An entrepreneur’s drive to scale one’s business is an admirable quality. It is this drive that is an ally to one’s repertoire of skills and often regarded as a personal measure of true success.
While most believe that capital infusion is directly linked to scalability, there are several other nuances and underpinnings of building a sustainable offering. Customer Focus, Leadership, People, Operations, Finance & transactions, Risk management, Technology are the seven essentials of growth and key drivers of scalability.
It is, in fact, the lack of scalability which is the topmost reason why businesses fail and a collective approach to these seven factors that can help entrepreneurs spur sustainable growth in their emerging businesses.
Understanding Scalability For Businesses
Scalability as a term is commonly used in today’s fast-paced business environment where the focus on customer satisfaction is at an all-time high. Scalability means growth which extends to your stakeholders; whether customers, employees or vendors. In other words, it is a positive influence that propels you further. This calls for a more prudent approach where entrepreneurs must take a moment to define ‘scalability’ for their own firms so that they can clearly distinguish between in-house needs versus populist expansion tactics driven by temporary market trends. This means it is important to realise that different businesses require different scaling techniques.
How Can Entrepreneurs Grow And Thrive?
In pursuit of their vivid imaginations of building a secure livelihood for the community or improving the standard of living in a rural setting; entrepreneurs go through a mix of emotions and feel vulnerable to failure at crucial moments in their journey.
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The first step here is to redefine failure and view it as learning.
As mentioned before, I have always felt that sometimes you win; sometimes you learn. There is no contention about the support each entrepreneur needs during the journey towards growth. That’s what motivated us at ASCENT to probe further into the riders of scalability.
At the cusp of growth, entrepreneurs find themselves waging a tiresome, lonely battle on account of being stretched. As the business grows; the weight of responsibility increases. For instance, the focus or goal may remain unchanged – whether profitability or fixed revenue but with scale, it gets more challenging to maintain or achieve the same. Other areas where they get stretched include innovation, expanding revenue per customer, entering new territories, expanding product offerings, or even branding and maintaining standards or ethics. This is a crucial phase where the ‘leader’ inside every entrepreneur needs to emerge stronger than before. Good leadership skills can help entrepreneurs circumvent complex situations or deadlocks in their journey.
To hone these leadership skills, it is essential to find the right platform and interact with like-minded entrepreneurs who are battling the same challenges. Peer-to-peer platforms bring entrepreneurs together serve as a great discussion platform that offers unique perspectives. These dialogues enable entrepreneurs to not only learn from others but also help one another the path they would like to steer their venture towards. In that effect, entrepreneurs play the roles of advisors who help one another make important decisions.
Leadership During Scalability
Leadership is a quality that needs to be honed over time. At times, a leader may need to look at simple solutions to issues or uplift the team’s morale in order to keep them motivated. The Indian work culture is being reshaped with the advent of start-ups; access to funding the intrusion of technology; improvement in human capital and Government efforts to make the environment more conducive to doing business. Today’s leaders will create precedents and must maintain the highest standards of integrity and ethics if they really want to emerge as respectful change agents in society at large.
Leaders must realize that while their responsibility increases with each passing day empowering team members is as crucial. Team members should be given freedom to experiment and innovate for organizations to witness progress. When team members are confident that their risk appetite to innovate will be encouraged and appreciated, organizations are one step closer to creating a conducive work culture fostering growth and development. Such a working environment plays a catalytic role in the scaling of an enterprise.
Building Capabilities Around Seven Key Drivers
A focused strategy which clearly defines the roadmap backed by good communication across functions can ease pressure in pursuit of scalability. In addition, it is crucial for entrepreneurs to stay committed to improvements and alignments in the seven key drivers of scalability outlined earlier. Investments in these seven areas form the cornerstone of a successful expansion strategy in today’s dynamic market scenario where consumers across age-groups are constantly evolving. First, entrepreneurs must analyze their level of influence or commitment in these areas and identify their pain points. Simply injecting funds to bring in new technology or hiring executives is often a commonly used tactic. However, that often leads to stunted growth – progress which seems exciting at the outset but later proves to be an expensive proposition with little or no returns.
The thumb rule of businesses across ages and spheres is to never stop progressing on your internal capabilities – whether it’s people, products, resources or a combination. These core areas constitute internal capabilities that need to be consistently sharpened to align and eventually exceed customer expectations. It is a safe bet to focus on areas where you already occupy a certain level of expertise. Switching industries or unrelated diversification is tougher than it seems and usually creates limitations towards growth. The way forward is to make sound investments in these drivers; some of which may require attention sooner than later. These drivers are inter-related where one influences the other. For example; if you seek loyal customers; you need to invest in technology to ensure you match their expectations. For that you need good leadership; to think on those lines and hence you may need people. So, in a way, these drivers are like forces that culminate into success.
Lastly, it is important to not lose sight of the firm’s original vision along this journey. While it is fine to periodically review the vision or set a new one if there is an acquisition; it should be followed as far as possible in order to avoid confusion and delays. Scalability is an exciting and challenging journey which calls for patience,
Scalability is an exciting and challenging journey which calls for patience, wisdom, and commitment. It is not a theatrical display of one’s financial muscle or ability to make acquisitions. I encourage all entrepreneurs to make their journey worthwhile.