5 Things a Company Needs to Scale
There's a big difference between a business that runs well and a business that can scale.
Ultimately, a business that is going to last in the marketplace needs to do both. But what matters most for a scaling business is that customers are buying their products like hotcakes.
I recently had a great conversation on the EO Boston podcast, Leadership in Action, about what it really takes to scale a business. Here are my top 5 things you need for scale:
5 Tips to Scale Your Business
#1: Get good at business operations
What, didn’t I just say business operations don’t matter? Not exactly.
Operations may not be what drives your ability to scale, but it is the thing that will eventually hold you back. It’s common for businesses that are growing quickly to lag behind in operational efficiency—they’re moving too rapidly for their systems to keep up.
But eventually, not being able to deliver on an operational level will slow down your momentum or cause your growth to plateau.
Operations is relatively “easy” to fix, and I don’t say that lightly. Growing a business takes effort, and there are challenges with implementing even the fundamentals.
The good news is that there are several well-defined, systematic approaches, including our GROWTH system, that can help your company become operationally strong.
#2: Hire people who are smarter than you
When you want to scale, you don’t want to reinvent every strategy and system from scratch. You want to work with people who have actually scaled before.
These senior leaders will tell you what to expect on the journey, what traps to avoid falling into, and how to maximize the opportunities that crop up along the way. In other words, you want people on board who are smarter than you—especially if this is your first rodeo.
There are challenges to hiring amazing people. One is that it’s hard to let go of being the smartest person in the room (you won’t be anymore, at least not outside your zone of genius). Another is that good people are hard to find right now.
And finally, the biggest challenge to hiring is, of course, CASH. Been-there-done-that leaders don’t come cheap, and you may need to hire ahead of where you are financially (but not too far ahead), which involves risk.
#3 and #4: Develop a great value proposition and use it everywhere
Oh, strategy: the biggest challenge for growing companies. Strategy is hard, which is why some business operating systems ignore it. Not every company needs an in-depth strategy—but scaling companies do.
To get to that “selling to customers like hotcakes” stage, you need to be extremely clear about your place in the market. That includes identifying factors like your total addressable market (TAM) and ideal customer. And it includes developing a clear and compelling value proposition.
We differentiate two main types of value propositions:
- Commodity: I do what everyone else does, but I do it faster, cheaper, or better.
- Unique: I don’t do what everyone else does; I do something that’s really different.
This is a VERY brief overview on value props, which deserve and will be getting a much deeper dive in future content. But here’s the point: the value proposition you make has to be extremely clear. And it has to make people want to buy what you’re offering.
Once you develop your value prop, you have to use it. Everywhere. Sales and marketing need to be completely aligned with how you’re positioning yourself in the market. Beat the drum in all of your messaging.
Not only will you solidify your brand identity, but you’ll also get valuable feedback on whether or not it’s effective.
#5: Obsess about customer service
What matters most in a company, especially a scaling company, is that your customers absolutely love you.
I’m okay if customer problems are the thing that keep you up at night. You can lose years worth of trust and credibility in a single interaction. This can be tough for scaling companies because higher churn is often a byproduct of growing quickly.
You may not retain every customer, but you do need to build a culture that focuses on customer service. And you need processes in place for dealing with customer service issues and identifying customer risk.
A simple way to do this is to regularly review each customer and identify them as red, yellow, or green.
Green customers are happy and love you—don’t forget to give them the attention they deserve.
Yellow customers are at risk and need a plan for improving the relationship.
Red customers are in jeopardy and need immediate action, possibly through escalation to senior management.
Satisfied customers are your biggest fans. Unhappy ones are your biggest detractors. If you want to scale, make sure you have more of the former.
Continuing the Conversation About Scale
I had a blast recording this podcast episode with EO Boston, and I hope you’ll take a listen to the rest of our conversation.
If you want to scale, you need strong operations, experienced people, a great value proposition that you use everywhere, and an obsession with your customers.
You also need support. Whether that’s from a peer network, a mentor, or a business consulting firm like ours, make sure you’ve got the right people in your corner to help you on this journey.
If you want to talk strategy for scaling your business, contact us to speak with one of our consultants today!