3 Key Points in this Episode:
- Getting your business to scale is only the beginning.
- Scaling without sacrificing culture is essential for long-term success.
- Scaling is not just about growth it is about becoming better over time.
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Let’s get started with episode 112.
Getting a business to scale over time is usually a primary objective for most business leaders, but that growth can come at a cost by impacting the culture of the business.
You’ve worked hard to build a culture that reflects your values and dreams for the business, and you don’t want that to change as the business scales.
This episode addresses those concerns and will explain the strategies that successful business leaders have used to keep their culture in place after the business has significantly increased in size and scale.
Scale is the Beginning Not The End
When you start a business you often have a vision in your mind of growing the business to a point that it will provide for you and your family.
As the business grows you begin to realize that you could become a dominant player in your regional market, and you start to consider what the business will look like once you hire your team and expand beyond a family run business.
At some point, the business starts to really take off and suddenly you are faced with the challenge of scaling your business to multiple locations.
When you started the business all those years ago this “challenge” of achieving scale seemed like a distant dream and the finish line. Now that you have achieved this goal you realize that scaling your business is just the beginning, not the end.
Not only must you contented with issues like how to raise capital to fund the growth, how to maintain profitability as you grow, how to find enough talent, and how to deal with the ever-expanding government regulations, but you realize that there are many other considerations that never even crossed your mind in the early years.
For example, it is likely that you have infused your personality, values, and dreams into the very DNA of the business. You’ve created a culture of care, a culture of exceptional service, and a culture of integrity into the business.
Naturally, you’re very proud of the culture you have created within your business. But as the business begins to scale you no longer are going to be able to personally manage every aspect of the business and that scares you.
In a very real way, as I mentioned before, scale is not the end it is just the beginning, so how do you scale without sacrificing culture?
Scaling Without Sacrificing Culture
Scaling your business involves replicating your prototype – the single business you started – dozens, hundreds, hopefully, thousands of times. It involves expanding your “footprint” – the geographic area and market presence of the business – and this involves focusing on costs, efficiency, and systemization.
All this work is necessary, and in some ways, this work is far easier to replicate than the culture of the business. Culture can’t be measured on a spreadsheet or systemized, it is more abstract and is better understood as a “mindset.”
How do you ethically replicate the “mindset” of hundreds or thousands of people?
I mean you don’t want to employ destructive mind control techniques and turn your business into a commercial cult after all.
How do you get Sally – the new frontline employee you just hired to run the counter in a store 600 miles away – to treat the customers the same way you and your wife did when you opened your first store?
While having a good system will ensure that Sally physically performs the job the same way, a system will not ensure that Sally will have the same mindset or will make the customer feel the same way as you did when you initially did this job in your first location.
In the beginning, when it was a family business you and your wife were passionate about serving your customers and you had lots of internal motivation to do a great job because you needed to close every sale just to survive.
Sally, on the other hand, is just an employee and may or may not care, after all, she will get a paycheck this week whether the business is profitable or not.
The only way that Sally will have the same mindset, is if she thinks and feels the same way about the job as you do. The internal motivation must be the same. Since Sally will never be an owner like you are, the motivation can’t be about your personal hopes and dreams as the owner. Sally doesn’t care if you get a bigger house or drive a nicer car as a result of the businesses success.
The dream that you pursue must be something that Sally will pursue and believe in as much or possibly even more than you do. That is the only way to get Sally and all the other employees who will work at all the other locations to share the same mindset and ultimately replicate the culture you originally created when the business was small.
The dream of what the business will become and more importantly what the business will do must be so compelling that it draws a specific kind of person to want to join all the other people who want to make a difference.
The way to ensure that scaling your business doesn’t sacrifice your culture is to make sure that your dream is so compelling you don’t need to be there to maintain the mindset needed to achieve the outcome that dream is focused on.
What is the connection between scaling, culture, and building a better business?
I’ll answer that question after our break.
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Scaling is About Becoming Better
We are back from our break, now before the break, I promised that we would discuss the connection between scaling, culture, and building a better business.
Scaling isn’t just about getting bigger. It is also about getting better.
It’s about spreading exceptional systems and ideas, and persuading–ideally inspiring–others to make them their own.
“The way you know you’ve succeeded is to ask yourself, ‘If I lived 600 miles away and stopped putting energy into this, would it work the same way?'”
I like that question because it positions scaling as an activity different from–and more nuanced than—purely growth.
If all you focus on is growth, there are thousands of short-term decisions that you can make that will achieve growth in this quarter and this year. Most short-term growth hacks come at a significant cost long-term.
If you build a dedication to being better into scaling your business, not only will you preserve your culture and successfully achieve your mutually held dream for the business, but you will also achieve sustainable long-term growth.
There is a saying that I was taught by one of my mentors, “pay me now or pay me later” which meant that if you pay the higher price now you will pay less later and conversely if you choose to pay less of a price today you will pay exponentially more tomorrow.
The application of this in the context of our discussion today is simple.
Pay the price of being better each day so that in the long-term your business will not only have grown but will maintain the healthy culture you so painstakingly infused into it when the business was small before you started to scale.
Fail to pay the price of continuous improvement today and in the long-term, your business will not only fail to maintain the healthy culture that exists in the present, but your business may not even scale or exist in the future.
This brings episode 112 to a conclusion.
On Tuesday, I am interviewing Conner Curran, a Canadian entrepreneur who is dedicated to manufacturing his products in North America despite the manufacturing process typically being sent offshore. I think you are going to love Conner’s story.
Talk to you on Tuesday.
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Thank you for listening and I look forward to talking with you soon.