Don’t Grow Your Business, Scale It

The objective of most entrepreneurs is to grow their business – more revenue, more profit, more output, more locations, more than whatever the competition is doing. And in general, growth is a good thing.

But it may not be the best thing, as an insightful article in Inc. Magazine points out. A better approach to expanding your company’s presence is to think in terms of “scaling” your operation, not just “growing” it.

Editor Leigh Buchanan follows author and researcher Robert Sutton as he visits several companies that have wrestled with the challenges that often accompany rapid growth. Sutton’s latest book is “Scaling Up Excellence:  Getting to More Without Settling for Less.”

As the Inc. article notes, “scaling isn’t just about getting bigger. It’s also about getting better. It’s about spreading exceptional ideas, systems, or business models, and then persuading – ideally inspiring – others to make them their own.”

Sutton points to the problems that Starbucks encountered when it grew from 140 stores when it went public in 1992 to more than 13,000 15 years later. The standardization and efficiency that made that dramatic expansion possible had left some customers disenchanted. Competitors with more of a “coffee house” ambience, such as Peet’s Coffee & Tea, took advantage of that opening.

Facebook, says Sutton, has worked hard at preserving its culture even as it grew exponentially. New hires are onboarded by engineer, not HR professionals, assigned to write code for small projects under the company’s “move fast and break things” approach. Soon these employees have “internalized in a very deep way what is sacred and taboo at Facebook,” he says.

The mini case studies presented in the article make it clear that there isn’t one right path for effective scaling of a company. Some companies benefit by giving their employees latitude to experiment and innovate, while others (the In-N-Out Burger chain is an example) flourish by precisely replicating a successful formula.

In the end, it is the leader’s job to identify the strategies that will enable his or her enterprise to scale. If you are wrestling with how to make your company truly better, rather than just bigger, call us for a no-obligation consultation.

Comments are closed.