How Do You Grow: Part 2 of the Traps of Scaling Business
In Part 1 of this blog, we introduced the scenario that many business owners face once they are through the initial start-up phase and are generating momentum… and that challenge is scaling business effectively and sustainably.
We’ve addressed the first two traps to scaling: neglecting profitability and neglecting culture. Let’s look at the other 3 common pitfalls of the rapid growth phase of business.
Adjusting to Market Changes
The marketplace has changed since you successfully launched with your unique proposition. Customers are more savvy and demanding, and your customers have innovated to bring new features and services that rival yours. When Yellow Tail wine was introduced in 2001, it was the first blended wine to offer a more complex flavour experience that was still pleasing to most, an economical and everyday wine experience. It enjoyed tremendous success until competing products of equal value joined the offering, and Yellow Tail needed a new strategy to continue to compete.
Question to Action: What is your next move to reclaim your competitive advantage while meeting customers’ needs in a unique way?
Different Strengths are required from your Management Team
Your management team includes you, as the CEO and Founder, and one of the most common pitfalls of rapidly growing businesses is the loss of control. As you build out your extended team in the business, you and your managers need different competencies and strengths than when you launched. You will need to be effective at delegating, coaching and holding accountability in order to ensure you are aware of action and progress, and your direct reports are clear on their responsibilities. You will also need to increase your capacity for complexity, removing yourself from detailed hands on activity, and overseeing more diverse activity, and provide more of a visionary role in anticipating future needs and mobilizing resources to address these. You and your management team may grow with the business, or you may not. It might be time to make changes in the team now so that management capacity will carry your business successfully into the future.
Question for Action: What leadership strength gap in you or your team is hurting the business right now?
Business Operations cannot handle the Volume or the Complexity
Operations and systems is what most people think of when thinking of scalability challenges. You may reach the limit of the capacity of your manufacturing equipment, or your labour hours, or your processes and IT systems cannot handle the load as business grows. Perhaps you need to finance the purchase of new capital, or you need a larger facility, or your distribution channels need to be expanded. Or possibly you need to do a hiring blitz, revamp the process flow of documents through the office, or make improvements for efficiency. You took great care in choosing your operating model before you launched, and it’s important to revisit that regularly to keep it working optimally. Often the biggest problem is not knowing where the true problem lies. You may need to call in the expert team such as an Advisory Board to troubleshoot for you and develop the best solutions. Talk to us to find out how our Expert Advisory & Implementation Team can help.
Questions for Action: What one thing, when resolved, would have the greatest impact on your business’ ability to grow?
There is nothing more rewarding than building a business from the nothing, into a thriving and profitable workplace, making a positive difference in the world. And we want you to be aware of the potential pitfalls so you can maximize your chances of success.
How are you navigating these scaling challenges in your business? We’d love to hear from you so leave us a comment below to join the dialogue.
Until next time, be free… and wild,