical in the long run. Solving problems and overcoming barriers teaches us perseverance and resilience.

Leadership often entails making difficult decisions or hard choices between two apparently good paths. Can you share a story with us about a hard decision or choice you had to make as a leader? I’m curious to understand how these challenges have shaped your leadership.

In March 2020 the first wave of the Covid-19 pandemic brought the world to a full stop. I had just lost my father to cancer and welcomed my first child, and we were supposed to move from Germany to Canada in April. Under complete uncertainty, during a lockdown, and in an environment of fear, I had to decide — literally overnight — whether we try to move now — or wait it out and move when things calmed down. Both options, staying and leaving, came with uncalculatable risks. The risks of staying were less unpleasant but more certain to materialize than the potential risks of moving. So we made the leap. This experience made me realize that leadership is about pushing forward, especially in tough situations, where failure is not just a theoretic option, but a real threat.

Thank you for all that. Let’s now turn to the main focus of our discussion about Operational Scalability. In order to make sure that we are all on the same page, let’s begin with a simple definition. What does Operational Scalability mean to you?

At its core, operational scalability is the ability of a business to handle changes in demands and workload without sacrificing performance, reliability, or quality of service. It involves designing and managing systems, processes, and resources in a way that allows them to seamlessly handle volume changes, for example in their user base, data volume, or transaction frequency.

Which types of business can most benefit from investing in Operational Scalability?

Obviously, any business that runs on a technology backbone, from e-commerce to SaaS, banking, EdTech, etc. Industrial manufacturing is a prime example as well, where scalability is a challenge both in times of growth and shrinking demand.

Why is it so important for a business to invest time, energy, and resources into Operational Scalability?

In recent years we’ve seen various events that triggered chances and disruptions for several industries. During and after the Covid-19 pandemic we experienced an uptick in e-commerce, supply chain disruptions, retail store closures, and more. Due to a scalable operational model, e-tailers were able to harvest profits triggered by changes in shopping patterns. Retail stores on the other hand have a different model. Especially in downtown areas, many struggled to remain profitable when a rise in remote work led to reduced customer traffic. The current downtown San Francisco retail exodus is partly triggered by the limits of operational scalability of the retail business model.

In contrast, what happens to a business that does not invest time, energy, and resources into Operational Scalability?

In simple terms, if a business does not have scalable operations, it will struggle to react to changes in customer demands without potentially existential threats to its business model. Take the banking sector for example: banks handle vast transaction volumes. The operational scalability of their systems ensures that they can handle growing transaction volumes without operational bottlenecks, increased costs, and potential service disruptions. Banks that fail to build secure and scalable systems suffer from inefficiencies that reduce their profitability, which will impact their ability to grow their business, meet evolving regulations, and maintain competitiveness. For other industries, similar chains of events apply.

Can you please share a story from your experience about how a business grew dramatically when they worked on their Operational Scalability?

An Inc5000 company I work with has identified the scalability of its core product as the biggest growth enabler, both nationally and for its international expansion. During a recent refresh of their business strategy, the executive team decided to dedicate major resources to ironing out any bottlenecks that could impede the customer experience. They expect to 10x their business in the coming three years as a result of preparing their operations for scale.

Here is the primary question of our discussion. Based on your experience and success, what are the “Five Most Important Things A Business Leader Should Do To Set Up Systems, Procedures, And People To Prepare A Business To Scale”? If you can, please share a story or an example for each.

Make operational scalability a strategic priority:

Ensure that scaling operations is not just a reactive response to growth but a proactive and integral part of the business strategy. Amazon, for instance, made scalability a fundamental aspect of its business model. From the early stages, Jeff Bezos emphasized scalability to handle the rapid growth and demands of an expanding online retail market. Amazon’s focus on scalable infrastructure and systems allowed them to accommodate exponential growth and diversify into sectors beyond e-commerce.

Build a strong leadership team:

As the business grows, having a capable leadership team in place is crucial. Select individuals who not only have the right expertise and experience but also align with the company’s values and vision. Among other factors, Facebook’s early success can partly be attributed to Mark Zuckerberg’s ability to build a strong leadership team that drove the company’s growth.

Empower and enable employees:

Provide training and resources to employees to enhance their skills and capabilities. This empowers them to take on different responsibilities as the business grows. The Inc5000 business I mentioned earlier made employee and leadership development a core facet of their strategy. They are preparing everyone in the business for the changes and challenges that will come their way as the business grows.

Focus on operational excellence:

Streamline operations and eliminate inefficiencies to maximize productivity and output. Use applicable methodologies to identify and eliminate waste in your processes to avoid waste growth with your scale. Toyota is a pioneer in operational excellence and continuously refines its manufacturing processes to improve efficiency and quality.

Cultivate a culture of innovation:

Encourage creativity and innovation within your organization. Reward and recognize employees for innovative ideas that can improve products, processes, or customer experiences. 3M is known for its innovative products, and encourages a culture of innovation through their “15% Culture.” This initiative allows employees to use up to 15% of their work time to pursue projects of their choice outside their regular responsibilities. One of the most famous outcomes of this policy is the invention of Post-it Notes, which has become a globally recognized and widely used product.

What are some common misconceptions businesses have about scaling? Can you please explain?

Scalability goes two ways. Operational scalability done right enables a business to grow massively. When times are tough, it also helps a business to contract without damaging the customer experience. Also, scale as such is not necessarily the most relevant metric. For many businesses, profitability is more important than scale. Of course, they often go hand in hand, where operational scalability drives profits (the famous economies of scale). As Dr. Herman Simon famously said, no company ever went broke turning a profit. But many companies went bust pursuing scale at all costs. That’s why in the end profit is king, not scale.

How do you keep your team motivated during periods of rapid growth or change?

As they say: dig the well before you are thirsty. Preparing employees for change needs to happen before the change actually occurs. When they know how to react and cope with rapid growth or transformational change, the likelihood of them sticking with you is way higher.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

Don’t go for second best, baby! A Madonna song reference from “Express Yourself”. It reminds me that you should never settle for less than what you feel is achievable. When I had to choose which university I wanted to attend, my back-then girlfriend threw these lyrics at me, which eventually set me on the path that led me to fall in love with business strategy and helping my clients to future-proof their businesses.

You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

Long-term, I think the “most amount of good to the most amount of people” will turn into “the least amount of suffering for the least amount of people”. It’s no secret that if we continue to abuse our planet, we will increasingly suffer the consequences through rising temperatures and ecosystem disruptions. If I could start a movement, I’ll start shrinking the human population as a way to reduce humankind’s negative impact on Earth’s resources, climate, and nature. I know this is an unpopular opinion as shrinking populations have consequences on how our economies function. We can adjust how economies function. But we can’t adjust how ecosystems function.

How can our readers further follow your work online?

Visit https://brueckmann.ca to enjoy free resources like my newsletter Building Bridges, or my strategy masterclass and more.

Thank you so much for sharing these important insights. We wish you continued success and good health!