What does 'scaling a business' really mean and how do I do it?

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This is a concept that repeatedly rises to the top of conversations over the last few years, in particular in the startup world. Where new firms are asked to show how they will escalate to a significant size so that the investors can generate investment gains. It is also a topical conversation nowadays due to the constantly shifting demands of a competitive market. It's a phrase used frequently in board meetings and startup dialogues, yet it's frequently misunderstood or misinterpreted. What exactly does "scaling a business" entail, and how do you actually do it? What makes it unique from organic growth? How can you deliberately grow your company for better outcomes? Let's get started by clarifying these ideas.

What does it mean to ‘Scale a Business’?

Scaling a business means intentionally preparing the organisation to perform and sustain an optimal level of operations, whilst it pursues rapid growth in sales, so that it can continue to achieve exponential outcomes. To purposefully expand an organisation in a way that enables it to thrive in spurts of heightened sales, maintain or increase profits and exceed delivery expectations of the client is the dream of most leaders, but it is a reality for a few companies. What is their secret? It involves intentionally developing a viable business strategy that paves the exponential pathway to the ambition, but also considers how the organisation will prepare to withstand rapid peaks, without failing. Intentional growth is different from organic growth, which involves just trying things out and hoping for the best results, it is a DELIBERATE PURSUIT OF EXPANSION.

"Intentional expansion of an organisation is really about growth, but not just any growth. It is about organised, efficient, strategic, structured and certain growth."

- Jenny Junkeer

A really simple measure of a company’s scalability is to evaluate how well it can increase its income while incurring little additional expenditure or effort to deliver those sales. For example, since it doesn't take much more resources (input) to produce a second copy of software (output) for a new client, software companies, for instance, often have outstanding scalability in terms of delivery efficiency. A service business, on the other hand, can face more difficulties being scalable because each new client demands more of the service provider's time, which is a limited resource. The ability to deliver sales more efficiently is only one of a dozen ways to measure scalability. Scalability is still so much more than this. 

Simply told, if you're in a boat 🚣 and you want to travel quicker, you can either row more forcefully or rebuild the boat to be more aerodynamic. Harder rowing is growth. A scaled organisation redesigns the boat 🛥️. When you go to redesign, you are intuitively going to make it better. Not many people redesign something to make it worse than what the original item was. So we can take it for granted that by simply redesigning the boat, you can learn from all the things that were wrong with the original boat and make it better. However a trained eye in scaled businesses knows all the bells and whistles this new boat needs to have, so when they redesign, they are highly informed and very clear on how aerodynamic the boat needs to be for the future goal.  

The Pursuit of Intentional Growth

Why is it Different from Organic Growth?

A more passive strategy for business growth is organic growth. It entails gradually changing your company in the hopes that the improvements would result in expansion. Organic growth is not a reliable approach to scale a business, even though it occasionally works well. Setting specific goals, creating a plan to reach those goals, and tracking your progress along the way may all be part of the organic growth process. And whilst these same elements are required as part of intentional growth, they are approached rather differently, even if these differences are indistinguishable to the untrained eye. 

It's essential to contrast business scalability with organic growth in order to fully comprehend its subtleties. Organic growth might be characterised as a more iterative, "try it and see what works" strategy. It occurs when you experiment with different strategies in the hopes that one or more will be successful and promote growth. It depends as much on fortuitous circumstances as it does on deliberate preparation, so it's kind of serendipitous.

However, having scalability is a far more deliberate, data-driven, wholistic approach to business. It entails developing a sustainable, customer centric and expandable business model, continually optimising it, and then deftly allocating funds and priority to the areas that will have the greatest impact. It differs from organic growth because of this intentionality, as well as a clear vision and tested growth methodology.

You know you are in the world of organic growth if you notice the following. You might hire more people, make marketing investments, and see sales growth. However, as your organisation expands, you can also notice diminishing profits or even a performance plateau. This may be caused by a number of things, such as inefficiencies in your business strategy, bottlenecks in your operations, or an improper allocation of resources.

Contrarily, when you scale, you consciously pinpoint and magnify the key factors that have made your organisation successful as well as intelligently seek out new things to introduce to it to make it more scalable. You carefully eliminate inefficiencies; wastage; poor performance; bottlenecks; miscommunications; minimise human error; confusion; ambiguity; conflict; politics; and essentially everything else we have come to know is bad in business. Imagine a world where you remove all of it. That is what a well scaled business has done. Best of all it did it without necessarily a corresponding increase in expenses or resources, because they did it intelligently. 

Why is Intentionality Crucial for Success?

You have the potential to enable your organisation to produce results that are at least three times stronger than those you would with organic development. The intentional nature of it means something very specific - instead of you deciding what you HAVE and making the most of flogging it to achieve growth (organic), you decide what you NEED to achieve your exponential growth ambition and then you work towards achieving that. TWO VERY DIFFERENT APPROACHES. The latter is highly more successful than the former. 

