In today's world of startups and entrepreneurship, many business leaders dream of taking their companies to the next level through rapid growth. But scaling an organization successfully is no easy feat. It requires a specific mindset, strategy, and set of skills that differ from those needed to launch a startup.
In his book "Do Scale," Les McKeown provides a practical guide for leaders looking to scale their organizations in a sustainable way. He outlines the key principles and practices needed to increase market share dramatically while building the infrastructure to support long-term growth.
Introduction: The Allure and Challenge of Scaling
We live in an age of startups and entrepreneurship. More people than ever are launching their own businesses and organizations to bring innovative ideas to life. For those who find initial success, the prospect of scaling up to reach a much larger market is incredibly enticing. The idea of skyrocketing profits or massively expanding the reach of a charitable cause is hard to resist.
However, McKeown cautions that scaling requires a very different approach than starting a business from scratch. Many of the instincts and strategies that served entrepreneurs well in the early stages can actually hinder growth when trying to scale. Unless leaders understand what scaling truly entails and how to do it effectively, the odds of failure are high.
This book aims to set leaders up for scaling success by explaining:
- What scaling really means and how it differs from other types of growth
- The mindset and skills leaders need to cultivate to scale effectively
- How to create the right organizational structure and decision-making processes
- Common pitfalls to avoid when scaling
By following the roadmap laid out in "Do Scale," leaders can dramatically increase their chances of taking their organization to the next level in a sustainable way.
What Scaling Really Means
Many business leaders assume scaling simply means growing bigger. But McKeown emphasizes that scaling is a very specific type of growth with particular characteristics:
Scaling vs. Linear Growth
Regular business growth tends to be linear - steady, incremental improvements in things like product quality, profitability, or market presence over time. When graphed, this looks like a straight line angling upward.
Scaling, on the other hand, aims for dramatic, exponential growth - typically focused on rapidly increasing market share. On a graph, this looks more like a "J" curve, with a slight dip at first followed by a sharp upward spike.
The Primary Focus: Market Share
The key distinction of scaling is that increasing market share becomes the primary focus of the entire organization. Everything else - even important priorities like product quality or employee training - must become secondary to this main goal.
This single-minded focus on market share is what allows for such rapid growth. But it also requires difficult trade-offs and a willingness to deprioritize other worthy objectives.
Not Right for Everyone
Because scaling demands such a dramatic shift in priorities, it's not the right path for every organization. McKeown uses the example of Jim, a guitar maker whose business was thriving. Jim considered scaling but realized it would mean spending less time on his true passion of crafting world-class instruments. Instead, he chose to sell his business to a larger company and continue as an artisan.
Leaders must carefully consider whether scaling aligns with their core values and long-term vision before pursuing it.
Scaling vs. Flipping
For those set on rapid growth, scaling isn't the only option. McKeown contrasts scaling with another approach called "flipping."
The Flipper Mindset
Flipping aims to generate maximum market share as quickly as possible with the goal of selling the business to a buyer. Flippers will often invest heavily in marketing, sell products below cost, or even give them away for free - sacrificing everything for immediate growth.
The Scaler Mindset
Scalers, on the other hand, seek sustainable long-term growth. They focus on steadily increasing sales of products/services rather than trying to sell the company itself.
McKeown uses a real estate analogy to illustrate the difference:
- Scalers are like property developers who carefully design and build neighborhoods for long-term profit.
- Flippers are like house flippers who quickly renovate and resell for a quick profit.
Choosing Your Path
Whether to scale or flip depends on your circumstances and goals. Flipping can make sense if you don't have the resources to sustain long-term growth. For example, an app developer who's poured all their ideas into one hit game may be better off selling to a larger company that can take it further.
But flipping is risky - many leaders fail to find buyers. Scaling offers more sustainable growth for those in it for the long haul.
Creating a Scale Vision
For leaders who decide scaling is the right path, the next step is developing a clear scale vision to guide growth. This vision should outline specific goals for how you want your organization to grow.
Key Elements of a Scale Vision
A strong scale vision should address:
Growth benchmarks - How you'll measure success (profit, market presence, customer base, etc.)
