Scaling Up" is a business growth system developed by the team at Gazelles International, a business coaching organisation based originally in the United States but now operating globally. It was developed by Verne Harnish (known as the "Growth Guy" and Founder of the Entrepreneurs Organisation) from his work as an entrepreneur and refined the key leanings and tools that he published in his seminal 2002 Book "Mastering the Rockefeller Habits". Verne and the team at Gazelles refined the model over the years and in 2014 the book "Scaling Up" was released. Subtitled "How a Few Companies Make it...and Why the Rest Don't", it was effectively Version 2.0 of "Mastering the Rockefeller Habits" and forms the basis for the work Gazelles International Coaches undertake with their clients across the globe.
Businesses applying the Scaling Up tools and techniques generally see the following results (compared to similar businesses in their industry):
Double the cashflow
Triple the industry average profitability
Increased valuation (relative to their competitors)
A more controlled and enjoyable growth journey
How is it structured?
"Scaling Up" is based on the premise that you need to get the answers to four key business questions right to be able to Scale Up your business smoothly and quickly. Scaling Up is structured around the four key business areas that represent these key questions People, Strategy, Execution and Cash.
The people decision is all about attracting and retaining the right people and then getting them into the right seats. To do this we need to ensure that the leaders, the managers and the team members all share the same purpose and the same goals and that all functions and processes within the business have clear accountability, clear leading indicators and distinct outcomes. We use tools such as Patrick Lencioni's "5 Dysfunctions of a Team" and Bradford Smart's "Topgrading" to ensure good team health within the business and that anyone joining the business is an A-Player with a great cultural fit.
To scale rapidly we are looking to be able to answer "Yes" to the question - Are all the stakeholders (employees, customers, shareholders) happy and engaged in the business and would you enthusiastically rehire all of them?
The strategy decision is about creating a truly differentiated strategy that is valuable to enough people to drive growth in revenue. To do this we work on the business's core ideologies, their core purpose and their core values so this can be clearly articulated to the team and to new team members as they join the business. We get clarity on who is the core customer and what products and services do they want to buy from you. We identify the brand promise and the catalytic mechanism that ensures there is a cost to the business in not meeting the brand promise. We identify the 3 - 5 year goals and also the 3 - 5 differentiating activities that makes you different from your competitors.
To scale rapidly, we are looking to be able to answer "Yes" to the question - Can you state your firm's strategy simply, and is it driving sustainable growth in revenue and gross margins?
The execution decision is about driving flawless execution. It is about identifying what are the key priorities for the year and for the quarter and then applying relentless focus on achieving these priorities. We identify key metrics (leading and lagging) and then use meeting rhythms to maintain focused discipline on achieving the priorities.
To scale rapidly, we are looking to be able to answer "Yes" to the question - Are all processes running smoothly, without drama and driving industry leading profitability?
The Cash decision is about having plenty of cash to weather the storms because as we know, growth sucks cash. You can get by without decent people, a good strategy and with poor execution for many days but not one day without cash. We'll look at ways we can improve your cash flow, getting cash to flow through your business faster so you can realise the profit more frequently and use this to invest in growth. We'll look at how you can change the cash dynamics of your business by making 1% or 1 day changes to the 7 key levers of the cash side of your business. We'll also look at the various labour efficiency ratios within your business and identify the growth decisions you can make as you move through ranges of these ratios.
To scale rapidly, we are looking to be able to answer "Yes" to the question - Do you have consistent sources of cash, ideally generated internally, to fuel the growth of the business?
How Do You Use Or Implement It?
How do you implement Scaling Up? Some people do it by themselves and this can work, delivering some results relatively slowly. Most businesses who implement Scaling Up effectively work with a Gazelles International Business Coach like myself. If you want to find out more about how to get the growth of a Scale Up in your business, give me a call on 0415 534239.