The ‘Scale-Up Mindset’. Do you have it?
It comes in all shapes and sizes, but for almost all SME owners growth is the goal.
But why do some companies scale exponentially with a seemingly effortless ease? Whilst others find growth painful and hard to achieve?
Perhaps more than anything else, this depends on leadership mindset.
The scale-up mindset
Before we explore the scale-up mindset, it’s important to better define both ‘growth’ and ‘scaling-up’.
For this exercise, we’ll treat a ‘growing company’ as one that takes a company from 1 to 100 customers. And a ‘scale-up’ as a company that goes from 100 to 100,000.
Growth is reliant on human insight and decision making that is often made in ‘live’ scenarios. Scaling-up is built on an ability to predict, plan for and make repeatable decisions time after time.
To extend this example, a growing company might have an experienced leadership team who make intelligent decisions about customer enquiries on a daily basis. These highly valued individuals have taken months, if not years, to develop the skills needed to make these decisions accurately.
A scaling company will onboard new people quickly and support them with strong processes that simplify decision making. This will mean a new employee can effectively make complex decisions within days of joining the company.
Scaling companies are built on processes that have been designed with the intention to scale. Efficiency, repeatability and simplicity are the goals. This means problems are foreseen and overcome long before they emerge.
Do you have the scale-up mindset?
Amazon began as a start-up. It didn’t grow to become one of the largest companies in history by simply duplicating human effort. Instead, Amazon’s founders created intelligent processes with a relentless focus on the customer. They coupled this with an obsession for predictability, efficiency and repeatability.
Consider your company. How easy was it to onboard your first ten customers? What about your next 100? Just as easy? If a spike in demand meant you needed to onboard 1000 new customers tomorrow, without any drop in service, could you do it?
That might sound like fantasy, but it’s exactly what happened to a number of Thinc customers during the first few months of the COVID-19 pandemic. Fortunately they were prepared and scaled seamlessly.
But it’s not only freak events that can cause such significant changes in demand. Almost all scale-up owners report a period in time where their business ‘took off’ and they were suddenly presented with an entirely new business landscape to negotiate. Crucially, those who already had the scale-up mindset were already well prepared to successfully navigate this exciting new world.
Scaling-up, a ‘make or break’ moment
Growth mindset businesses are often ill-equipped for significant change. If orders suddenly increase, they’ll scramble to find short-term ‘fixes’ by throwing in more minds, minutes and muscle to meet demand.
Even if the challenge is met, the time and energy wasted on performing these manual tasks prevents them from working on other important areas of their operation. If repeated this could have catastrophic consequences for the business overall.
So if working proportionately harder isn’t the answer, what factors enable some businesses to thrive during these make or break events?
At Thinc, we coined the term ‘intelligent companies’ to describe the businesses who are best-positioned to smoothly transition from start-up to SME and from SME to scale-up.
The leaders of these companies invest in process, systems and technology – and do so with scaling front of mind.
Applying the scale-up mindset
The scale-up mindset isn’t built by spending five years at Harvard Business School. It’s not a zen-like state or something that a lucky few are born with.
It’s a practical, problem-oriented approach that any business leader can adopt. It requires self-belief, clarity, focus on the larger goal, and a relentlessness in pursuing it. And fortunately these are probably the very traits that helped you get into business in the first place.
In short, almost every entrepreneur has the capacity to develop a scale-up mindset. And to repeat our earlier sentiment, the mindset is the number one factor in defining whether you are running a growing business, or a scaling business.
So what are the main things to consider when scaling?
1. Your people
“To go fast, travel alone. To go far, travel together.” African proverb.
This proverb is useful. But ‘fast’ and ‘far’ shouldn’t be considered as mutually exclusive. Scale-ups are both fast and capable of going very, very far.
This is why intelligent companies – companies ready to scale – focus on amplifying human potential. They take good people and unleash their greatness, and they do this at volume. By applying the right technology to ’’automate’ routine decisions, people can focus on adding value.
Humans, unlike almost all technologies, have the ability to use their creativity and resourcefulness to foresee and overcome challenges. Crucially your people can also collaborate with other departments and teams.
When this is achieved across an entire workforce, issues can be ironed out long before they materialise. This mass unleashing of human creativity, collaboration and drive has an incredible wave-like effect on an organisation. And is capable of creating exponential growth simultaneously in multiple directions.
2. Hiring and nurturing talent
An extension to the point above, but an important one. Scale-ups invariably need to find new people and make them a great fit for their organisation. Your mindset and approach to hiring, on boarding and training will be critical to the success of your whole operation.
How do you know whether these processes are right? Ask yourself two simple questions.
Question A. What’s our success rate with new hires?
If you work from a ratio that a minimum of three-in-four new hires should succeed, that’s a healthy rule of thumb to follow.
Question B. How quickly can new employees add value?
New people should be up to speed in days, and adding tangible value in weeks. Any longer than that, and the likelihood is you’ve got a growth rather than scale-up approach to on boarding talent.
It’s important to take these tips at face value. They’re broad principles to help steer your thinking and get you ready for a scale-up mindset. Both the hit-rate and on boarding speed will vary greatly by sector and role. But by considering efficiency, repeatability and velocity when hiring, you’ll already be on the way to cultivating the talent you need to scale.
3. Clean data and powerful process.
According to research from McKinsey, artificial intelligence (AI) is set to increase UK GDP by 22% by the year 2030. It is predicted that scale-up organisations will be the primary value creator in this significant uplift.
So data and intelligence are clearly important, but how do they relate to a scale-up mindset?
Changing your view of how decisions are made is the fundamental shift. Many growing SMEs make decisions based on information that is interpreted by people in real-time scenarios. Depending on the size of your business, this might mean dozens, hundreds or possibly thousands of independent judgements being made every single day. Experienced people will rely on their knowledge, experience and the information they have ‘to-hand’ to get the decision right.
A move towards faster, more reliable decision making means moving away from ‘judgement’ based decisions. This may take you as far as utilising AI, which can add previously unimaginable velocity, reliability and accuracy to your operation. Or it may simply create processes, powered by technology, that help people make the right decisions at speed and scale.
And the secret-sauce of AI, analytics and better decision making lies in great data.
4. Design everything to grow with you.
Many companies believe they need to understand their businesses immediate future in order to make the right investment decisions. This is where a leader with a scale-up mindset differs. Instead of focussing on where the company is today and tomorrow, they stretch their imagination to its outer limits, imaging where investment could take them.
Forecasting the potential of a scale-up takes significant experience. But needless to say, this is one investment you need to get right first time.
Manual processes need to be designed out, and automated systems and processes brought in. Disjoined IT systems need to be replaced with a seamless ecosystem. And data needs to become the new oil in the system, a rich, precious resource that will keep everything running smoothly, even when operating at 110mph.
Creating a business capable of scaling-up isn’t simple, but once the systems, processes, people and IT ecosystems are in place, you can focus on increasing demand without having to worry about whether your business can handle it.
Ready to scale-up?
If you’re interested in learning how to scale your business at speed, sign up to our scale-up content series here.
If you think you’re ready to scale, or want to learn more from businesses who have ‘been there and done it’ contact our scale-up team today.
Tel: 0808 168 8922
Thinc Scale-Up Series
Thinc's Scale-Up Series has been designed around our experience in working with some of the UK's leading start-ups.
If you're looking to scale at speed speak to our scale-up team on 0808 168 8922