Target market segments - Which specific markets you want to expand into
Growth potential - The maximum possible growth in your sector
Time frame - A realistic but ambitious timeline for achieving your goals
Vision statement - A concise summary of your scaling goals
Sample Scale Visions
McKeown provides examples of what scale visions might look like for different types of organizations:
Commercial business: "Over the next three years, we will scale Cameron's Cafés by opening six new cafés across Texas."
Revenue-focused: "In five years, we will scale Toni's Toothbrushes to $85 million in revenue through sales across the USA and Canada."
Non-profit: "By 2022, we will scale Free Meals for Kids to deliver daily breakfasts to underprivileged students in 45 schools across Louisiana."
This scale vision becomes your "True North" - keeping you oriented and on track as you navigate the challenges of scaling.
Retraining Your Instincts
One of the biggest mindset shifts leaders must make when scaling is learning to rely less on gut instinct and more on data-driven, team-based decision making.
The Limits of Visceral Management
In a company's early stages, leaders often rely on "visceral management" - making quick decisions based on instinct and experience. This works well for small, agile startups.
But scaling is far more complex. Continuing to use visceral management when scaling will likely lead to poor decisions and organizational dysfunction.
Why Gut Instinct Falls Short
There are several reasons why relying on instinct becomes problematic when scaling:
The need for hard data - Anecdotal information is no longer enough. You need solid data to make good decisions.
Time constraints - Leaders won't have time to be involved in every decision.
Expertise gaps - Leaders won't always be the most qualified to make every decision as the organization grows more complex.
Rules for Retraining Your Instincts
McKeown outlines six key rules for leaders to follow as they shift away from visceral management:
- Always assume you don't know everything
- Assume decisions improve with others' input
- Identify the best advisors for each decision
- Diligently store data for quick retrieval
- Delegate decision-making as much as possible
- Stay informed about others' decisions to fine-tune your intuition
Following these rules helps create the discipline and team-based approach needed for effective scaling.
Embracing the Mundane
Another major mindset shift for entrepreneurs is accepting that scaling involves a lot of mundane, repetitive work. This can be deeply frustrating for visionary leaders used to the excitement of launching new ventures.
The Entrepreneur's Dilemma
Most entrepreneurs are drawn to autonomy, flexibility, and creative problem-solving. But scaling requires intense focus, consistency, and often tedious operational work.
This clash between entrepreneurial instincts and scaling demands often leads to leader burnout or self-sabotage.
Signs of Scaling Frustration
Leaders should watch for warning signs that they're struggling with the constraints of scaling:
- Constantly wondering how long you can keep it up
- Telling yourself you're fine when you're not
- Micromanaging because you don't trust others
- Expecting unrealistically fast results
Strategies for Coping
To avoid imploding from scaling frustration:
Create outlets - Find ways to scratch your entrepreneurial itch, like advising other startups
Delegate more - Train staff or hire contractors to take on operational tasks
Reset expectations - Accept that scaling takes time and isn't always exciting
Practice self-awareness - Pay attention to your self-talk and frustration levels
By consciously managing your reaction to scaling's demands, you're more likely to see it through successfully.
A New Approach to Decision-Making
One of the most crucial shifts leaders must make when scaling is adopting a more systematic, team-based approach to decision-making. McKeown calls this "High-Quality Team-Based Decision-Making" or HQTBDM.
Key Components of HQTBDM
Team-based decisions - Move away from individuals making isolated choices
Separate decision-making from implementation - Leaders should focus on decisions, not execution
Slow down the process - Take time to analyze data and consult others before deciding
Treat data as sacred - Base decisions on hard evidence, not assumptions
Benefits of HQTBDM
While this approach may seem slower at first, it actually enables faster implementation. By thoroughly vetting decisions upfront, you avoid costly mistakes and delays down the line.
HQTBDM also creates more buy-in across the organization since more people are involved in the process. This leads to smoother execution of strategic initiatives.
Building Your Decision-Making Machine
To implement HQTBDM effectively, you need the right organizational structure. This is where a well-designed org chart becomes crucial.
