How does a company scale successfully and efficiently? Of the thousands of startups that crop up every year, less than 5% manage to scale significantly. So what’s the secret behind the most successful companies?
Entrepreneurs Organization (EO) founder and world renowned growth expert, speaker, and author Verne Harnish breaks down the key principles behind creating and refining the daily, weekly, quarterly, and yearly processes that help businesses to scale up.
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The growth trajectory of a scaling company is seldom linear and often chaotic, but the most successful ones have a few things in common.
They establish a set of core values, set immediate, short, and long term goals, and create a strategic talent pipeline that can renew and sustain itself as people move up and move on, and as the company grows and inevitably pivots.
Your Ticket to Growth: The One Page Vision Summary (OPVS)
Think of the one page vision summary as a cross between an origin story of the company’s core values and goals, and the strategic blueprint (or map) for how to get there. According to Harnish, “If you want to get everyone in the company on the same page, then you need to have A PAGE to get them on.”
What it is: The OPVS defines the company’s vision and goals for everyone from employees to customers and investors.
How to make one: Every company’s OPVS will be unique, but there is a formula making it work:
Define your vision: Core values, purpose, brand promises, and the BHAG (big, hairy, audacious goal)
Priorities: What will you focus your time, energy, and resources on for the first quarter, year one, and years three to five?
Objectives: What needs to happen on an individual (employee) and organizational level to achieve the company’s goals? Pro tip: start by thinking in terms of immediate (daily and weekly) and short term (quarterly) actions to move the needle in the right direction
The best of plans are only as good as their execution. Develop a set of “critical numbers” and KPIs to track progress and help team members know how and if they’re hitting their targets.
Understanding the Difference Between Accountability and Authority
Knowing when and how to delegate is an essential survival skill for all founders and entrepreneurs. As companies scale and critical roles are staffed or outsourced, there are three differentiators to keep in mind:
Responsibility: Whose “job” is it? (Hint: it’s everyone’s)
Accountability: Where does the buck stop?
Authority: Who is empowered to make decisions about the “how,” and set the goals and priorities to get you there?
Knowing Who and How to Hire: The Self Fulfilling Talent Pipeline
Even the most brilliant and charismatic founders and leaders need a talented and skilled number two to help build out the infrastructure, especially in the early days. While roles and job descriptions tend to be fluid and non-defined in the beginning, especially for early stage startups, refining job descriptions and staffing them appropriately is an essential process for scaling companies.
Three things to prioritize when building out a team:
Culture fit: Do they share and understand the company’s vision and goals, are they happy to be there, and can they execute?
Autonomy: Can they perform without constant supervision and hand holding?
The “WOW” factor: What’s their “unique selling point” as a team member? Can they perform the task better than you? (If not, why are they there?)
How do you know if you’ve found the one? An autonomous employee with a “wow” factor doesn’t need to be micromanaged. As a rule, it’s fine to start with more general hires and then specialize as you scale. And keep in mind that smart talent will always trump cheap labor.
How to Make it All Work – Don’t Fixate on Problems
Be different. You hear it all the time, but what does it really mean? From pricing to hiring and marketing strategies, success depends on differentiating yourself from the competition in a clear and identifiable way.
Your processes will permeate every level of the business, so how do you decide how to get started and which ones to implement first? Harnish recommends outlining four to nine key processes, but focusing on one at a time to avoid what he refers to as “sub-optimization.” Identifying a constraint, like an opportunity you may not be fully taking advantage of for example, can help to both optimize and choose which process to focus on first.
There is no wrong answer here. The processes are all interconnected, so unpacking one will inevitably lead to progress on the rest.
Getting from Page One to Year Five and Beyond
The greatest battles are typically fought in our own minds as the saying goes. Before attacking the OPVS, entrepreneurs have to face what Harnish defines as the three barriers: mindset, education, and leadership style and skills.
Work on the mindset and leverage the resources and tools for education and leadership, which will underpin the company’s mission and the processes you put in place to achieve it. Figure out what needs to happen today and how to do it, and remember that the best processes need time and constant fine tuning to come to fruition.