Latest / Integrity at Scale™ / What Breaks First When A Business Scales
Transcript
- Hey, friends. Okay, so you are here because you wanna know what breaks first when a business scales, and I will tell you my short answer is I don't know/it depends. And that's because your business is different from mine. My name is Dr. Tara Vossen Kemper. You are listening to the Culture Focus Practice podcast. Thank you, of course, for being here with me. So when a business struggles as it grows, leaders want to know, I don't know about you, I mean, fuck, I want to know as a leader, what the hell happened? What broke first? What is the most important thing that broke? What do I do about this? Was it the people? Was it the money? Was it the communication? Was it lack of role clarity? Was it leadership? Et cetera. I, I could just keep going by listing things, but I won't. The loudest failure, however, in the, the breakage of something isn't usually the whole diagnosis of what happened. Whenever we scale, we're adding volume more handoffs typically, like more exchanging of hands, exchanging of information between people, and we're also adding more interdependence. As much as I like to keep people and roles and the system really clean, there's a zero percent chance that that cleanliness will keep things siloed or existing in vacuums without connections with others. So scaling then, of course, starts loading connections that, you know, were previously held together through any number of things. It could've been owner proximity, it could have been that one person was mentally carrying things that w- weren't documented or weren't clearly getting done. It could be sheer fucking dumb luck, you know? Like, there could be a variety of things that kept the connections in place that will not keep the connections in place when you start to scale And of course, we'll get into this, but the first thing that breaks isn't always the root problem. I would say rarely is the root problem, but that's a me thing. So it's usually just the system indicating that it can't hide anymore, like something's not working as we are, you know, attempting to scale. So we have four agenda items today. Number one, scale loads connections. We'll get into that. Number two, the first failure is a clue. Number three, domains break together. I love this one. And number four, carrying capacity is designed. So I'm not gonna waste any time. We're gonna get straight into it. Number one, scale loads connections. I feel like this is just real obvious based on the agenda item itself, but we'll talk about this. Whenever we're adding volume, we are straining the system. So if you're thinking about your business as a living, breathing entity that which is the en- whole, you know, integrity at scale model is that this thing is alive. It's this malleable, rich, living thing that we're creating and designing and, you know, building out. Anyway, I'm, I'm digressing. So whenever we're adding volume into a system, we are starting to strain that system. We are going to strain the handoffs between people we are going to strain decision ownership or decision rights. You know, who has the authority or ownership or right, so to speak, to make a decision? We are going to strain resources, which is kind of a given, and we also are gonna start straining information. So I always think about information as needing to be as simply and clearly communicated as possible And I don't know about you, but I know for myself that I reach a point where I just don't want to try to condense it down, try to make it simple, try to make sure everybody knows who knows what at what point. It makes me tired to think through all that stuff I mean, it's obviously super freaking important, but still, like, it's, it's just, it's kinda draining to have to do that consistently. So that's in, what I mean about information, just as an example. So think about, um, I mean, as an analogy, and I hate this 'cause I'm not trying to body shame and I- that's really not the point. But I, I was thinking about, um, adding weight to your body, how it strains your joints, and it's not a pound for pound exchange. It's like an increased ratio. The more weight that gets added, the higher the pounds of pressure. My point is just that as we're building, as we're gaining volume, as we're scaling, as we're growing, we absolutely are going to see the pressure increase in those connection points, in those joints within the system. So I think about, you know, for example, if we have more people coming in, at some point we are gonna have a number of inquiries that exceeds client care capacity to convert at a healthy rate because she's not going to have the ability to get back with everybody or warmly attune to the people coming in the door with the same attention to detail that she has now and attention to care that she has now because she won't have the time to do it based on the number of inquiries coming in the door. That's what I mean by something like volume straining the system. Of course, there's other things like more people in the door, the strain could be on your providers, for example. Do they have the capacity to take them on? I mean, there's any number of things, but if we're just thinking people coming in the door, an increase in the number of inquiries or people reaching out to you beyond what has been normal, like you're trying to get more people in the door A natural strain, so to speak, is going to be, like I said, something like client care or your intake coordinator being able to keep up. Which for the record, our client care coordinator is incredible. Like there is no... I'm not bashing her by any means. I'm just thinking logistically there will reach a point where the ratio tips, you know, the scales tip. So that's agenda item number one. Agenda item number two is that the first failure is a clue. I, you know, I said that I love domains break together, but I really love this one. I don't know what it is. Like, I think it's just anytime I create something, I'm, like, anticipating where it's gonna break. I'm sort of excited about, like, what's gonna break first, 'cause then I get to figure out what went wrong and how do we fix it and what about this, and it's... I don't know, it becomes... I guess when I have time and space to really, like, dig in, it becomes fun to figure out, like, okay, well, what happened? You know, what can we do differently? So if you were thinking about this from, again, like, a business scaling perspective, obviously What we can easily consider is that whenever we have loud symptoms, that does not e- explain automatically anyway, it doesn't automatically explain the pattern. It doesn't explain what's actually breaking. Like, what really is going wrong to create this, you know, issue that we're seeing? And let's stick with the client care