Scaling a business can be both an exciting and daunting experience. On the one hand, growth can bring new opportunities and increased revenue. On the other hand, scaling can also lead to a host of challenges that can impede a company's progress if not handled properly. In this blog, I will share my personal experiences on the topic, focusing on company culture, executing growth plans, speed, and the importance of HR in the scaling process.
Culture: One of the most significant challenges that arise when scaling a business is the issue of company culture. As a company grows, its culture can become more diffuse. This usually happens when executing on the growth plan, which involves hiring many new people or acquiring new companies as part of a merger and acquisition strategy.
Executing the Growth plan: Executing a growth plan typically involves hiring many people in the Go-To-Market (GTM) department. You or your teams have determined the best way to grow your business, which, in a SAAS company, is focused on annual recurring revenue (ARR). The Go-To-Market machine is firing on all cylinders and you know where to invest your money and time.
Side note: Go-To-Market machine is focused on growing the company's annual recurring revenue and is a well oiled team that knows how to get the job done. It usually consists of the following focus areas: Marketing (the lead machine)-> Sales Development Representatives (follow-up the leads)-> Account Executive (closes deals)-> Customer Experience (Implementation)-> Customer Success (Churn and upsell).
In order to execute on the strategy you need the right people, at the right place and you need to make sure that you create the right environment where they can perform optimally. HR is a vital part of making this a success. Before you are able to really scale your GTM team you need to have your hiring and HR machine ready. HR can perform best if the following parts are very very clear:
- Clear vision for the company, it's ok if this is a little bit abstract as long as every employee can explain it in his own words (it helps if you have a culture deck). What do we aspire to accomplish?
- Strategy, what are our company goals. These goals should be reachable, don't make the mistake in having unreachable goals, this is very demotivating for the teams. You want them to reach the goals, to earn the bonuses, to be successful and have that positive energy in your teams!
- Tactics, how are we going to reach our goals and what do we need for this?
- Executing, who is going to do what, when and how?
HR can only execute on the fourth point if the other three are clear. There is always a war on talent, everybody wants to hire the best people for their company. These four points help you in this journey. Side note: In my opinion the main goals for HR are hiring, talent development and company culture.
Speed: Speed is also a critical factor to consider when scaling a business. As the company grows, there may be a sense of urgency to fill positions to keep up with demand, which can lead to rushed hiring decisions. This can be a costly mistake, both in terms of the financial resources required to recruit new employees and the potential damage to the company's culture if the wrong people are hired.
Now don't get me wrong, It is essential to keep in mind that you need different people per phase of growth, and not everyone can keep up with the company's rapid expansion in terms of personal growth. This is fine and these people can still deliver huge value for the company. However, to keep growing sustainably, you need more experienced people who have done it before, are not afraid to get their hands dirty, and fit into the culture you want to grow.
Side note: As CEO/Founder, it is an interesting exercise to think about the future culture of your company and how to grow into it. The people you hire will shape this culture with you.
In conclusion, scaling a business is an exciting but challenging process. As a company grows, it is essential to pay close attention to culture, hiring practices, and HR/recruitment processes to ensure that the company's growth is sustainable and its culture remains strong. By taking these steps, companies can overcome the challenges of scaling and continue to thrive in the long run.