If your business is growing steadily, your profits are increasing proportionally to your sales, and you’ve finally gained control over the supply versus demand curve, congratulations. You have successfully navigated the Growth Phase.
But now, a new challenge awaits. It’s time to move into the Scale Phase.
In this stage, the focus shifts from incremental progress to increasing your profits in larger multiples. To do this, you have to change not just what you do, but how you and your leadership team think.
1. Building the People Infrastructure
The first step in scaling isn’t a marketing play or a sales tactic—it’s an infrastructure play. You must finish the installation of your leadership and management systems.
Scaling requires a rapid increase in headcount and a massive expansion of operations. Without a People Management System that is just as consistent as your operational systems, the business will crumble under its own weight. Successful scaling is only possible when your people systems allow for seamless onboarding, management, and performance tracking at high volumes.
2. The Shift to Strategic Thinking
As you move into scale, your leadership team must step up their game. Scale requires a transition from execution-based management to Strategic Thinking.
Strategic thinking is the ability to:
- Look forward in time: Stop solving today’s fires and start projecting the future.
- Industry Projection: Anticipate the course of your industry and the broader economy.
- Economic Interaction: Understand how market shifts will interact with your specific business model over the next 3 to 5 years.
This is how you move from incremental growth (doing more of the same) to exponential growth (mergers, acquisitions, geographic expansion, and new product lines).
3. The Painful Decisions of Leadership
Here is a hard truth many CEOs face during this transition: Great managers of growth do not always make great leaders at scale.
The manager who was a hero during the Growth Phase—the one who white-knuckled the results and managed the chaos—may not have the strategic mindset required for the Scale Phase. As the owner, you must recognize this.
It doesn’t necessarily mean leaving loyal people behind, but it often means moving them to a different seat on the bus. Scale requires leaders who can delegate the “doing” and focus entirely on the planning.
4. The Power of the Cascade
The final skill your leadership team must develop is the ability to cascade the strategic plan.
Strategic goals can often feel abstract to the frontline team. A 5-year vision must be broken down into:
- 3-Year Milestones
- 1-Year Objectives
- 90-Day Actionable Goals
When you become great at this breakdown, every employee understands exactly how their daily role contributes to the bigger, exponential goals of the company.
The End Result: A Business That Runs Itself
At the end of a successful Scale Phase, your business should run itself day-to-day. Your focus as the CEO/Owner shifts to purely strategic decisions, utilizing a high-performing leadership team to lead the implementation of your vision.
The journey from growth to scale is complex, and you shouldn’t have to guess your way through it. The ActionCOACH Business Operating System (ABOS) was developed specifically to help you navigate and complete this transition.
Ready to start scaling your business in larger multiples?
Click the link below to schedule a quick 15-20 minute chat to discuss if ABOS is the right solution for your journey to the Exit Phase.
Author: Mark McNulty, Business Coach in Louisville, KY