Another key factor when you are intentional, is that you set out to deliberately pinpoint the aspects of your organisation that are PREVENTING you from succeeding. Most organisations don’t like having this conversation organically, in fact they often avoid it because it appears to be a blame game exercise. This conversation and identification is one the most important things you can do to expand exponentially. Organisations look to open new sales channels, attract new customers etc., which are often things out of their control, so they enter the world of trial and error to figure out what will work. How about you first work on the thing you can control - the removal of barriers to success. There is a thought process in scale that if you remove obstacles, it may be an easier and shorter pathway to scale.  This is the hidden gem that most organisations have up their sleeve at all times, but they rarely use it. Be like a snake I say, and shed your dirty old skin as often as you can and arrive in the world as a new shiny, sharp instrument that is ready to kill their competitors. 

But your organisation might be stuck at the "Why go through the effort of purposeful scale?" We are doing fine as we are right now. 

For many businesses, the attitude of "We are doing fine as we are right now" is a quiet killer. This complacency is a risky mentality because it presumes that the current circumstances, such as market demands, the competitive climate, and consumer preferences, will remain unchanged, which is uncommon in today's dynamic business environment. Even if a business is currently succeeding, this does not ensure future success. Innovation and adaptability are essential to a company's long-term success. Industries change, consumer habits change, and new competitors appear; all of these factors have the potential to upset the status quo. Therefore, companies that aren't growing, inventing, and upgrading consistently risk falling behind. Inability to recognise and adapt to market changes, as well as missed possibilities for expansion, can result in a company's downfall or even dissolution. Simply simply, if you're not advancing in the corporate environment of today, you're falling behind.

To demonstrate the difference between organic and intentional growth:

Consider a simple illustration. A restaurant owner might experience a brief gain in sales if they increase their advertising spending to draw in more customers (organic growth). However, if their kitchen isn't equipped to handle an increase in orders or their staff isn't properly trained, this expansion could result in overworked personnel, protracted wait times, and disgruntled customers, which would lower returns and reduce repeat customers.

Compare this to a restaurant owner who first determines the most important aspects determining the success of their company— food quality, customer experience, and effective operations—and strategically allocates resources in those areas. They might decide to upgrade the cooking system, train the personnel to deliver top-notch service, and then ramp up advertising to draw in more clients. This is deliberate scale, and the effects—both short- and long-term—should be substantially stronger.

Where do you start?

It may appear to be a similar question as ‘how do you eat an elephant?’. As the analogy goes, most will tell you that you eat it one bite at a time. An expert on scale will tell you this isn’t the way to approach scale. 

So how do you do it then?

The easiest way to think about it is that you are in fact going to eat an entire elephant (metaphorically of course). Define this a business transformation and make it a singular PROJECT.  Then when you attack an entire arm or leg or a combination of things that need to be consolidated, that becomes an INITIATIVE within the master project.  You can potentially do one or two initiatives concurrently, until such time you get through them all to complete the entire project. As the business is undertaking a significant transformation, which is now a singular thing, it creates a high degree of alignment and clarity. This organically drives intentional behaviour by all leaders, who now have to work together. 

So how does this large project work?

The project objective - get to the business ambition. 

The project scope - fix things that need fixing, introduce things that need introducing, stop things that need to be stopped, to achieve the project objective. Have a project strategy that clearly outlines how you will arrive at the project objective in a CERTAIN way. 

The project rhythm - Focus all the efforts of the entire business, ensure synchronicity and alignment at all times. Follow great project management practices, and strong prioritisation techniques, then execute all day every day.  

The best place to start is by consolidating several aspects together into the first burst of initiatives. 

The trick is to have enough business discipline to understand that NO OTHER PROJECT MATTERS. If other projects exist, it either now becomes an initiative that is necessary within this master transformation project, or you question its relevance altogether. 

All project initiatives now have a quantifiable connection to the business’s ambition, thereby achieving comfort that EVERYTHING everyone is working on is highly relevant and needed.

The quick step by step approach to follow:

1. Define your ambition: What do you want to achieve by exponentially growing the organisation? Do you want to increase revenue, profits, market share, and/or something else? Be specific about your goals so that you can measure your progress along the way.

2. Define the vision: Clearly articulate what you want the organisation to be known for by its Customers over the next 20 years. 

3. Develop a strategy: Once you've defined the ambition, develop a plan to achieve them. This might involve making changes to the current business model, investing in new technology, moving into a different industry direction, creating new products or services etc. Be sure to prioritise your initiatives based on achieving a master transformation sequence.

4. Measure your progress: As you implement the strategy, measure the progress regularly. This will help you identify areas where you're making progress and areas where you need to make adjustments. Use data to inform your decisions and adjust your plan as needed.

5. Continuously improve: Intentionally growing a business is an ongoing process. Continuously look for ways to improve your processes and execution. 

In conclusion, growing a business purposefully enables you to produce results that are at least three times stronger than those you would with organic tactical initiatives. Intentionality is essential for success. As you begin to deliberately grow the organisation you will automatically set targets, create a strategy, track your progress, and make continual improvements as is needed with large-scale business transformation projects. Taking this approach to operating a business will result in you being a resilient organisation that can respond easily to an ever-evolving marketplace.