10 Commandments of Scale
“The twenty-first century is more connected, faster paced and less predictable than previous eras.” General Stanley McChrystal
If you want a business that scales without heroic effort, you’ve come to the right place. In this series, I’ll share practical tools, tips, and tactics you can use to create a strong foundation for growth while maintaining the agility required to adapt to change in the fast-paced, unpredictable world of business in the 21st century.
This series is for you if:
- You spend more time working in the business fighting fires than doing what you do best.
- Your profits aren’t growing consistently year over year, but your workload is.
- You’ve got more problems than opportunities.
- You don’t want to micromanage, but you feel you don’t have a choice.
- You want to build an organization that seems to grow without heroic effort because everyone is on the same page, pulling in the same direction and they make the right decisions when nobody is watching.
“If you don’t have time to do it right, when will you have time to do it over?” ~ John Wooden
It’s never been easier to start a business, but it’s never been harder to keep one growing. The pace of change and level of uncertainty is increasing exponentially and shows no sign of slowing down. I’ve worked in businesses of all shapes and sizes. I’ve seen what works, what doesn’t and I’ve made my share of mistakes. I’ve learned that business is as much art as it is science and that the leader’s job is not to have all the answers but to maintain the right balance of freedom and control. The goal is to weave market-awareness and self-awareness into the DNA of your organization. When you get it right you establish what I call freedom in a frame which has 3 major benefits over traditional business development methods:
- Your team will have the freedom to solve problems without you so you don’t have to be the hero.
- You’ll have fewer blind spots.
- You get the ability to keep your finger in the pulse of your operations while maintaining an objective perspective so you can capitalize on opportunities.
“No institution can possibly survive if it needs geniuses or super humans to manage it. It must be organized in such a way as to be able to get along under a leadership composed of average human beings” ~ Peter Drucker
There was a time in my leadership journey when I was proud to be the hero with all the answers. Then as our organization grew I began to realize three things about heroic effort:
- It sucks.
- It’s not sustainable.
- It doesn’t scale.
That’s when I decided to take off the cape, stop being the bottleneck and weave market-awareness and self-awareness into the DNA or our organization so I could spend more time working “on” the business and less time working “in” the business.
It was from that experience that I created the “10 Commandments of Scale”. The first three describe the sequence of steps to grow your business the right way. The next four serve as an operating system that can evolve with your business. The last three create the guard rails to guide execution.
Below is a high-level overview of each command and each week I’ll share practical, tools, tips and tactics I’ve curated throughout my career. So without further adieu, here are my “Ten Commandments of Scale”.
1 Disrupt thyself before someone else does
Disruption has become the new norm. Markets change almost overnight and competition can come from anywhere. If you’re not constantly adapting to the changing needs of your customer, someone else will, but all businesses develop blind spots that, if left unchecked can lead to missed opportunities or worse, catastrophic failure. If you want to sustain growth year after year I say embrace disruption and turn it into a strength. Build in recurring periods to reset, look back on past performance, make a realistic assessment of your current situation and adjust your strategy based on the insights you can only gain by getting out of your businesses and seeing it through the eyes of your customer.
2 Get L.E.A.N.
If you want to stay ahead of the competition then you’ve got to experiment with new, innovative ways to increase customer lifetime value. The mistake I see most businesses make is chasing new revenue streams without proper funding. The result is a runway that’s too short so new ideas crash and burn before they can achieve liftoff. The good news is, most organizations I’ve worked with have the funding they need, it’s just hidden in the waste that accumulates over time, but you can eliminate waste and build the runway you need by thinking L.E.A.N.
- Look and listen for what customers value most because they aren’t always able to tell you, but they know it when they see it.
- Eliminate waste where it is thought not to exist because the worst waste is that which you don’t see.
- Always engage, enable and then empower workers in that order because skipping enablement is really abandonment in disguise.
- Never stop learning what customers, partners, and workers value most because you can’t do it alone.
3 Innovate like a startup
Traditional management techniques like waterfall, management by objective and command and control are dead. If you want to remain competitive in the 21st century, you’ve got to be a leader and leaders find new and better solutions to customer problems. They use modern technology and techniques like “The Lean Startup” and Agile development to create new products and services customers value and they do it for the lowest total cost. I will share some of these tools and techniques in the episodes that follow.
