Scale or fail? Warning: don’t even think about growing your business before you read this

ILLUSTRATION BY RUTH MACAPAGAL

Most companies have no idea how to properly scale their business.

If you are missing even just one or two pieces of the equation, you could easily spend millions of dollars, countless resources and even years of your time without ever getting your business to the next level or close to its full potential.

As the “mentor of the giants” (Fortune) who has consulted and advised the presidents of some of the world’s largest companies, top Fortune 500 CEOs, owners of some of the most respected family business conglomerates and many of the world’s most famous brands, I have seen what makes or breaks a business, no matter its size.

The truth is that most businesses, even if they are already a market leader or global conglomerate, are still only one or two major strategic decisions away from failure. The long list of famous failures from Kodak to Nokia is a testament to that.

A lot of companies think about growth and expansion in these times of change because many unique opportunities exist in the markets today. But we always warn our clients that there are best practices that they will need to follow to become or stay successful. And knowing how to scale properly is one of them.

Scale to fail

Most businesses fail when they want to scale.

I will share an example from one of our clients. A fast-growing company in the retail industry that was already a market leader in many different countries always encountered fundamental challenges when it tried to scale up globally. The owner had no idea why this was happening.

When he talked to his top people, everybody told him that there were no real challenges in the company that should prevent it from scaling before they started the next major growth initiative.

As a result, the business owner invested millions of dollars into the next wave of expansion only to find out that, once more, the expansion failed and they stayed at their current level of size. He had no idea what the real root causes of these challenges were.

Persistence is indeed more important than talent. But this owner could have easily repeated this 100 times without success because persistence without insight leads to the same results.

When he approached my team and me to find the root causes for these challenges, it quickly became clear to us that these were not what he thought. This is normal because CEOs and owners have natural blind spots and are usually too close to the trees to see the forest.

Scaling secret No.1: Plan, plan, plan

Hope is not a strategy. Yet most companies still plan too little. They spend too much on work for work’s sake, on “being busy,” without having the proper foundation and planning in place.

What is true for a tree is true for a skyscraper and is true for a business. The more you want to grow your business, the more ambitious your goals are, and the stronger your foundation needs to be. And that foundation is a rigorous, solid and detailed strategic plan and road map.

“But all companies plan,” you may say. That is correct. But most of them miss essential elements of the equation and therefore end up with plans that are not practical, not realistic, or not actionable. For example, most companies do spend not nearly enough time on the correct anticipation and prediction of trends. This includes how these trends will impact their businesses, the opportunities for expansion and growth that these trends will create, and how they could profit from them. In turn, they also spend too little time analyzing what threats these trends will pose to their business and what unforeseen enemies these trends could create that will endanger their market position.

Scaling secret No.2: Execution is king

A plan is just a plan without proper execution. Massive action. Your whole team and your entire workforce should get up every morning with the burning desire to execute the plan and road map to accomplish the vision of your business.

One of the most common challenges among the businesses we have worked with around the world is the failure to scale the plan down across all ranks so their entire army is properly motivated and has absolute clarity on what needs to be done.

As a result, most plans fail already in the first stages of execution because owners, CEOs, board members, or top executives don’t know how to communicate properly what needs to be done so it reaches even the lowest levels of the organization.

Scaling secret No.3: What gets measured gets done

One of our Asian clients spent weeks planning every year but then only looked at the plans again a year later. That does not work. You need to constantly check your progress against your targets all the time, everywhere.

The truth is that you can never measure enough! One of our clients, a global fast food giant, tracks every detail – from the time it takes employees to flip the burgers to how many minutes and seconds customers wait in line.

In our global consulting experience, we have seen again and again that the best-performing companies in the world are masters at tracking progress, key performance indicators, key results and people’s productivity and performance.

Scaling secret No.4: Complexity is the enemy of execution

Keep your processes simple.

Most companies become slaves to their processes. Asia is no exception. The result is a slow-moving and complex business that is not built for maximum growth and expansion. The processes should serve you—not the other way around!

Scaling secret No.5: Trust in unique solutions and simplicity

Every business is unique. Therefore, every solution must be unique. Do not be blinded by academic theory and by the myth that great solutions need to be complicated.

Take Palantir Technologies, for example. It is a public American software company that specializes in big data analytics. Founded in 2003, they are now a multibillion dollar company. You may think that to get to that stage, they had to apply a fancy mix of complex sales strategies. However, the opposite is true.

They found out early enough that their best sales strategy was for their CEO, Alex Karp, to get on a plane and to spend 80 percent of his time meeting prospective clients in-person. Because they typically sell high-value multimillion dollar contracts, this strategy has proven to be the most effective for them. It is simple and it works.

Five to thrive

1. Make rigorous, solid and detailed strategic plans and road maps for your business. If needed, get the best experts to support your teams.

2. Communicate your plan properly—make sure everyone clearly understands what needs to be done so it reaches even the lowest levels of the organization.

3. Measure and track ad infinitum: become a master at tracking progress, key performance indicators, key results and people’s productivity and performance.

4. Keep your processes simple: Find out what has worked in the past, simplify it and make it easy enough so people can follow through and execute.

5. Trust in unique solutions and simplicity. INQ

Tom Oliver, a “global management guru” (Bloomberg), is the chair of The Tom Oliver Group, the trusted advisor and counselor to many of the world’s most influential family businesses, medium-sized enterprises, market leaders and global conglomerates. For more information and inquiries: www.TomOliverGroup.com or email

[email protected].