Building For Scale
From Day 1 to 1000 structuring your business for growth must be a leaders #1 priority
One thing I’ve noticed about lots of companies so far is they don’t build them for scale. Take a Not-For-Profit I was working with the other day (kept anonymous for their privacy). They’ve received significant positive PR coverage including the Huffington Post, Times and the New Yorker. They have obvious problem-solution fit and a passionate base of fans and customers. Yet they can’t seem to grow or gather funding.
What could be the cause?
It’s because the founder hasn’t systemized the business in such a way that she can “raise the level” of the organization and create management units beneath her. Instead, she’s trying to lead every unit at the same time, she’s buckling under the workload and the business isn’t taking advantage of the amazing opportunity it’s gotten. It’s just not possible to manage 55 people at a time and make up the rules for doing so as you go. She needs structure that can grow with her incredible opportunity.
Now if she could systemize what her Not-For-Profit does, create a distinct set of processes that define it, and then create “affiliates” or other motivated social entrepreneurs who could use her model to grow their own organizations under the umbrella of her Not-For-Profit. She could create significantly more impact, and take advantage of the amazing momentum and attention her social mission is receiving in Canada, and the coverage it’s receiving around the world.
With this in mind, I’ve devised a few rules for how one should “build for scale” from the moment they start their company. These aren’t hard rules to follow, but they require a level of discipline and commitment which many first-time entrepreneurs don’t have. See if your organization does any of them, or if you could apply them better.
1. Document Everything: “Transactive Memory” is a measure of an organization’s capacity to communicate information internally and is a key metric of success in large organizations. From the moment of your startup’s inception begin documenting; how things are done, tools used, contacts, customers, where the money’s flowing, and so on. Every data point is a learning opportunity that most organizations miss. Make rate of internal growth your competitive advantage.
2. Foster Leadership: To create distinct business units which operate without your direct involvement you need to create a culture of empowerment and leadership, even if that includes some failure and waste. Easy heuristics for this are to give recommendations not commands, and feedback based on growth and learning, not punishment or control. Use profiling tools like Enneagrams to understand your leaders and insights from behavioral tracking to understand why they think the way they do, and where the opportunities for their growth are.
3. Systemize Your Processes: Most new founders start by sprinting at whatever idea or problem seems the most pressing and became firefighters, rather than commanders, within their business. Start with a system like Disciplined Entrepreneurship or Designing For Growth and let it guide you through the process of starting your venture. Once you’ve learned enough to lose the “training wheels” so to speak, then develop your own structured system, that new hires can be easily on-boarded onto and that encompasses the flexibility innovative firms require.
4. Imbue Your Values: It’s easy to think of the founder’s personality as defining an organization’s culture but that’s only the case when founders imbue the processes and structures of the company with what they value. For instance, if you value innovation but have tight budgets and deadlines with no flexibility you’ll find people only seek to meet the minimum because of their restraints. If you don’t imbue the way your company works from the very beginning with your values, vision, and mission you’ll find it scales away from you. Think about the way Jeff Bezos has new management hires watch videos of him chatting about WHY Amazon functions as it does, and what the overarching mission is. That’s powerful, and creates a consistent, deep culture.
I’ve been designing a game lately. You take an organizational situation like the one above with the Not-For-Profit, and need to make some concise recommendations for how they should solve or approach their dilemma. Maybe you need to define revenue, traction, their value proposition and create a plan of action based off that. You could introduce nonsensical companies and try and create marketing, strategy and operational plans based off making say a tool company whose products must work in zero gravity.