4 Know Thyself
Your culture is your X factor. It serves as the conscience of your organization and it’s the litmus test workers use to make decisions when nobody’s watching, but If you don’t create one, one will be created for you. Unfortunately, most businesses don’t actively create a culture and wonder why they have high turnover, low employee engagement, and high costs. I’ll show you how to think big, start small and create a culture the right way without spending thousands on team building retreats or walking on fire.
5 Know Thy Work
If you can’t describe your business as a process while it’s working, you won’t be able to fix it when something changes. But most leaders don’t create work standards because they fear being labeled a micromanager, but if done right standards have the opposite effect. They key is to create what I call freedom in a frame by telling workers what needs to be accomplished and why it matters, then engaging, enabling and empowering then to figure out how to do it better. If you get it right, they’ll not only take ownership of improvement, but you’ll have more profit to attract, retain and share with them so they’ll stay with you longer.
6 Know Thy Numbers
While most business leaders agree, what gets measured gets managed the mistake most make is they use gross vanity metrics like total revenue, total cost and gross profit to manage their business. This presents several problems:
- They resonate with leaders, but not with the front line and the front line has the greatest ability to impact them.
- By the time you can measure them it’s too late to influence them.
- Even if you did have time to try something different, there are so many factors that influence them it’s impossible to see which change made the impact so you’re relying on luck and hope.
In future episodes, I’ll discuss how to use leading and lagging indicators create a culture of accountability and achieve wildly important goals without heroic effort.
7 Know Thy Ideal Customer
My first golden rule of scale is to attract, retain and grow ideal customers for 4 reasons:
- They have a lower cost of acquisition
- They’re willing to pay a premium for your products and services
- They’re willing to overlook small mistakes
- They buy additional products and services
Customers don’t care about your product or service, they care about what they get more or less of when they use it. The mistake most businesses make is they don’t learn to speak customer. In order to speak their language, you’ve got to get out of your head and into theirs so you can use the words they use when they’re thinking about their problems.
Throughout this series, I will share practical ways to use the data you probably already have to create marketing material that attracts ideal customers for less and enables you to create new products and services they’ll pay a premium for.
8 Create a Growth Strategy that Resonates
I believe plans are useless, but planning is priceless. Unfortunately, most leaders don’t capitalize on the planning process. Instead, they don’t take the time to document their strategy or they create one in a vacuum without including the people that are responsible for caring it out. This creates a gap that is very hard to bridge. I’ve found when you make everyone feel like they’re part of the process they take ownership of the outcome and will work hard to make sure the team wins. Later I’ll share two of my favorite workshops, the growth hackathon, and shark tank.
9 Keep score
People try harder when they know the score, but they’ve got to know the score before it’s too late to make adjustments. Most businesses could get an immediate boat in productivity if they created and maintained a simple scoreboard. In fact, if the only thing you took away from this post was to read the book “The 4 Disciplines of Execution: Achieving Your Wildly Important Goals” and create your own scoreboard I would be a happy man. In fact, if you do, shoot me an email (see address below) and I’ll send you a free gift. Below is a summary of the top 10 scoreboard best practices:
- If you are not keeping score, it’s just practice.
- A successful scoreboard should be simple.
- A successful scoreboard track leads, lags and Wildly Important Goals (WIG) measures.
- A successful scoreboard should clearly illustrate if you are winning or losing in 5 seconds or less.
- To get the scoreboard right the team should be closely involved in designing it.
- The goal of keeping a compelling scoreboard is to make sure everyone knows the score at all times so they can make improvement plans and just in time adjustments.
- The scoreboard should display actual results, targets, and thresholds.
- The scoreboard should be posted in a highly visible location where the team can see it easily and often by everyone.
- The scoreboard should be easy for the leader to update.
- A great scoreboard should include an explanation of the WIG and measures along with colorful and easy to read graphs.
10 Systematize leadership
Leadership is a big topic and one I’ll cover in greater detail later, but suffice it to say everything I’ve outlined in the first nine commandments won’t transform your organization if they aren’t supported by a great leadership system. In the weeks to come, I’ll share tools, tips, and techniques guaranteed to strengthen your leadership muscles and get everyone on the same page, pulling in the same direction and keep them there.
That’s all for this episode, but before you go I’ve got a favor to ask. If you found value in this post, please like, share and leave comments. Finally, if you or someone you know would like help taking a business to a whole new level without the need for heroic effort, please send an email to Steve@Catalyst4Business.com to receive a complimentary strategy session. Thanks for reading and until next time, think big, start small, grow the right way.