Growing a company is not an easy task by any means. There are many potential scaling failure areas that can occur, such as poor leadership, lack of followership, missing systems or processes, and a lack of continuous improvement. It’s important to be aware of these potential pitfalls to avoid them so that you can continue scaling the company successfully!
Good leadership is essential for any business scaling strategy. A good leader can help to motivate and inspire employees, set the vision and direction for the company, and make sure that everyone is working towards the same goals. Poor leadership, on the other hand, can lead to a lack of motivation and direction, and can ultimately cause the company to fail. When you hire and evaluate individuals it is key that you know what characteristics you are looking for. Good leaders should possess the following key characteristics:
– Motivation: A good leader should be able to motivate employees and help them to achieve their goals. We have all seen leaders who will micromanage or who lack the ability to motivate without being demeaning. You are looking for leaders that will have people jumping out of bed in the morning passionate about getting the tasks done that will move your company forward.
To be motivating, leaders need to know how to speak with employees but often good leaders know that speaking is second to listening. The leader must be an active listener and show empathy. Employees should not feel intimidated by their leaders, instead, they need to feel empowered and like they can approach them about any concern or issue.
– Inspiration: A good leader should be able to inspire employees and help them to see the bigger picture. Leaders need to be able to help their teams to see how working hard on certain tasks will benefit the company and ultimately get them to their goals. You need leaders who are able to get all of the employees pulling in the same direction, not people who are comfortable with having many moving parts that may be confused or even worse, putting the company at risk by ignoring key tasks.
– Direction: A good leader should be able to set the vision and direction for the company and make sure that everyone is working towards the same goals. The leader should be able to not only set the vision but also help others in seeing it and understanding it along with the scaling business model that you are going to follow. Leaders need to know how to build a good plan, when and where resources should be allocated, when teams need support or additional resources or when they may require more autonomy.
– Communication: A good leader should be able to effectively communicate with employees and ensure that they understand what is expected of them and that any challenges or issues are communicated effectively. For any company that is scaling, caring leadership is essential. There are many studies that show that when an employee feels like they are cared about and appreciated, they will go above and beyond what is expected of them.
– Manage conflict: A good leader should be able to manage conflict between employees or teams and resolve any issues as they arise constructively. I have seen good leaders who take the perspective that conflict can lead to better ideas and improved performance while bad leaders take the opposite perspective.
Another key component of scaling a company successfully is having strong followership. This means that everyone in the company is on board with the vision and direction of the company, and is willing to put in the hard work necessary to make it a success. If there is no followership, then it will be difficult for the company to grow or even continue operating. Strong followership should possess the following key characteristics:
– Be willing to work hard: Your employees should be willing to put in the hard work necessary for the company to succeed, rather than just being present at work or passively doing their jobs. Like I said at the beginning, scaling an organization is hard work and it is going to take a team that is willing to work hard to get to the next level.
– Understand the vision of the company: Employees should have a good understanding of what is expected of them and what the vision for the company is. The vision of the company is the target that is on the horizon that shows where you want to go. If employees do not understand the vision they can lose focus and pursue things that will not get you to the final goal.
– Be open to change: Employees should be able to adapt to changing circumstances, environments, or situations in order to succeed. Adaptation is a key skill in an organization that is growing. If employees are not open to change it will make it difficult for the organization to move forward thus limiting the potential for scaling.
– Open to criticism: Employees should be willing to accept constructive criticism and use it positively in order to improve their work or performance. I have been a part of organizations that are afraid to openly address the elephant in the room. Being a good follower means that you will take criticism and act on it positively. Having this open approach to criticism and taking action will enable individuals to grow with the organization.
Another common failure area that can occur when scaling a company is a lack of standardization or processes. This means that employees do not follow standard processes and instead individual departments, teams, or even individuals operate in an uncoordinated manner. This lack of process can lead to lower quality products and services and will ultimately cause the company to fail.
To avoid creating dysfunctional processes when scaling a company, it is important to understand that they are needed and to implement them as early as possible. A strong process should possess the following key characteristics:
– Standardized: There should be a standard way of performing many of the processes in the organization so that all employees follow the same steps. This will ensure that the same results are achieved time and time again.
– Clearly defined: Each process should have a clear definition of what is expected so that employees understand what they need to do. You want your employees to know the boundaries as well as the norms.
– Transparent: To facilitate open communication within the company, each process should be transparent, so that everyone can see how it works and understands what they need to do. Being in a larger organization often looks like a relay race. Knowing when to pass the baton and when you should be running is critical for relay races. In running a company, teams need to have transparency that demonstrates that they are ready to take on the work, are processing the work or are complete with the work.
– Consistent: Each process should be performed in the same way each time so that there are no unexpected results or issues. Okay, this is a big one, being consistent means that people can count on the results. For both internal stakeholders and customers, consistency is key to ensuring that there are no surprises.
Another key factor that can help you successfully grow a company is continuous improvement. This means that employees are constantly looking for ways to improve themselves, their work, and their processes so that the company can continue to grow and scale successfully. We have all seen the situation where a particular problem has existed for years just because no one took the added time to refine the process so that the problem does not occur again. Having a method to ensure that continuous improvement is included in things like lessons learned at the end of a project or monitoring metrics for the highest levels of defects will help you to maintain a process of continuous improvement.
Continuous improvement should possess the following key characteristics:
– Self-improvement: Employees should be willing to dedicate time for self-development, whether it’s learning new skills or improving existing ones. Life is hectic and if you do not tell your employees that they need to take time out to improve themselves, they may not take the time. Setting aside time for each individual to grow will benefit the organization’s ability to scale.
– Team development: Employees should be willing to work on team development and help each other out to improve and develop their skills. I often see companies that do not take time out to let teams ensure that they are coalescing and this can lead to further challenges in getting work done. Team development is a key continuous improvement activity.
– Process improvement: Employees should be willing to look for potential issues within the processes in place at their company and suggest ways in which they can be improved. In smaller companies, there are often protective leaders who all think that the problems of the organization exist in other departments. Managers and employees need to be able to be open about where problems are occurring and work proactively to resolve the issues so that they do not continue.
Scaling a business is hard. Many potential failure areas can occur, such as poor leadership, lack of followership, missing systems or processes, and a lack of continuous improvement. It’s important to be aware of these potential pitfalls to avoid them and continue scaling the company successfully!
These factors can lead to lower-quality products and services and ultimately cause a company to fail. If they are recognized early and dealt with, it will be possible to successfully scale a company.
Why Entrepreneurs Dont Scale – HBR