Scaling Up: How to Create an Organizational Foundation for Growth

August 26, 2020
Scaling Up: How to Create an Organizational Foundation for Growth
Successfully scaling up an organization means keeping its original vision insight. This requires developing a plan that brings on the right amount of resources at the right time.

In this article, we’ll look at some common challenges organizations face as they scale and how to overcome them.

Alignment with Business Resources

Scaling up while avoiding chaos means aligning with business resources. In other words, building out the technology infrastructure to support current and future business activities. Technology can automate many tasks, although it does take time to implement automation and verify its quality. However, without the assistance of technology, companies growing quickly can find that they are throwing people at temporary tasks just to put out fires, which can become a downward spiral.

As people are thrown onto tasks that automation should be able to take on, resources dwindle. This leaves the company in constant scramble mode — not enough people to complete necessary tasks and not enough to implement the technology needed to relieve some of the burdens on employees.

From the WorldMarket 2020 In(Sight) Report, “54% of employees believe they could save 240 hours annually through automation.” Allowing employees to focus on more creative tasks and those that involve personal interactions, while delegating repetitive tasks to software allows companies to utilize resources to their fullest extent.

Setting Up the Right Organizational Structures

Going from a small company to a large one is a big change. Depending on how quickly growth occurs, it can be a chaotic transition. Making the transition work without losing people and the company’s vision means devising a plan for successfully scaling up.

For existing employees, moving to a larger company requires a different mindset. The small, intimate, informal company environment they know will not stick in a larger company. As more managers and employees are brought on, the existing environment can become diluted.

As the company grows, it’s not uncommon for teams to begin pulling apart, creating silos. What used to be informal open communication is replaced by bureaucracy and barriers to communication. If management is aware of the potential for silos, they can help ensure communication channels remain open between teams.

In a small company, management is close to employees, allowing them to cultivate effort and talent. As the company grows, this isn’t as easy to do. Finding ways to help employees perform at their best may mean going beyond orientation and basic training. For example, Facebook sends employees to a six-week, hands-on boot camp.

“Hearing a few speeches, giving people a couple of days of training, or coaching now and then isn’t enough to instill and spread excellence,” Robert Sutton, author of the book “Scaling Up Excellence: Getting To More Without Settling for Less,” said to Quick Base.

Employee growth introduces its own complexity.  As more people are added, complexity increases. Increased complexity impacts communication, which can become more difficult. As a result, the company can experience a decrease in agility.

In network theory, as more nodes are added, the network becomes more complex. This theory can be applied to the complexity of company growth.

“There is a lot of evidence that as a team gets bigger than five, and the closer it gets to 10, things get bad–you end up spending more and more time on coordination chores and less and less time doing the actual work,” said Sutton to Fast Company. “You also start having all these interpersonal problems because you’re trying to track the personalities and moods of 10 or 11 people. It’s like going to dinner and having a conversation with that many people all at the same time. Impossible.”

Lean Infrastructure Operations

Lean operations are those that seek to cut out waste. What is waste? According to Lean, it is anything within the production process that doesn’t contribute directly to the end product. Basically, it is a reduction in overhead, inefficient machines, and idle employees.

Lean allows value to transfer directly to the customer. As you can probably imagine, Lean makes heavy use of automation. Besides energy to run computers and machines, automation does not cost anything extra once it is implemented. It is more efficient than using an employee for repetitive, rules-based tasks.

As companies grow, they experience an expansion in bureaucracy or layers of management. For companies that want to remain nimble and react quickly to a changing environment, the additional layers can slow it down.

“Process and bureaucracy aren’t nice words and never desirable, but having processes and structures and clarity is an enabling tool rather than a tool of constraint.” - Guy Sochovsky

Bureaucracy can sound like an evil word, but it is a necessity to ensure chaos isn’t the order of the day. “Process and bureaucracy aren’t nice words and never desirable, but having processes and structures and clarity is an enabling tool rather than a tool of constraint,” Guy Sochovsky, chief financial officer of NewVoiceMedia, a UK-based cloud services company that has grown from 30 to 350 employees in four years, said to the Financial Times.

While bureaucracy can slow down a company, it doesn’t have to. Management that is cognizant of communication issues can work to make them more efficient. It will be difficult for a large company to remain as agile as its smaller self. But it can still remain efficient and take advantage of a changing market.

Acknowledgement: Sources are provided for informational and reference purposes only. DeWitt has no vendor affiliations, offers no products, and has no conflicts of interest.
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