Climbing the Scaling Curve – A Map for Success

Where does your organisation sit on the Scaling Curve below? Knowing where you are now is as important knowing where you want to get to. Ambitious CEOs can be tempted to sprint up the curve, leaving their people, systems and customers behind them. While overly cautious CEOs can fail to invest for the future, build the culture, systems, leadership capability and organisational structure required for a business of their size. Worse still, not knowing how to scale effectively can leave a company stuck at a stage while their competitors surge ahead.

Figure 1: Checkside’s scaling curve

As any experienced mountain climber will tell you, knowing where you are and where you want to be by when is key to survival and having a well-developed and communicated plan is the key to success.

Having located your company on the Scaling Curve and looked with nervous excitement at the next highest peak, you can now map out an appropriate ascent. CEOs who plan to ascend the scaling curve whilst also investing in the maturation of their Management Operating System are the best prepared, most aware of the challenges and with the supporting internal machinery to emerge into the next scale-up stage with industry leading profitability, robust systems and high performing executive team.

Start-Up

“An organisation formed to search for a repeatable and scalable business model” [1]

Start-up CEOs thrive in organised chaos, dynamically building a product or service. The excitement of hiring and building a team that they trust and bond closely with compensates for the lack of structure, Management Operating System and policies and procedures. They know every employee, maybe even every customer and moving fast is adrenaline for the team. When success strikes how well prepared is the organisation to meet the demands of the more sophisticated customers, a larger workforce and how will the culture survive?

Scale-Up

“A transitional organisation built to develop the ability to execute growth and attract capital” [2].

Scale-ups have moved beyond the Start-up phase as they grow rapidly due to having found product-market fit and are creating economies and efficiencies through their scale.

Moving to Scale-up stage has its risks – crossing the ice crevasses from base camp to the next level is the valley of death for most Start-ups, so how do you survive? Having one foot in Start-up and one foot in Scale-up territory is a start and then slowly shifting the weight as the business and Management Operating System matures.

• A professional sales team and system is created
• Experienced employees are recruited to create processes and procedures
• Roles are more clearly defined, and accountability ascribed
• Strategy becomes an annual event, reviewed quarterly
• Management and finance systems and leadership skills are starting to be developed

 Professionalise

As companies mature their Management Operating System, its complexity and robustness increases, enabling them to weather more storms. CEOs of professionalised businesses have achieved this stage by developing and communicating a clear Scale-up and growth plan. Everyone in the organisation is engaged climbing the mountain.

At this stage the organisation has fallen into a rhythm of monthly, quarterly and annual meetings with a leadership team striving for accountability for their own outcomes and to each other.

• Sales channels are expanding
• Divisions and departments have their own aligned strategic plans and Objectives and Key Results (OKRs)
• Reporting dashboards and profit centre results are in place
• Policies and procedures are maintained and have consequence
• Poor performance is addressed, and positive achievements rewarded with bonuses supported by further investment in leadership skills and culture is ongoing

Enterprise

Of the very small number of companies which reach the Enterprise stage, most have a broader ownership structure, are operated by a professional leadership team (often independent from the owners/founders) and have the reporting, management and financial systems to support it as part of their advanced Management Operating System. From the Board down to shop floor, everyone is aligned on the strategy and their role in achieving the goals.

• Leaders understand the value of 1:1 coaching as they tackle new challenges and complexity
• Documented processes exist on an ERP platform
• Sophisticated reporting functionality and a rhythm of meetings to keep aligned and focused on the OKRs is in place
• Strategy is reviewed quarterly, and planning cascaded down to divisions/functions
• Culture is embedded and supports expansion to multiple geographies and business areas

No two companies’ journey is the same and moving up each stage of the curve can take 5-10 years or more. Checkside has guided hundreds of our clients over the years up many mountains, navigated treacherous valleys and helped those who have lost way get their back on track.  Planning the evolution of your Management Operating System is the key to successfully growing your business and maximising your shareholder value.

Helping our clients navigate the Scale-up Curve is part of our value proposition as trusted advisors and partners in success.

Contact us to talk about where you want to be on the Scale-up journey.
The Checkside Team

[1] https://www.imd.org/ibyimd/innovation/how-to-scale-seven-qualities-of-successful-scale-up-ceos/

[2] https://www.imd.org/ibyimd/innovation/how-to-scale-seven-qualities-of-successful-scale-up-ceos/