By: Daniel Marcos, CEO of Growth Institute
Companies, like a living organism, go through different stages of growth. Because human beings need different foods and care at each stage, companies will need certain capital, systems, processes, resources, skills, focus, and number of employees at each stage.
It is not the same to direct and operate a Startup (Stage 1) than a Grow up (Stage 2) than a Scale Up (Stage 3) or a Dominant company in your industry (Stage 4).
In Mexico, most of the companies are in stage 1 and 2 of growth; The problem is that many, although they have great potential, do not know the necessary requirements to pass from one stage to another, being threatened of falling into what I call “The Valley of Death.”
Most of the business content, courses, programs and public investments are aimed at nascent organizations and bypass medium-sized companies, which are more complex to operate and go through the growth stages.
What I have found is that there are three main barriers that these companies need to overcome in order to scale successfully.
Barrier 1: Leadership
What happens in the leadership team is replicated in the rest of the organization. It is critical that leaders have the right mindset and the right tools to make confident decisions that define the direction of their organization.
Leadership is a barrier because without it there is no planning, there are no ideas to execute, there are no replicable systems to operate efficiently. Without strong leadership chaos and confusion prevail: what is important? Where we go? Nobody knows.
As leaders we must empower our leadership with knowledge, by listening to the experience of other leaders and surrounding ourselves with mentors; to build solutions to major problems it is necessary to increase the level of knowledge.
External pressures and a lack of time can complicate it, but whether it is having a learning routine, having a community of peers, and seeking out experts will help and give you an edge.
Barrier 2: Marketing
Marketing is critical both in attracting new customers to the company and in addressing increasing competitive pressures when scaling. The role of marketing is to correctly determine what we should sell to the best who and how we should sell it at the correct price.
Marketing is a barrier because without having a department dedicated to understanding customers and their new needs in the current context, sales growth will never be achieved: the lifeblood of the business.
The situation due to the pandemic generated a whole range of new human and material needs that must be analyzed to adapt products and services as well as the way they are communicated to customers: why is my product or service important today?
Barrier 3: Scalable infrastructure
One of my concerns when the lockdown began a year ago was that many companies were not prepared for it; by having such traditional structures they would be prevented from operating in the digital field.
And it is that a lack of digital infrastructure translates into very manual processes where each person executes them in a different way, there is no technology or mechanisms to make them practical and replicable and, therefore, the results cannot be measured.
Going digital is not only about having a website and social media presence, but about being different in terms of strategy, information, structure, culture, processes, operations, systems, personnel, and key performance indicators. A digital infrastructure is having systems and processes based on technology, software and data that are done quickly, automatically and constantly.
Find out all about the growth stages and receive advice to overcome the barriers that stop your company with the Scaling Up method: implemented by more than 70,000 SMEs around the world with expert advice:
