4 Key Decisions To Scale A Mid-market Company

In the early 70’s, my father lost his business. I remember the devastating impact it had on him. I remember how hard it was on our family.

I want to make sure this never happens to other business leaders. That’s why I’ve dedicated my life to doing everything I can to support business leaders with the knowledge and resources they need to keep their businesses growing, and thriving.

For the past three decades, I have helped thousands of companies scale up as the founder and CEO of Gazelles, a global executive education coaching company with over 200 partners on six continents.

Recently, I wanted to find out and address the biggest pain point business leaders of mid-market companies in the current market face. So the Growth Institute team conducted a survey with over 1,000 business leaders, and the biggest, burning question we heard from many CEOs and top executives of mid-market companies was:

“How can I really grow my company without losing control of my life?”

To answer this question, I hosted a live webinar training. In case you missed it, here’s a summary of the highlights and biggest insights shared during the training.

3 Qualities Of Leadership To Scale

Did you know there are 11,000 new companies starting up every hour around the globe? The fact is, many companies start up but too few scale up.

The most important foundation to scale a company is having the right leadership. Here are three important qualities business leaders need to have to lead their company into growth.

A. Passion

Let’s take a different view on passion by turning to a book by Marcus Buckingham, “Go Put Your Strengths To Work”. This book was pivotal in helping me understand what I, as a leader, needed to personally focus on to scale up my companies.

The key takeaway from this book is in how Marcus redefines strengths. Many people define strengths as what they’re good at, and because they’re good at many things it becomes difficult for them to let go or delegate. This keeps them stuck because there’s no way any company can scale without other people.

Marcus takes a different approach. He defines strengths as something that gives you energy while you’re doing it and even after you’ve done it. While a weakness is something that wears you out, even if you’re good at it.

The key is to delegate things that deplete you to someone who enjoys that task; to someone whose strength is in that area. Steve Jobs is a great example. Even though he was the CEO, he chaired just the marketing functions because he was really passionate about the design aspect of Apple.

How can you implement this in your company? I’ve identified three steps to guide you in putting your strengths to work:

1. For the next few weeks, keep track of all the activities you do on a daily and weekly basis.
2. From this list, start eliminating activities that nobody needs to do and identifying activities which can be automated.
3. From the remaining tasks, identify the ones that make you tired and then delegate them to someone whose strengths lie in that area. 

This process encapsulates one of the main ideas Marcus pushes forward in his book, which I love: Good leaders play checkers, great leaders play chess.

When hiring people and building your team, it’s important you’re not just duplicating yourself like a checkers board where every piece is the same. As a great leader, you want to develop a chess board where unique pieces have different strengths that are able to balance each other and work together as you scale.

B. Purpose

Purpose gives you a bigger reason to scale your company than just the money. One of my favourite thought leaders, Aubrey Daniels, says that if you can touch people’s hearts, you can boost discretionary effort of your team by up to 40%. This gives you a huge competitive advantage, and a huge reason why purpose is so critical for mid-market companies to scale.

An example of a company that exhibits this is Starbucks. They understand that their purpose is bigger than just selling coffee. Rather, their purpose is to be a sanctuary for people between their office and their homes.

C. Persistence

Apple started in 1976, and while they had early success it was only after about 25 years that they really took off. Starbucks only had 100 stores on their 20th anniversary, and their real scale up occurred after their 25th anniversary. Of the top 10 paintings critics consider to be Picasso’s best works, six of them were painted after he was 50 years old.

We are absolutely innovative in our 20s, but we are twice that in our 50s and beyond and a lot of us are just hitting our stride. So persistence is a key ingredient in scaling and becoming our best. 

From Starting Up To Scaling Up

Here’s one of the most important things to understand about scaling up a business:
“What got you here, won’t get you there.”

The gap between “startup” and “scale up” is the chasm that Geoffrey Moore, an American organizational theorist, management consultant and author, describes in his work, “Crossing the Chasm”. To cross this chasm, you need to change your strategy, because as mentioned earlier — what got you here, won’t get you there.