example. So let's say the number that I start to see if I'm looking, you know, we're doing our L10 meetings on a weekly basis, and on the scorecard I'm seeing conversion rate decrease, and maybe I'm seeing inquiries increase, but I'm not really considering capacity for client care. I'm, I'm just sort of paying attention to the numbers, but I haven't really thought beyond what they are. And so I see our inquiries increasing, which is the goal, and I see our conversion rate decreasing. That could mean any number of things, of course. My first move could be something like going straight to my client care and saying, "You're losing inquiries. Uh, you need to do better. I want you to take this training. You know, get on it." Like, this number needs to be, uh, this percentage instead of what it has been for the past two or three weeks or something That is not solving the problem because if her conversion rate has been steady for, let's say, the past six months, you know, something like that, or even longer, then it doesn't make any sense why all of a sudden she would start losing clients. She would start losing the conversions, you know? Like, why is this dropping out of nowhere? That's the loudest symptom that we have. Conversion rate is one of the loudest symptoms, but it doesn't really explain or, um, tell us where the actual overload to the system is. And so of course then if we get into more details with her, we start to figure out like, oh fuck, like she literally doesn't have the capacity to respond to this many people or do the warm handoff to providers after she confirms them or hand them off to billing or, you know, like something is starting to fall through the cracks and it just so happens to be conversion rate. That alone doesn't explain the pattern. It is the symptom. We dive in a little bit more to figure out what the actual pattern is, and then we see it's a capacity thing. Okay, I'm gonna keep going then. Agenda item number three, domains break together. I really also like this one. I think it speaks to the interdependence of business. Like, there's not any one piece to business that it really exists in isolation, at least in my mind. I can't think of one that just exists by itself without being impacted, touched, influenced by other domains of the business. Even, you know, the structure of the business itself is influenced by the people who make it up. It's influenced by the culture of the group. It's influenced by how leadership holds it together. All of these things, it's, it's all just interwoven and interdependent. So of course, whenever we get to this agenda item and we're thinking about a business being interdependent, I mean, it would stand to reason that whenever we're scaling and we're noticing something is off, there's gonna be multiple domains that are breaking. That doesn't mean the whole thing is going to shit, for the record. What it means is that domains have been influencing each other before you have become tuned into or aware of the problem. And so even thinking about the first failure as a clue, it might be that the system has been strained, and these domains are strained together. So let's say the domains being, um, employees, structure, feedback. Let's just do that, you know, employee, structure, feedback. These domains are already strained, and then one of them finally breaks. Something finally breaks. That's that first failure piece. We need to look at all of these domains and figure out what's influencing this, what's being influenced by it, wh- where is this now, like, going next? How does this little, little, um, subsection of domains being connected lead to something like the, the breakage that we're experiencing. I always think about like with couples, like in couples therapy, you know, there's this idea that. We're trying to get people to stop fighting. Like, that's, you know, couples therapy is like, "Well, we want people to stop fighting." No, I don't. I want to see them at their worst because then I can actually figure out what's going on, and we can fix what's actually broken. And so any topic that we talk about is gonna be connected to some of the core components of why this fight is going poorly. Like, anything you pick to talk about, you could end up fucking fighting about. You know? It's sort of like the topic doesn't matter. The system for how they engage in conflict and the breakage, it- that shit's gonna show up no matter what. It's the same for a business. The systems are connected to each other. Wherever the breakage, wherever you finally see it, that's not standalone. It's happening already very, very quietly. And so that's where we have to get into, okay, how do we dig into this and figure it out? And not all domains are created equal for every problem. So if you're hearing what I'm saying and you're thinking, "Well, that means you could fix any domain and the rest would be fixed," uh, yeah, sure. Like, yes, you could do something like that. What I would actually recommend is that you find the one domain that is the most problematic in terms of the weakest structure or it happens first before the other domains start to, like, be negatively affected, and then everything is, like, you know, feeding off each other Or the domain that if you adjusted something real small, it would have a pretty big impact on not only that domain, but, like, the connected ones. So there's, like, a number of ways you could get into figuring out which one to go after first, but I just wanna clarify, like, not every domain is created equal. And just to be really clear, when I'm talking about domains, I don't think I've said this, so sorry since I haven't, I'm talking about the integrity at scale model. I'm talking about structure/EOS, 'cause we use EOS, but you might not, culture, um, leadership, feedback, financial health, employees. Like, that's what I'm talking about Each of those represents domains in a living system, and they all look a little bit different, like the way they interact, you know? But that's a, that's a side conversation, not a right now conversation. So that's just me trying to clarify what I mean by domains. One more thing that I will say is that I typically prefer trying to find the lever to pull that has the biggest impact on the rest of the system that's being strained So I'm not looking for like, well, how do I make this giant change? I'm looking for how do I make the smallest change possible, embed it into a system or a, a workflow or a process that already exists, and then see how down the line of the interconnections and the handoffs between these domains it sort of rectifies the rest of the issues, that's almost always the one that I'm trying to go for. The, the smallest tweak that I can to positively influence whatever the problem is. That wraps up agenda item number three, domains break