This 3-Pronged Approach Will Help You Scale Your Business to New Heights Scaling your business has to be done right, or it will create more problems than it solves.
By Michael Orlando Edited by Amanda Breen
Opinions expressed by Entrepreneur contributors are their own.
Have you felt it? That pressure, under the minimal viable product (MVP) mentality, to just make your fingers repeatedly go snap so you just get something into the market right now?
I certainly have. But I've also seen that approach to scaling put companies further behind the starting gate than when they began: Recently, I worked with a team that had built a tool to target one type of customer. They were so focused on the immediate MVP gain that they didn't think about how easily the tool could be adapted for other customer sets. The tool ended up being so difficult to unwind, recode and reapply that the project, which was supposed to take just two weeks, has taken six months and counting.
It's the type of story that plays out all the time as companies try to pivot, select partners and accommodate new market demands. It demonstrates that the foundation of scalability isn't speed, but rather appropriate and intentional organizational, process and product design.
Related: How to Scale Your Business Sustainably
1. Start with organizational design with the endgame in mind
When a company is faced with a heavy load or inefficiency, the common knee-jerk move is to mess with the organization's design or structure. Leaders bring in lots of new people and rearrange where people are assigned in the hope that those changes will create a functional machine on the fly. What typically happens is that the changes only add to the confusing swirl or chaos in the business. People can't plug into an existing model, so they end up like passengers on a plane. They're forced to take off but have no navigation system or landing gear, and course-correcting is difficult.
In good scaling, organizational design is the capstone or endpoint of your pivoting process, not the heart of it. Addressing other internal problems, such as poor communication, often removes the need to reassign or add people.
Just as important, think about the expertise or specialization of your people. Companies are most efficient when they have the right people in the right place — that is, when people know exactly what their roles are and are capable of executing their duties independently. If you try to pull someone in who isn't really a good fit, they might be able to do the job, but they'll constantly have to lean on others, will require extra time to learn before they can teach or give direction and will make more potentially costly mistakes.
This doesn't mean that people aren't connected to other groups or departments. They need to intuitively understand their performance in the broader big picture of the company. But when you get everyone trying to give their two cents, you often end up with too many chefs in the kitchen. None of them are adequately empowered to decide what to cook, so nobody calls shots when it really matters or has accountability to the rest of the team.
Some experts have warned against collaboration or cross-functionality and heavy headcount as a fix-all, noting that production output goes down slightly as team size goes up because of the inefficiencies requiring everyone to collaborate creates. Intel CEO Andy Grove asserts that non-strategic decisions turn out best when the people closest to the situation have the final say. But because professionals can't truly operate in a complete bubble, as Alfred Sloan of General Motors once put it, "Good management rests on a reconciliation of centralization and decentralization."
Related: The No. 1 Reason Most Businesses Never Scale and Often Fail
2. Stop reinventing problems with process design
If organizational design is about having the right people in the right jobs, then process design is about making sure they're doing the right work at the right time. It centers around communication and how people actually get things done in ways that are easy to understand and repeat.
I remember a time when I watched six different groups search data we had. The information was exactly the same, but we got six different answers because every group interpreted it in its own way based on its own contextual understandings. The process was fundamentally flawed — we should have had one group develop an answer based on a full organizational picture and then had them distribute that answer to whoever needed to reference it.
So look at your communication habits and how narrowly you are construing assignments. Are you creating records of what's going on? Do you know who's doing what and where, and can you see how the process fits within the company's broader strategies? Make sure you're not just reinventing problems to keep efficiency high.
3. Pair product design with good process
Product design is where most businesses have the greatest opportunities to get out ahead of competitors. But it's also the area where they can make the biggest mistakes, slow down their ability to scale the most and end up drowning in technical and operational debt.
The issue is that the need for a fast time to market is in constant conflict with a thorough process. Companies struggle to find a balance between well-vetted shortcuts and replicable action.
Most companies unfortunately don't think through what's happening in the context of future needs. They tell themselves they'll come back later to tweak and improve their solution, but they rarely revisit what happened. If they do, they often haven't documented well along the way and don't remember the how, what or why of what actually took place, so they can't replicate anything. Predictable replication is a hallmark of scalability, so if you can't get the same results over time, assume you're in trouble.
Related: How to Scale a Company During the Pandemic
Use all three design points to scale for future success
Scaling is critical in that, if you can't accommodate new customers and the needs they have, your competition happily will outpace you. It ensures that you can take advantage of opportunities and increased demands that come your way, rather than having to pump the brakes. It also protects you from getting so wrapped up in what you're doing that you never discover the real potential within your brand. It's a great time to scale if you feel about 80% comfortable — that is, there's enough pressure to keep you motivated, but you've got fantastic leadership, solid customer validation about your decisions, and your culture doesn't have a ton of swirl.
If you're ready to adapt, consider all three design points — organizational, process and product. Use predictability and consistency as your key metric for assessing effectiveness because your company can be successful only when you can forecast based on reliable anticipated results.