In the early days of running a company, you had to say “yes” to everything. Now, you have to start saying “no”. It’s all about tightening up your strategy. Those who have strategy will say “no” more times than they say “yes”. Those who don’t have a strategy will say “yes” to everything.

If you don’t nail strategy, your gross margin dollars will not grow as fast as you would like them to and your execution is not going to be as effective at driving profit and valuation.

The number one job of our strategy is to make things easy for our customers and their customers. Here are a few examples of companies who do this right:

• Amazon looks at how to make it easier to buy products from their site. They even look at how to make their packaging easier to open and better for the environment.
• BajaBound.com makes it easy for their customers to get the auto insurance they need to drive from the U.S. into Mexico. They dominate their niche and has more market share than any of their competitors combined with just seven employees.
• Ikea acquired TaskRabbit so they could make it easier for the elderly to get the furniture and get it assembled. 

Another aspect is making things easier for your employees, and this is the true essence of the Scaling Up methodology. It’s to make things easier for you and your employees, so you can scale up without the drama normally associated with growing businesses.

Let’s now take a look into the different tools in the Scaling Up methodology that will help you make things easier not just for your customers, but also for you and your employees so you can scale up.

Vision Summary

The vision summary is what you really want to share with the bulk of your employees, and maybe even your customers and marketplace. The vision summary has three components:

1. The four decisions:
   - Core values
   - Purpose
   - Brand Values
   - BHAG
   
   
2. The strategic priorities:
   - 3-5 years
   - 1 year
   - Quarter
   
   
3. Contribution
   - KPIs
   - Goals
   - Quarterly priorities

To do this, there are four decisions that you have to nail, and that’s what I’m going to dive deep into now.

The Four Decisions

The four decisions lie in four areas critical for business growth:


Most of you are aware that managing these four areas in business is like juggling four balls. If you want to scale them, which is getting them higher, then you have to do it one ball at a time. So, the first thing you want to do with your team is to figure out which of these four areas do you need to focus on first, to make things easier for everyone.

Now, let’s look into scaling up each area of growth.

Scaling Up People

A lot of mid-market companies could at least double their revenues with the headcount they have today, without having to attract more talent.

A a lot of us are so focused on wanting a great sales team, a great marketing team, a great HR team, a great IT team, and so on. We then tend to forget that the real work occurs cutting across those functions in a series of four to nine processes. To do that, you've got to be clear who is accountable for what, and you’ve got to know whether they’re running it well.

I have designed a few tools to help you scale up the “people” area of your business. FACe is the function accountability chart. It gives you a framework to determine if you have the right people, doing the right things, and getting the right results. While the PACe tool is the process accountability chart.

Scaling Up Strategy

If you can’t state your strategy simply, you probably can’t execute it easily.

“We deliver pizza in 30 minutes or less, or it’s free” is the perfect example of a great strategy that is stated simply.

To come up with a great strategy you can state simply, you can turn to the first two steps in the seven strata tool which I designed to help you crush the competition and dominate your market.

For now, I’m going look a little more into the first two steps of this tool since it can help you with stating your strategy simply. They are:

1. Own a word or two — What is a word or phrase you can own in a marketplace to make you stand out in your niche?
2. Declare brand — What are your three brand promises?

Scaling Up Execution

Do you have relentless repeatability to scale up your execution?

For this, I stand by my Rockefeller Habits Checklist, which consists of ten routines or rituals for scaling up.
As I like to say it, routine sets you free. These ten habits encompass:

1. Healthy Team
2. Alignment to #1 Thing
3. Meeting Rhythms
4. Clear Accountabilities
5. Employee Feedback
6. Customer Feedback
7. Values & Purpose Alive
8. Articulate the Strategy
9. Know a Great Day/Week
10. Plans & Performance Visible

What these habits essentially come down to is focus and discipline to implement a tight execution that allows you to rapidly scale.

Scaling Up Cash

Now, I’m going to wrap up with the fourth area, which is cash.

Do you know your cash conversion cycle? In my Scaling Up methodology, I have created a cash tool called Cash Acceleration Strategies or CASh. It’s a worksheet that can take you through improving your cash.