A version of this article first appeared at Inc.com.
It happens all the time: A business achieves good, consistent organic growth, but despite everyone’s best efforts, never really takes off.
Perhaps you’ve watched in frustration as one of your competitors experiences rapid ‘hockey-stick’ acceleration and shifts to a whole new level, while for you, growth remains a doggedly gradual incline, with each year just a little better than the last.
Here’s the interesting thing – while this ‘stuckness’ can happen at any revenue level, the underlying cause is almost always the same. Whether it’s failing in the transition from a $300k business to $1m+; $10m to $100m, or from $1bn to $5bn, the problem with scaling rarely lies with the underlying business model, or the products or services offered, or the economy.
No, for most organizations that try to scale but fail, the bottleneck is usually the person at the top – the founder/owner or CEO. Here are the top three reasons why this failure to scale happens:
1. You can’t help making it all about you.
One of the most alluring aspects of successfully growing a business is the personal feeling of achievement that comes with that success.
For many founder/owners particularly, those two things (the success of the business and their sense of personal achievement) are inseparable: they and the business are one, and the success of the business is also a personal vindication of the risks they took in getting the business off the ground.
There’s nothing wrong with this – seeing the business as ‘your baby’ is a natural consequence of having so much skin in the game from the start – but it eventually becomes a barrier to truly scaling the business. To scale, the founder/owner needs to ‘release’ the business – allow it to become an entity in its own right – an organization with its own needs, demands and rights, an organization which the founder/owner serves, rather than the other way ’round.
2. You blow up systems and processes.
Visionary leaders achieve early growth by trusting their instincts and improvising like crazy.
Again, there’s not a darn thing wrong with that – in fact, it’s the only way to successfully grow a young organization (as well as being a lot of Fun). Scaling, however, is a different animal entirely, and can’t be accomplished by improvisation alone – it requires a foundation of systems and processes, consistently adhered to.
Trouble is, while most visionary leaders can intellectually assent to the need for systems and processes, only a surprisingly small percentage can actually discipline themselves to work within them – instead, most visionary leaders eventually give in to their arsonist tendencies, blowing up systems and processes in frustration, when things aren’t moving fast enough for them.
3. You’re being held to ransom.
For some leaders, the problem with scaling is that every time they try to do so, some constituency sabotages the effort.
Sometimes it’s a large customer, who wants things done a particular way and effectively hobbles the organization’s ability to make the operational changes needed to scale. Sometimes it’s people within the organization who subvert attempts to scale – big dogs, who have built a high degree of autonomy over a period of time, and who resent the changes scaling will bring.
Either way – whether it’s a large customer using their purchasing power, or big dogs cashing in their sweat equity, the end result is that the founder/owner or CEO cannot (more correctly, won’t) push through the changes necessary to achieve scale.
What’s to be done in such a situation? Is the business doomed to ‘mere’ organic growth? Well, it all depends on your response. Here are the alternatives:
Accept you’ve reached your business growth ‘set-point’ and enjoy it.
For some leaders – especially founder/owners – the reality is that they aren’t, at heart, prepared to pay the price in terms of culture change that is required in order to achieve scale.
It’s entirely valid to make such a choice: achieving consistent, profitable organic growth is a great place to be, and consciously deciding to stay there is a great strategy – much better than trying again and again to scale, only to be frustrated every time.
Accept that to grow your business, you first need to grow yourself.
The ‘ah-ha’ moment for most business leaders who want to scale is the realization that first, they need to personally develop as leaders – to recognize, as Marshall Goldsmith eloquently put it, that ‘what got you here won’t get you there’.
My recommendation is to find a mentor – someone who has undergone the self-development process needed to lead the scaling of a business – and ask them to help guide you through the journey. When you’re trying to scale, there is really no substitute for the guidance of someone who has been there, done that.
Get out of the way.
The hardest decision of all is to realize that achieving scale is vital for for your business’s survival, but that you aren’t the person to make it happen.
Sometimes a leader’s skills, passion and inclinations make them perfect for early growth, but temperamentally unsuited to managing a business that needs to scale. If that’s you – and if, for whatever reason, achieving scale isn’t optional – then it’s time for some personal tough love: find and hire someone with a proven track record in doing so, and let them get on with it.
I am still in the early struggle, but understanding the challenges ahead is already impacting my decisions. Your knowledge and experience, combined with the clear way you present it, is invaluable to me. I highly recommend your books and your blogs to all entrepreneurs. Thank you!
Hi Tom. Thanks for your kind words and for your recco’s. Do let us know if we can help you in any other way.