According to a study by Bain and Company, only one in seven companies is able to achieve sustainable, profitable growth. One of the reasons this is true is that most companies are simply not prepared for growth. The business is sustainable when it’s small, but then something happens:
Success. And it happens fast.
Of course, this is exactly what the owner wants, but often he or she has no idea how to scale the business during growth, especially during rapid growth. As a result, the company starts to flounder. Because, at this higher level of success, costs skyrocket, inefficiencies create meltdowns and the former sustainability of the organization begins to crumble.
Frankly, this makes us sad. We know that with just a little strategic planning, far more than one out of seven companies would be able to weather the growth storm and come out the other side ready to attain even higher levels of success.
So, how do you know if your company is prepared to scale for growth? Let’s start with the signs that indicate your business is probably NOT ready”
4 Scale-Ready Warning Signs
- Processes are being adjusted by “internal entrepreneurs.”
- When asked why something is being done a certain way, the response is, “Because we’ve always done it this way.”
- The company is “person” rather than “process” focused.
- Quality control is limited or non-existent.
Now, that you know a few “Scale Readiness” red flags, what can you do to be better prepared to scale?
Fortunately, there are several very simple strategies for each of the three areas of operations (Processes, People & Systems) that will help ensure your company is ready to take on growth:
4 Simple Process Strategies for Growth:
- Develop processes that are repeatable
- Document all processes
- Include redundancies in all processes
- Initiate a continuous process review and improvement plan
3 Simple People Strategies for Growth:
- Make business decisions based on business needs
- Institute Pay-for-Performance
- Create a “do it right the first time” culture
5 Simple Systems Strategies Growth:
- Analyze whether or not current systems are optimally supporting the business
- Ensure systems are providing decision-making information
- Get reports on all lines of business
- Keep software licenses up to date
- Include redundancies in all systems
While all this sounds easy enough, it can be hard to implement effective strategies and measure progress, when you are neck-deep in running your business – and before you can afford to bring on an experienced COO.
Taking the time to step back and consider your company’s level of preparedness sometimes requires one of the most valuable strategies you can ever invest in: GETTING OUTSIDE HELP.
Investing in the expertise (internal or external) required to scale can be the smartest business move a growth-focused company can make.
We hope you are the one in seven that makes it.