UK: Business Scalability: The Human Side

Last Updated: 9 November 2011

Scalability – the potential of a business to continue to function effectively as its size increases – is essential for sustainable business growth. Scalability therefore looms large in any discussion about business models. If you want to grow your business, the first question is: do you have a scalable business model?

Companies pursuing scalability typically focus on financial, technological or physical resources. However, discussions about scalability often fail to address the human side of scaling a business. We believe that the financial, technical and physical resources required to scale a business, although certainly not easily obtained, are more available than the most scarce resource today – talent.

Scarcity and the price of talent

For years, we've been imploring clients to aggressively compete for talent. Apparently business leaders have now understood, because talent is becoming increasingly scarce. And we all know what scarcity will do to the price of talent.

This is all the more reason for CEOs – especially those concerned about scalability – to commit to developing their people through coaching and teaching.

Why the CEO must be a leader of leaders

One of the six major roles of the CEO is that of coach, which involves all the ways that you can help your people develop professionally. And for key executives, as with the CEO, one of the major challenges is to become better leaders.

Scalability requires the CEO to become a leader of leaders; to not only practise leadership but to teach leadership as well. For many, this means learning a whole new skill set and developing the willingness to go beyond their comfort zones.

But for entrepreneurial business leaders, the reward for this clarity, focus and commitment to the CEO role is the ability to continually scale or grow your business.

The good news is that numerous resources are available to help CEOs accomplish this challenging task of becoming a leader of leaders, thus ensuring the scalability of their business.

Six key roles of the key executive

Like CEOs, key executives in entrepreneurial companies have six essential roles. Some of these coincide with the six essential roles of the CEO, while others reflect the more operational nature of the position.

  1. Co-strategist. First and foremost, key executives must contribute to the development of strategy. They must use the knowledge and information they gain from their critical vantage points to help set the future direction of the company.
  2. Team leader. Like the CEO, key executives must make the difficult transition from functional expert to leader. They may go kicking and screaming, but you must drag them out of their familiar, comfortable, functional roles and into this new, ambiguous and demanding role of team leader.
  3. Content expert. In their specific areas of knowledge or expertise, key executives need to bring global best practices to bear on the current, everyday practices of the company.
  4. Champion of change. Key executives need to beat the drum, wave the flag and point their people in the right direction, while constantly reinforcing the vision of why the company must go forward.
  5. Role model. Key executives must march shoulder to shoulder with the CEO, living the values that are spoken for the company.
  6. Student. As with the CEO, key executives must engage in continuing professional development – but as students of leadership, not of the technical/functional turf they manage within the organisation.

The true drivers of scalability

To scale the business, CEOs need the input and contributions of key managers and executives.

If your key executives are not sharing ideas and giving suggestions for new products and services or new markets and distribution channels, their lack of input should become a major topic for discussion in your CEO/direct report one-to-ones.

Make sure that the one-to-one is used for discussion of strategy, both long term and big picture, and not just for day-to-day operational issues. A major challenge for key executives (and indeed the rest of us) is that we can become victims of our own success. We want to continue doing what has worked for us in the past.

As CEO, you need to challenge your key executives to get outside their comfort zone and technical/functional ability and move more into the leadership role. The one-to-one is the ideal place to have that conversation.

Scalability and middle management

Another major challenge to scalability is the middle management team below the senior team members. A major bottleneck for growth can occur if talent development, coaching and supervision are not used at this level.

To prevent this bottleneck and improve scalability, senior executives must do with their own team members what the CEO is doing with them: focus on developing their people beyond their technical/functional roles.

Driving communication and speed

For growth to occur, decision making must be pushed further and deeper into the company. That means more decisions, better decisions and quicker decisions. This will drive communication and speed to the customer, and contribute to developing a culture with a strong sense of urgency. It will also allow for a major strategic differentiation of speed with quality, which will be a leading contributor to the scalability of the business.

We don't equate teams with good morale or improved satisfaction or any of the other common descriptors. Instead, we equate teams with the degree to which the group can diagnose a situation, make a decision, take action, and learn from the results. In order to perform at this level, the team must surpass the barriers to communication of mistrust, lack of candour, politics and other interpersonal issues. Such an environment allows for decisions to be made, for the customer to be the focus, and for execution to be the norm.

Ultimately, innovation, strategy and execution drive scalability.

However, these can only occur on a consistent basis when leadership, talent and talent development are inherent ingredients of the culture. Because the CEO is the architect of the culture, it comes full circle to the clarity, focus and commitment he or she has to the true role of the CEO.

Overcoming the psychological barriers to scalability

The question immediately arises: if the benefits to scalability of clarity, focus and commitment are so strong, why aren't more CEOs involved in this process? We believe the answer has to do with the psychological barriers CEOs face as they attempt to scale or transition their business.

Personal change often gives rise to doubt, procrastination and projection. As human beings, we much prefer to go back to where it feels comfortable and where we know what we're doing.

How can you get past this human tendency to retreat into that safe space? Through introspection, candour and responsibility. This involves four steps.

  • Create your high performance profile. Have a "fierce conversation" (to quote Susan Scott's book title) with yourself. Identify your personal leadership style by looking at your career as a leader. Pinpoint three of your successes and three of your failures, especially relating to major transitions in a company, department or assignment. Analyse these experiences for their commonalities and ask: "What kind of patterns emerge? What consistencies are present?"
  • Test your profile for accuracy. Take your profile to people who know you well and can be brutally honest with you. See if your profile corresponds with how others actually see you. Make sure you are creating a real and not a hoped-for or idealistic profile.
  • Understand your scalability challenges. Use your profile to analyse and understand the challenges of scalability that you face. What are the strengths you bring to the situation? What are the limitations? Where are your doubts and anxieties likely to occur? Does this lead to procrastination on your part? Do you have a tendency to project blame onto others rather than taking responsibility for yourself?
  • Forget about what other CEOs would feel or do in this situation. This is about you. A basic premise of psychology is that once you own a feeling state, you have much more choice in what you do with it. Denial clouds the process and is a leading contributor to procrastination.
  • Create and commit to an action plan. Once you understand your personal leadership challenges, share them with your trusted advisors. Have them help you create a realistic action plan and invite them to hold you accountable to the plan.

Keep in mind that progress will not always be linear or rational, but it will occur as long as you stick with it.

When you stay resilient and committed, the rewards can be profound and enormous. You can become a true CEO, a leader of leaders. Most of all, you can continually scale your business and have the success you want and deserve as a CEO.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.