It’s very rare to find an entrepreneur who’s able to go from starting a business, to running a business at scale. Often the ones that do get a huge amount of coaching, or have a top class advisory board because the learning curve to keep growing a business is enormous.
There are three key areas to keep under control as you scale out a business, and each has different challenges at different times.
Strategy
A lot of people get confused about strategy.
Strategy isn’t how you do things, how you react to challenges or opportunities. It’s why. Your strategy is how you position yourself, and what guides you, tactically.
Are you a low-cost or high-quality offering? Or something else entirely? Basically, your strategy is the platform you use to support all your decisions and everything you do as a business.
Strategy will change during the life of your business because you’ll run into new problems as you go. It might be employment, or getting the right flow of materials, or working with your customers. The world changes too, which doesn’t help.
So, scaling up your business will mean you need to adjust your strategy as you go. There are difficult decisions that will help set your strategy, and decisions that will flow on from your strategy. Do you expand into new markets? Or double down to own existing markets? Do you keep a flat structure or get more help with management? Do you keep the same offering or expand? Or cut your offering to be more specialised?
We’ve advised and worked with companies to help refine their strategy, and a number of these have grown from zero to list on the NZAX, the NZX, the ASX, the NASDAQ. Others have stayed family owned but dominate their markets, and others have remained small businesses.
Optimisation and operations
Building on the ‘why?’ of your strategy are the things that you actually do.
Because you spend so much time working on your business or on the problems the business throws at you, it’s normal not to see the forest for the trees. Most businesses will have a whole lot of changes that can be made right now that would dramatically improve how the business runs.
There’s a balance between the analysis paralysis of measuring everything you do and trying to optimise for efficiency, or completely overhauling things instead.
You have to be careful to balance being nimble with not changing
for the sake of change.
For large, pivotal changes or when there are cascading operational problems, we will usually run a detailed operational review, to help understand second and third-order consequences of change.
Governance
What’s the difference between management and governance?
Governance is basically the board of directors. For most small-medium sized businesses, the owners, directors and management are the same people. As you start to grow, or as you gear up for growth, it’s advisable to get someone independent on your board. This lets you see the ‘big picture’ so you don’t just focus on management problems. You can then spend this time setting strategy and making sure your business is sticking to it.
For start-ups, this can be a bit more streamlined, and is usually an advisory board. This can be a good way to get used to looking at the big picture, and it’s not as formal as setting up a full board of directors along with independents.
For larger companies, a good first step is to get an independent director on board. This will ensure discipline on the board with avoiding operational issues; which is all too easy to do.
Next steps
If you’re reviewing your business and thinking about the future and the changes you can/need to make, and/or better aligned strategy and governance, get in touch below. We’ll be happy to have a confidential, complimentary chat to see where you’re trying to get and whether we’d be a good fit to help.