together. So number four, carrying capacity is designed. Here's what I mean by this. If you're going to design something, Let's say you're designing a new role, for example, or you're just clarifying something on your accountability chart What I would encourage you to think about is designing for not just the ownership, the, uh, decision thresholds, the feedback style or cadence or rhythm or the responsibilities for right now. Think about if you had double the amount of people that you have at this current point, or double the amount of inquiries that are coming in, or double the amount of patients for your practice, or what the fuck ever, just double it. Or times it by five or 10. I don't, I, whatever number you want. I just think double is a good place to start So then take that and just ask yourself, what's gonna slow down this person being able to do this seat to the extent that I want them to do it? What decision points, what workflows or processes, what sort of expectations or responsibilities are, like, important now, but if we doubled in size would be less important and more of a hindrance to them getting other shit done that we actually need And then try to design it in such a way that you are proactively tending to the future problems that you know are gonna happen. This is not doable every time, so I'm just gonna say that very clearly. You cannot always design something for what you want to see happen or what the Is going to be, you know, expected when you scale, even if you're growing by 30% or something. I mean, you're not always gonna be able to do this. But the thought experiment alone is wildly beneficial, to be able to think through what's gonna break, what's this person not gonna be able to do, what am I not going to want them to do at some point in the future? That can be really freaking helpful to just consider and, like, think through, okay, what will this look like at that point in time. I think ultimately you just wanna proactively tune in to the domains and the systems and try to figure out where do these things need to live, you know, including metrics. I mean, God, I have a good/bad example. I just think about inquiries and, like, marketing related metrics. Like the inquiry count, for example, was something that kinda lived with the visionary, kinda lived with client care. It was like didn't really have a clear home And you know what happens if something doesn't have a clear home or, like, a clear owner, then there's nobody who has the authority to make decisions and fix it. And so inquiries are declining, and there's nobody that we point to to say, "Hey, we need you to fix this thing," or like, "What's up with this?" Or, "Hey, why haven't you dot, dot, dot?" Or, you know, "What's the plan?" Like, "What are, what are we gonna do about this?" Instead what happened is we're just noticing these declining inquiries and then not making any moves. Like as a visionary, I'm sort of like, "Well, I guess we need to maybe do this." And I might try one thing and then not track them consistently because they were sort of like hanging out, like just these untethered metrics on our scorecard. God, that's so... I'm so, I'm still annoyed with myself about that. I'm just like, what a fucking waste If we were proactively tuning into our systems, you know, the year prior or six months prior or however long ago, I would've said nobody owns this. Like, nobody actually owns this number. Who pulls the lever on it? Who makes moves? Who makes decisions? Who does things? Because that specific metric impacts every other aspect of the domain It impacts our people, it impacts our finances, it impacts our marketing, it impacts our leadership. I mean, it's, it touches everything else. And so that was a really bad move on my part not getting somebody to own that sooner, not getting the right person to own that sooner, I should say And also in terms of like carrying capacity, like that being designed, whenever we clarified like, holy shit, inquiries need to be owned by the marketing person, like they're responsible for the inquiry acquisition, that pipeline, that, that seat being clear finally on a marketing strategist seat helped to further clarify all of these other hanging threads that needed to be organized and contained and kept by the marketing strategist. So we had been kind of operating with all of these little pieces hanging out Trying to kind of like absorb complexity in the system, but it, it wasn't working. It was like, oh, actually no, we just, you know, need the seat. The seat then takes over the metric and all these other pieces, all these other moving pieces. So anywho I'm gonna wrap this up. So why this topic? Let's talk. Why this topic? Scaling problems are easier to diagnose when the first visible failure is not treated as isolated. That's why this topic. It feels really important to me that we all recognize the interconnection between domains. And then also again, that when we add scaling or volume to the system, whatever breaks was probably not the first thing that was strained. If I tie this in with the Integrity at Scale model, the idea of things breaking and figuring out where things break, I mean, it's, it's really connected to every domain within the Integrity at Scale model. So leadership, you know, structure/EOS, employees/people, financial health, feedback systems, culture, marketing, et cetera. All of it is connected. In everything as you scale, there's going to be strains on every single system, period, and then of course the interconnections between them. So here's one key takeaway or a task if you choose to accept. I just want you to think about one problem that you're currently having, especially if you're scaling or, you know, trying to scale and then I want you to take that problem and try to trace it through three of the domains from the Integrity at Scale model. Figure out like, okay, where is this loudest? Like in which three domains is this the loudest? Again, because like domains break together, but not all domains are equal with every single problem that we have. So after you do that, then I want you to isolate or start to think through where's the weakest connection between these domains, between the workflows that happen within these domains and then seek to fix that connection. So don't just go after the symptom, go after the Connections between the domains after you've done your due diligence in figuring out, okay, what are the connection points between this, and what are all of the relevant and related domains? So good luck in doing that. And we are at time. So if you haven't already, subscribe to the podcast and slash or send this to a friend who you know needs to hear it. You can find related episodes in the description below and Otherwise, I wish you well. Have a great day. I'll see you next time. Thanks. Bye