Crafting an Effective Org Chart
McKeown outlines key steps for creating a functional org chart to support scaling:
Map what employees actually do, not just official job descriptions
Clarify reporting structures and chains of command
Optimize information flow between departments
Identify missing roles needed for scaling
Pencil in future positions you'll need as you grow
The Importance of Lateral Management
Beyond vertical management (overseeing direct reports), scaling requires strong lateral management - the ability to make decisions that benefit the entire organization, not just one's own team.
To foster lateral management:
Have managers verbally commit to prioritizing company needs over team needs
Identify each team's "internal customers" (other departments that rely on them)
Encourage open communication and constructive dissent in meetings
By creating clear structures and expectations around decision-making, you set your organization up to scale more smoothly.
Putting It All Together
As we've seen, successfully scaling an organization requires leaders to make significant shifts in how they think and operate. Let's recap the key elements needed to scale effectively:
1. Clarify Your Scale Vision
- Define specific growth benchmarks and target markets
- Set realistic but ambitious timelines
- Craft a clear vision statement to guide your efforts
2. Retrain Your Instincts
- Move away from gut-based decisions
- Embrace data-driven, team-based approaches
- Follow the six rules for retraining entrepreneurial instincts
3. Prepare for the Mundane
- Accept that scaling involves tedious operational work
- Create outlets for entrepreneurial energy
- Reset expectations around timelines and excitement
4. Implement HQTBDM
- Slow down decision-making to improve quality
- Separate decisions from implementation
- Treat data as sacred
5. Build Your Decision-Making Machine
- Create a functional org chart
- Clarify reporting structures and information flows
- Foster lateral management across teams
6. Cultivate the Right Leadership Qualities
- Let go of tight control
- Delegate more responsibilities
- Regulate visionary tendencies
By methodically implementing these principles, leaders dramatically increase their odds of scaling successfully.
Common Pitfalls to Avoid
While following the roadmap above sets you up for scaling success, there are still some common traps leaders fall into. Be on guard against:
1. Premature Scaling
Trying to scale before you have a stable, profitable business model is a recipe for disaster. Make sure you have strong product-market fit and consistent revenue before attempting to scale.
2. Scaling Too Quickly
Rapid growth can quickly outpace your ability to hire, train, and create needed infrastructure. Be ambitious but realistic in your growth targets.
3. Neglecting Culture
In the rush to expand, it's easy to lose sight of the values and culture that made your organization successful. Make preserving culture a priority even as you grow.
4. Insufficient Capital
Scaling requires significant investment. Make sure you have the financial runway to support your growth plans before launching them.
5. Poor Hiring Decisions
Bad hires become exponentially more damaging as you scale. Take the time to carefully vet candidates, especially for leadership roles.
6. Ignoring Customer Feedback
Stay closely attuned to your customers as you grow. Their needs and preferences should continue guiding your scaling decisions.
7. Losing Focus
It's tempting to pursue every opportunity that arises when scaling. But spreading yourself too thin leads to poor execution. Stay laser-focused on your core scaling objectives.
By proactively addressing these common pitfalls, you further increase your chances of sustainable scaling success.
Conclusion: The Rewards of Effective Scaling
Scaling an organization is an immense challenge that pushes leaders far outside their comfort zones. It requires fundamentally changing how you operate, make decisions, and even think about your role as a leader.
But for those willing to put in the work and follow a thoughtful scaling strategy, the rewards can be truly transformative. Successfully scaling allows you to:
- Dramatically expand your impact and reach
- Create more value for customers and stakeholders
- Build a robust organization that can thrive long-term
- Achieve ambitious growth goals
- Take your vision to the next level
By understanding what scaling truly entails and how to do it effectively, leaders set themselves up to write the next chapter in their organization's growth story. While the journey of scaling is rarely easy, for the right leaders and organizations, it can be immensely fulfilling.
The principles and practices outlined in "Do Scale" provide a valuable roadmap for this journey. By following this guidance and remaining adaptable along the way, visionary leaders can turn their scaling dreams into reality - creating thriving organizations that make an ever-greater positive impact on the world.