Where are you in your preparation to scale?

As part of our protocol, we have developed an analytical tool that allows us to quickly assess where a company is in its preparation to scale.

A company achieves scale when it is experiencing exponential growth (where revenue per community member increases as the size of the community grows) and revenue economies (proportionate reduction in costs by each increased level of sales).

ScaleWerks’ Definition

Mid-life companies that have been successful in growing their business – but want to accelerate their corporate valuation by scaling – experience a common set of hurdles. We know this because of our research and confirming in-field experience. In fact, we’ve spent our careers developing, validating, and proving a protocol for scaling mid-life companies.

As part of our protocol, we have developed an analytical tool that allows us to quickly assess where a company is in its preparation to scale. Here’s the backstory and an invitation to learn where your company is in your preparation to scale.

We find that successful companies travel through three areas of effort on their way to scale.

Work Harder. The first area of effort is the most common. It originates from a familiar experience for seasoned business leaders: periods when sales growth slows, profit margins get squeezed and return on assets in general decreases. The typical response is to work harder. The “Work Harder” response customarily includes:

• Making more outbound sales calls
• Reducing costs
• Asking/assigning people to do more

When working harder doesn’t provide the returns that are needed – or is unstainable because of the toll it takes on the members of the organization, there is a move to work smarter.

Optimize Processes. Working smarter starts with initiatives to optimize the processes of the business. These endeavors regularly include:

• Employee development (including Safety and Quality Management programs)
• Business planning (including vision-based strategic plans, sales plans, capital plans, financial forecasting and zero-based budgeting)
• Process mapping and redesign
• Implementing Lean (operating changes such at lean manufacturing, lean design, lean supply chain, lean administration)
• Implementing agile
• Organizing and executing the difference between Lean thinking (where teams increase speed by managing flow and Agile, where teams emphasize small batch sizes to deliver quickly (often in sprints).
• Performance management (including KPI’s and OKR’s)

All with the goal to increase efficiency, effectiveness, collaboration, and ultimately, profits.

Optimization initiatives and advancements will deliver meaningful results, but over time those efforts meet with marginal returns on effort. Assuming the optimization processes are successful, the company will enjoy short-term cost, quality, and efficiencies that can be used to change the product and pricing strategy; which in turn inspires the leadership to redesign sales and marketing efforts.

Redesign of Sales and Marketing. Redesign of sales and marketing efforts customarily include:

• Sales and Operations Planning changes (which may include implementation or upgrades to the ERP and CRM systems)
• Implementation of digital strategies (such as online sales, marketing and order management)
• Channel strategy changes (including online and physical)
• Changing the value proposition (the bundle of services, products or experiences offered to the customer)
• Re-branding (based on customer satisfaction and product/service feature changes)

However, those sales and marketing efforts are fated to marginal returns as competitors recognize the efforts and match them.

Realizing that the product sales and marketing efforts don’t deliver transformative performance gains – and recognizing that these efforts are nothing more than adjustments to the current business model – the company comes to grips with the hard truth that their effort must be placed into rethinking the entire business model. And here’s where it gets hard.

Re-thinking the business model

Business model innovation should enable the company to reorganize the market by transforming the customer base’s perspective on the experiences it demands. The outcome for the company is that it moves from niche player to Category Leader, and from Category Leader to Scale.

Our empirical evidence proves that innovating a company’s business model will significantly increase company value.

So why don’t more companies dig in and change business model? In our work we bump up against two central challenges (often reinforcing each other). The first challenge is perspective. Leadership cannot perceive a new approach to doing business. The second is inertia – the organization itself is packed with barriers to changing the existing business model. The barriers break down as:

Can you transform your business model for scale?

We have created a series of assessments that can give you high-level insight into the scale-preparation areas of challenges yet to be addressed, and your capability to transform your business model for scale. These assessments address these issues:

1. Where are you in your preparation to scale?
2. Where are you positioned in the Scale-able business model design?
3. Where are you in your ascent to scale?

If you’d like to get these insights, start with the first assessment – that’s located here.

At ScaleWerksTM we’ve been at the forefront of transformation as thought and implementation leaders our entire careers.

We know that transformation is not a single initiative … and Scale is not a program; Scale is a way of seeing the world – it’s a perspective– it’s a lifestyle. And like any healthy lifestyle, it can be learned, internalized and be a source of life-sustaining energy.

According to a McKinsey Corporate Performance Analysis, less than 8% of strategic initiatives result in performance improvement.

As seasoned authorities in sustainable value creation, we’ve made careers of leading those that are in the 8%.

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