Rethinking Scaling…..

Scaling is “in fashion.” Our feeds are filled with discussions about scaling, growing regardless of cost.

The strategies on scaling have been reduced to mathematical equations that “perfectly” predict how to achieve our goals. Want to grow by 100%, easy—double your outreach and activities, double your pipeline, “poof” you’ve scaled. The path to 100% growth has been mapped. Afterall, math doesn’t lie.

And sometimes, if the math doesn’t work perfectly, so we adjust our equations. We might need more outreach, more activities, rather than doubling them, we have to increase them by 2.5 times, but the math works.

And there is all the related math. We calculate the marketing activities needed to support our selling activities. We look at the capacity of our people, and scale them, adding more selling widgets based on the math. It’s all in the equations.

And sometimes this mathematical approach to growth works……

What’s interesting to me is there is seldom a mention of the customer, the market, other than they are the objects of our activities.

But even when it does, are we missing the real opportunity to grow? Can we grow at even a greater level than our mathematical equations show us? Can we look at the opportunities and markets differently? Can we challenge ourselves to think differently?

Can we imagine new possibilities?

Recently, I’ve worked with several organizations in re-imagining growth. What they have discovered could never have been done simply by running our scaling equations.

What they did is re-imagined possibilities. Then they asked themselves the question, “What do we have to do to achieve this?”

One is a very large, mature organization generating 100’s of millions in revenue. They had an enviable growth record and great success.

When we started looking at the plan, we knew that management expected a 20-25% YoY growth. But as we looked at it, we asked ourselves the question, “Why should we limit ourselves to this? Could we do more, what would it take?”

Rather than looking at how they did more, we started by looking at their markets. We had very good data on the target markets and their penetration of those markets. We started noticing disparities across regions. We saw one region driving about 60% of revenues with the rest of the world contributing 40%. While each region was meeting it’s goals, several of the regions weren’t achieving what was possible.

Looking at the market data, we recognized the market was roughly evenly divided across all the regions, yet one region was performing at about 3 times the levels of the other regions. It didn’t make sense, there was huge opportunity they should have been capturing in the those regions, but they weren’t.

In fairness to the regional leaders, they had been developing their plans based on traditional scaling math. The corporation was challenging them to grow 20-25%, and they developed and executed plans to achieve that. But they were never challenged with the question, “What might be possible?”

As we looked at the disparities across the regions, the leadership team started posing different questions. The lower performing regions said, “Why should we limit ourselves to 20-25% annual growth, what would it take to achieve 50% growth?” They needed to change some of their focus areas and strategies. They discovered they were getting the business they were getting, but not focusing on the the most important customers in the market. They realized if they shifted their focus, the results would skyrocket.

As they developed their plan to achieve this vision, they needed some additional investments and resources to execute their plans–and since they could model them after the success of the one region, the risk was very low. They went to the corporate leadership team saying, “We see different possibilities. We see, over the next few years, coming close to the same level of performance as the highest performing region. We need your support in achieving our dream….”

A second company, an early stage start-up was developing their growth plan. They had very aggressive scaling goals, had run the math about what it would take, based on their performance to date. As we started looking at the plan, we decided to look at it differently. I challenged them with a BHAG. I posed an 18 month goal that was 2-3 times their planned goal. “Humor me, what would you have to do differently to achieve this goal?”

As they started running the math, it looked impossible. “Our target markets are…. our average deal/seats size is….. our win rate is…. our sales cycle is…..” Running the scaling math, it was impossible to achieve the goal. Then they started rethinking. What if we could change our average deal size? We started looking at what would happen if they could 10X the average deal size. All of a sudden, they started seeing new possibilities. They recognized these larger customers had a strong need for their solution–in fact there was an argument the need was even stronger because of the value proposition they offered.

All of a sudden, what had seemed impossible, actually looked like an easier path forward than their original plan. We looked at the end goal–18 months, started mapping where they needed to be in 9 months, and in 6 months, and 3 months. We started identifying specific action plans to shift their targeting and engage these larger customers more effectively. We looked at leveraging board members and advisors that could help open doors to those customers. All of a sudden, this BHAG goal seemed much more achievable than their previous smaller goal.

Our traditional scaling methodologies, when and if they work, limit our thinking. Running the math to achieve a goal is driven by the assumption that we continue doing the same things to the same people in the same way.

These scaling methodologies don’t challenge us to imagine new possibilities. They keep us from looking at our markets and our customers differently. They keep us from innovating and achieving our a greater potential.

Our scaling conversations are usually internally focused, driven by what we want to inflict on our customers. What would happen if we started looking at our markets and customers, what they want to achieve and how we can help them achieve it? We’ve done this dozens of times over the past several years. Almost every time, we’ve found the possibilities are greater than our scaling formulas would suggest.

Afterword: Below is the AI discussion of this post. I’m using Google Notebook. I’m always fascinated with the discussions it generates. In virtually every discussion, it raises ideas I didn’t think about. In this, it takes my ideas about re-imagining organizational and corporate growth, extending it into personal growth.