When the topic of scaling comes up, almost all of the people I talk to first think bigger, better, more international. And names like Amazon, Airbnb or Uber quickly come to mind – companies that have managed to develop from a startup into a multinational player. Scaling is an issue for companies of all sizes. And for some companies, there are good reasons not to grow, but to deliberately cut back in order to survive in changing markets.
More customers, higher sales, new business areas – those who want to achieve this are faced with important questions: How can you expand your offering and reach larger markets without compromising quality? How can you grow bigger and remain profitable at the same time? And how can we succeed in making this growth sustainable? Anyone who follows the business news knows that not all scaling is crowned with success.
The challenges of scaling
For me as a consultant, scaling means keeping an eye on very different issues – from resource management to process optimisation, market research and, above all, the people who work for the company and stand for its results. During the pandemic, we saw how quickly some companies ran short of important resources – not just raw materials, but sometimes things previously taken for granted, such as pallets. At present, we are observing where things are getting stuck in terms of digitisation. And the biggest bellyache for virtually all industries is when it comes to personnel. The market for skilled workers in some occupational fields has been swept clean, and headhunters are in high demand. Beware of companies that have not nurtured their corporate culture or misjudged team dynamics – they are usually the first to fall by the wayside in the “battle for talent” and loose valuable employees.
Strategies for successful scaling
Which brings us to my favourite topic when it comes to scaling: strategy, or rather, strategies. I’m often surprised at how little long-term thinking company leaders do, yet strategy is THE key to successful scaling: What is the vision, where should the company go? What resources are available, for example for investments in technology and automation? What requirements need to be met by the team, how can talent – also internally – be identified and promoted? Which (cooperation) partners could contribute to success? Is the corporate structure set up flexibly enough to react quickly to changes? And last but not least: How do we set up sales and marketing to achieve the greatest possible customer satisfaction?
Downscaling – why not?
After upscaling, let’s talk about downscaling – an approach that many companies don’t have on their radar when they approach me. In fact, sometimes it makes sense to bake smaller but better rolls and deliberately sacrifice size and/or reach. For example, markets are sometimes smaller than expected, but the product is so successful in these smaller markets that it is worth staying on the ball. Or the competitive situation changes so that it makes sense to focus on existing core competencies. Political changes can also mean that downscaling makes sense; just think of the closure of numerous company sites in Russia since the start of the Ukraine war. A successful example of downscaling are bakeries such as the Bread Purists in Speyer, which are removing rolls and sweet bites from their product range and instead focusing on baking high-quality breads. The double benefit: Satisfied customers because the breads taste good and are more digestible, and satisfied professional staff because of the lack of early shifts. As the example shows, downscaling should therefore also be strategically well thought out in order to achieve important corporate goals.
Are you currently dealing with this topic, do you need professional assistance or a competent sparring partner? Then please feel free to contact me.