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Scale or Die Jukka Ala-Mutka Breakfast

Scale or Die

You have no choice: it’s either scale or die. You might have established start up business a couple of years ago. You’re likely to find yourself in one of the following situations:

  • You reach for your mobile after one-hour-meeting with a customer. There are over 100 new messages.
  • The customer data is scattered in different silos. Sales, Customer Service, and Product Development use their own separate data system.
  • A new employee asks what’s been decided about matter X, and no one in the room knows.
  • A customer asks to see ISO 27001 certificate. Coders stop their work: “What is ISO 27001?”

Scaling up means new challenges. Being Due Diligence ready at all times is one of those. Your investors, advisers, and board members will now closely follow your decision making.

The past fifteen years, I’ve been researching fifty growth company of which total of fifteen companies during the last year. The most painful bottlenecks that I’ve identified during the scaling up process are communication, decision making and organizing, and compliance (conforming to rules and policy).

Communication is easy in the beginning. Even twenty persons can manage to keep up a reasonable discussion online. When there are fifty participants, communication via emails and different chatters is a nightmare. The best ideas are buried in feeds, some never see the discussion at the right time and therefore cannot open their mouth at the right time, either. Also, customer data is scattered in emails, Kanban tools, chatters, and CRM.

In addition, the monthly costs of all these tools are high even if individual tools are affordable. And are you really going to hand customer five different usernames and passwords when you start collaborating?

Challenges in decision making and organizing are very much alike with communication problems. They are just way trickier. Communication methods can be fast changed but decision making is another case. Efficient decision making is all about the mentality of teams. Distributed decision making is a base for the culture of experimentation. Without good experiments, good decisions cannot be reached.

I have defined that people are still moderately self-managing in a company of 50-60 employees. After this, moderate self-management collapses if nothing is done to prevent it. The only possibility at this point is to set up a hierarchical organization but companies usually face difficulties to find competent middle managers experienced in growth phase. The momentum to lay foundations of the desired culture should have been when there were still twenty of you fitting in one room. You’re late if you start designing culture when the quantity of staff doubles every year. I have written earlier that there’s no one-size-fits-all solutions when self-management culture is being built in the company.

Third common obstacle is compliance. A new investor might demand that a big accounting firm will start doing your bookkeeping. Also, investors, advisers, and customers require certificates, audits and standards. Your audit trail of decision making and proved risk management are minimum for your customer before they even consider buying from you.

It’s either scale or die. Come to hear how to avoid bottlenecks and what happens after market validation. I’ll be speaking at Fingertip Breakfast on Tuesday, March 19th starting at 8.00. a.m.  Register here. Looking forward to seeing you there!

Jukka, CTD

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