Growth is more. Growth is when we obtain higher levels than we previously obtained. Sales higher than last year? Profits great than last quarter? Selling more than last season? You are experiencing growth
Scale is growth mixed with efficiency. Its more, but with less or no additional inputs. I can get more sales, but buying more advertising. Ever time I want more, I turn on the spigot. Scale is writing a how to that delivers prospects month after month with no more work. Scale is getting growth with having to put in equal additional amounts of energy, money, and time.
We all want to grow, but most of us do it by working more, calling more, asking more, and investing more.
This is and extremely short term mindset.
Working longer and longer hours has a hard cap at 24. Once you reach this, there are no more hours to work. You are capped out. So if your growth is based on working an extra hour or two on the weekends, or staying late… you are playing a limited game. Soon you will find yourself with no more time to work, and worse, no time to develop scale.
Many small companies are working towards growth… few of them are building scale.
How to Develop Scale
Developing scale requires a change in mindset. Rather than thinking about what more you can get done, you think about what you can build that
- will continue to work when you aren’t
- will lower your time to accomplish
- will reduce your cost to increase
In short, you want to build things that will support new growth permanently. If with your hours you can support 1,000,000 in sales per year. Then building for scale would require you to take a step back and build so that with those same hours you can sustain 1,200,000 per year with no additional, ongoing work, time, or money.
Where to Start
The first method is a change in how problems are solved. Each time a problem pops up, don’t just solve it, create a process that will prevent it in the future.
Customers keep emailing for tracking? Don’t just keep emailing, set up auto emailing upon shipment. Pre-empt all this work and eliminate it going forward.
Systems aren’t working because they don’t have complete information? Create a checklist for entering new customers, suppliers, and items that has all the info all your systems need. You’ll remove all the time and delays spent on fixing in the heat of the moment.
Customer orders are getting missed? Create a team inbox for orders, streamline the entry process, create data imports, create auto open order reports to customers, and have a report to show POs with missing inventory. Now you’ll eliminate all the follow up calls, emails, and work for missed orders.
Each issue is showing that you didn’t do something properly up front to prevent it. Create a company that prevents as many issues as possible. Much of the time these things can be automated, removing hours of work on the back end with no time investments on the front end!
Alluded to before, systems streamline the flow of material, money, people, and information. Creating set ways of doing things that everyone knows and agrees on creates a company with much less friction (and thus time spent not doing value added activities).
If production reports always go in the same folder, and everyone knows this, there will be no emails out each day asking for reports, sending links, making sure its the most recent copy, etc. There is an agreed upon system.
Think about all the pieces of information you use to make decisions each day.
- Customer Info
- Previous problem causes and solutions
Everything should have one and only one place… and the whole company should know where that is.
Everything that gets done should have a consistent approach. This reduces questions, unknowns, and variations in the outcome. By creating systems we eliminate an entire layer of communication and wasted time inside of a company that doesn’t add value, but does increase frustration.
Systems eliminate friction.
Automation is an almost magical way to build scale into your operations. If you spend 2 hours per day entering invoices, then to double the business will mean 4 hours. Growth has a cap, and at some point you no longer have the time to enter invoices.
However, with automation, you can automate the loading of invoices so that they auto enter. Setting this up correctly takes a bit of work, but you only do it once. So you spent 2 hours per week for a year (104 hours)… OR… you spend 10 hours in a week (getting slightly less sales possibly) implementing an automatically invoice system. In return you gain 94 hours that year to grow sales even more!
Start thinking… what can be automated?
Building scale can’t just be done by one person, it needs to be company wide approach… otherwise everyone else will just get burnt out trying to work harder and keep up with the growth. Here are some things that are extremely important to promote in the workplace. This needs to be done through action, not words.
Encourage experimentation. This means people will try things. They’ll have ideas and they will test. Most tests don’t work. Ideation, creativity, and trying need to be prized over having to get results.
If experimentation is to be encouraged, then failure needs to be accepted. There will be a lot of failure as you look to develop new methods, systems and approaches. Don’t make people pay for trying and failing… make them pay for accepting the status quo, for not trying!
If ideation is what you want, hold contests with prizes for best idea. Get everyone in on the fun. You never know where the next great idea will come from.
This is one of the most important concepts, and the one most ignored. You need to speak daily on what you want. If you are encouraging a “scale mindset”, but then bragging on how many hours you work, or congratulating someone for staying late and getting something done… you are encouraging the opposite.
Moving forward and starting thinking about what you could change to do things
- with less error
- more accurately
- with less work
- with more transparency
Build scale, not growth.