Everywhere you look, you hear one word, growth. It seems to be the word on everybody’s mind and you might think to yourself that growth means success. But while people try to create initiative after initiative to grow the business, entrepreneurs and business leaders forget to build essential groundwork required to build sustainable growth. Scaling without a solid foundation can lead to disaster and may be what causes the business to fail.
Remember, as businesses scale, it requires a different set a skills of the leadership team than what allowed them to be successful when they were smaller.
Ask Yourself: Do We Satisfy Our Existing Customers?
Many businesses are in such a rush to find new customers and new avenues of growth that sometimes they neglect to focus on their existing customers. Guess what. They can be your biggest source of growth. By focusing on them and ensuring you exceed their expectations, they might give you more business and they are more likely to become brand ambassadors, advocating for the business within their circles and attracting new customers.
Speaking from another viewpoint, if you don’t satisfy your existing customers well, do you really want to be marketing and selling more of a bad product or service? You might get some new customers, but they certainly won’t stay and trying to service them may make your existing service to your current customers worse.
KPIs and metrics you can look at to determine how well you satisfy customer needs can include Delivery- In-Full-On-Time or “DIFOT”. If that metric is below 98%, then don’t even focus on marketing and sales. Focus on improving your operations and systems.
Growth has to be earned, and you earn it by ensuring you do your best to satisfy your existing customers.
Ask Yourself: Do We Have Available Capacity In Our Business?
The availability of capacity within a business is a crucial factor in effectively managing growth. A business’s ability to cope with growth hinges on its existing infrastructure, resources, and workforce. Without sufficient capacity, rapid or unexpected expansion can strain operations, leading to bottlenecks, delays, and diminished quality. Having excess capacity allows businesses to navigate periods of heightened demand without compromising the quality of products or services, ensuring that customer satisfaction remains intact.
Strategic planning for growth must include provisions for expanding capacity alongside increased demand. Not every part of your business is going to be constrained when dealing with growth. Some processes may have spare capacity while some may become constrained with only a small increase in demand. By having foresight into what may become a potential constraint, you can manage growth effectively by implementing initiative that address the constraint including improving efficiency or adding more resources to the process to expand capacity (or both).
If you are not sure about how to manage potential constraints and bottlenecks, you should learn about the Theory of Constraints, a methodology focused on helping organisations achieve greater success by focusing change on a few key leverage points that have the greatest impact.
Ask Yourself: Are Our Processes Efficient?
Process efficiency powers scalability. Before expanding, you must ensure that your existing operations are as streamlined and efficient as possible. Scaling inherently magnifies existing inefficiencies. If you’re already struggling with operational bottlenecks or wasteful processes, growth will only exacerbate these issues.
While you may be focused on growing scale, a competitor may be focused on operational excellence. As you scale and encounter issues with constraints and inefficient processes which impact customer service, you competitor may be building a strong foundation that will lead them to take over.
Efficiency improvements not only boost profitability but also lay the groundwork for expansion.
Ask Yourself: Do We Have The Right Management Structure and People In Place?
The right management and organizational structure serve as critical pieces for allowing growth within a business. A well-defined management structure provides the framework necessary for effective decision-making and ensuring that strategies align with the company’s growth objectives. It establishes clear lines of authority, accountability, and communication channels, promoting efficiency and coherence across the organization. Often these factors aren’t considered when managing growth leading middle managers to have bloated responsibilities, excessive direct reports and with no clear support structure in place can decide to leave. Focus on creating a long lasting corporate structure that resembles The Great Pyramids Of Egypt and less like a House of Cards.
Don’t think that the simple answer is to promote your existing staff to management roles as the company grows. Not everyone has the skills to be a manager and some people simply don’t want to become managers. Therefore, you need to set clear guidelines as to how motivated people will become trained to become managers and where you take on managers from externally, there is a training program in place that allows them to work effectively in your organisation. Guidelines should also include the type of managers that should be hired. It is too easy to hire a bad manager that can slow down or completely disrupt your growth plans.
Effective leadership and clear hierarchical roles offer a pathway for identifying and nurturing future leaders within the company. Well-defined roles and responsibilities provide employees with clarity, enabling them to understand their contributions to the organization’s growth, fostering motivation, and commitment. A solid organizational structure not only ensures the successful execution of current growth strategies but also creates a roadmap for sustaining long-term expansion and success.
Conclusion
The allure of rapid growth can be intoxicating, but it should never come at the expense of satisfying existing customers, working beyond capacity and ensuring processes are efficient. Building a strong foundation may not make headlines, but it ensures that when growth comes, it’s sustainable and profitable. Scaling without these essential factors in place is like sprinting before learning to walk—it may work for a short burst, but it’s not a strategy for long-term success.
Remember that scaling a business isn’t just about expanding the top line; it’s about fortifying the entire structure. Prioritize your existing customer base as you grow. When you do, scaling becomes a journey of exciting opportunities, not a leap into the unknown. Your business will not only reach new heights but stay there for the long haul.