Seven Stages of Scale
Many companies undergoing frantic hiring freezes or excruciating layoffs during this economic downturn could have avoided this.
Businesses can often weather storms amidst uncertainties if they stage their growth to scale. "Scale," however, is often misunderstood and, especially among startup founders, misrepresented. One cannot "scale" an organization from 5 to 500 employees; this is linear (or exponential) growth without any sense of the corresponding revenue. (We aren't even talking about profitability yet, just a fundamental analysis of a company's basic performance.) Yet, you will often hear meaningless vanity metrics like these spouted as evidence of success. They aren't. They are evidence of expenditure, and for many companies, spending is happening reactively and the current financial climate is calling out these organizations and holding them to account.
Scale is about correlating business fundamentals to consequential growth strategically. Across all industries, for businesses, foundations, and institutions, it happens predictably and requires certain dependencies to be met before it can occur incrementally. Without these critical stages, even wildly successful publicly traded companies become vulnerable to uncontrollable market forces.
- People
Begin with the very reason your organization exists: your people. Often called the "Vision Statement," or the "Theory of Change," it is fundamental to articulate in as few words as possible the why of your business. It should be aspirational but also timely and relevant. Your core values and company culture are anchored upon your people and how they see themselves as a part of your vision. - Plan
Companies enter the market with the promise of their potential; they compete in the marketplace with a unique and differentiated offering. You should offer something that none of your competitors delivers, and you should have exclusive command over both how you communicate this offering and how customers can only actualize value from what you offer from you and only you. Your Go to Market is about your plan and how you offer it. - Process
Aligning people with a vision and arming them with a strong go to market strategy provides a business with an engine of innovation (why you exist) and a mission to fulfill (how you thrive). You only need the fuel to jump-start engagement, and for this reason, a framework is necessary. Don't over-engineer processes, as they will change often and adapt to the many lessons that are learned at all stages of maturity. But setting rules of engagement for how people work together will ensure your plan can succeed.
The first three stages of scale are foundational. They lay the groundwork for your organization through its people, the programs they design, and the processes that place clients at the heart of the work they do together. These fundamentals are often revisited and updated, but skipped or abbreviated at tremendous peril. Without grounding in your company's purpose, or supporting your people with a coherent go to market, a business journey runs the risk of easily being derailed. It will also face deep challenges to evolve to true relevance and value.
- Explore
Once you have established a culture of continuous improvement and client-centered collaboration as your base, it is time to head out into the market and test your message and offerings with prospective clients, current customers, and potential partners. Generous listening, both to the problems you are not currently solving as well as to the direction of the industry in which you are playing, will provide you with early indicators of how you should change your plan and tweak your foundations before you strike your first expansion. - Expand
Accepting revenue is sometimes an existential necessity; you can't always choose your clients. But you should choose what type of customers you pursue, and the choices you make will also create feedback opportunities for helping existing clients be more successful in ways you never envisioned. These will create adjacencies - services and solutions you never originally envisioned offering, but that are complementary to your core and an extension of your vision. In this exercise, you will identify new partners and competitors participating in your client ecosystem, and must maintain a differentiated and unique value proposition to succeed. - Exploit
Evolving from a vendor into a partner in client services requires a dramatic pivot, one that demonstrates you are rigorously overcoming your challenges and relentlessly pursuing your opportunities. By becoming your clients' trusted advisor, you will prove yourself as indispensible to their business as their own team members. Operations and Sales are two fundamental disciplines that have to be redesigned at this stage to be proactive, predictive, and success-measured in order to transform into a new kind of company: an unconquerable force. - Exterminate
Dominating your organization's segment is less about vanquishing your competitors and more about revelaing yourself to be peerless and incomparable. Your work with clients is reflected in all that you do internally at your organization; you anticipate their needs and the industry's unknowable challenges, you articulate value in a way that is convening of your space as a community anchored on your work, and you truly own your space and define the rules of engagement moving forward.
The 4X'es of Scale represent stages of a maturity model reliant upon a perpetual motion of improvement in your foundational phases. Over 90% of startups fail within a year and money is only 2 of the top 20 reasons why. Failure comes down to not having scaled the enterprise with a sense of consequential meaning, and more than half of the reasons companies of all sizes collapse is because they did not properly set their people up for success. For us at Technocery, this is about foundational stages: people need a plan and process that connects them deeply with their customers, so that they can listen carefully and address core business needs in consolidated, actionable ways. We can help.