Latest / Daily Influence / 718. Growth vs. Scaling: The Hidden Risks of Growing Too Fast (rerun)

Transcript

718. Growth vs. Scaling: The Hidden Risks of Growing Too Fast (rerun) · Daily Influence

• 0:10
  [SPEAKER_01]: Welcome to Daily Influence, your daily dose of positive influence.
• 0:14
  [SPEAKER_01]: I'm Brian Smith founder of IA Business Advisors and co-author of the Iain team series.
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  [SPEAKER_01]: Each day we share stories and insights to help you find be and build your influence in a positive and responsible way.
• 0:27
  [SPEAKER_00]: And I'm Greg Lino, partner at IA Business Advisors, and co-host of Daily Influence.
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• 0:48
  [SPEAKER_01]: Hey everybody, Brian Smith here with the IAM team series and your Daily Influence.
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  [SPEAKER_01]: And today we are going to be talking about
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  [SPEAKER_01]: Gross, and we're going to talk about gross in.
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  [SPEAKER_01]: two different ways.
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  [SPEAKER_01]: There is the traditional, you know, I'm going to grow my country and then there's this word that's being thrown around and used.
• 1:10
  [SPEAKER_01]: I think personally overused called scaling and I think a lot of people are using that term out of context or with a really strong lack of understanding ignorance, if you will, of really what it means and
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  [SPEAKER_01]: what can happen to your organization if you're not ready for such a move?
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  [SPEAKER_01]: So first, being smart, like we are here at the I&Team Series and I&A, let me first define the difference between growth and scale and and give you the key differences because the fairly dramatic one is growth is increasing revenue.
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  [SPEAKER_01]: with the associated cost.
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  [SPEAKER_01]: It means, you know, if I want to grow IA by X number of dollars, then I can add a consultant and that consultant is going to add cost and as I bring in more people, that consultant will take on those more clients for us.
• 2:12
  [SPEAKER_01]: And then on the other side of the scale, there's scaling, which is revenue increases without proportional costs.
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  [SPEAKER_01]: It's saying that look,
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  [SPEAKER_01]: We have 10 consultants here and we're going to add 25 new clients without giving them any support.
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  [SPEAKER_01]: Any added human support.
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  [SPEAKER_01]: We might find a way to do it by policy procedure, but we're not going to have any cost increases.
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  [SPEAKER_01]: And there's danger in that.
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  [SPEAKER_01]: And a lot of people that's the key misunderstanding is scaling isn't about rapid growth.
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  [SPEAKER_01]: You have people like Grant Cardone out there talking about 10X and you can be 10 times your size.
• 2:55
  [SPEAKER_01]: And I can tell you from personal experience, people that have tried to follow that advice, have gone bankrupt.
• 3:03
  [SPEAKER_01]: They've grown themselves into bankruptcy.
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  [SPEAKER_01]: They've put themselves in a position where they can't afford to actually do business.
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  [SPEAKER_01]: they have too much business.
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  [SPEAKER_01]: Their quality of work goes down.
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  [SPEAKER_01]: Their ability to communicate is fractured.
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  [SPEAKER_01]: They try to multitask through all of the added tactics and strategies that need to be developed to keep pace with that fast quote unquote scaled growth.
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  [SPEAKER_01]: and it's dangerous that the thing is is that growth is about is more linear, it's more inputs and more outputs.
• 3:37
  [SPEAKER_01]: There's more transactions, but we're adding more people to do those transactions and exponential growth is way more outputs, way more people with a lot less support.
• 3:50
  [SPEAKER_01]: So the dangers of this are, I think, pretty apparent, but I think if we,
• 3:56
  [SPEAKER_01]: talk about it a little more and put it in context or ask you to put that in context.
• 4:01
  [SPEAKER_01]: It's really important that you understand what that means in your area of influence.
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  [SPEAKER_01]: If you're in a medical, if you're in construction, if you're in home services, I don't care if you're a plumber or construction company, you need to understand the difference between growth and scaling.
• 4:19
  [SPEAKER_01]: do I need more trucks if I'm a plumbing company?
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  [SPEAKER_01]: Can my people, if I add a simple piece of software, can I actually add more work for each person with route optimization?
• 4:33
  [SPEAKER_01]: So there's different ways to think about understanding that difference and how it contextually affects you and your area of
• 4:48
  [SPEAKER_01]: if you might be launching yourself into a disaster into a place where you can be overwhelmed where your four values could begin to be difficult to maintain your level of customer service, your ability to perform whatever task you have is stressed.
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  [SPEAKER_01]: So we don't want to see you grow
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  [SPEAKER_01]: high turnover with customers and high turnover with your team.
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  [SPEAKER_01]: If you put too much pressure on your team, your team will fragment.
• 5:26
  [SPEAKER_01]: You can break your team in your drive to grow your company if you're not taking into account the capabilities of your team and the support that you're giving them to make them and able them to be capable, then you are setting yourself up for potential failure.
• 5:44
  [SPEAKER_01]: And if not failure, you're definitely setting yourself up for potential losses.
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  [SPEAKER_01]: Financial losses, people losses, reputation losses, and sometimes they don't happen all at the same time.
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  [SPEAKER_01]: Sometimes one type of loss precedes another, and it snobles until you find yourself in a position where it's unrecoverable.
• 6:08
  [SPEAKER_01]: We've had clients come to us who have grown
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  [SPEAKER_01]: very fast and set to us, how can we fix this?
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  [SPEAKER_01]: What can we do to get us back on track?
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  [SPEAKER_01]: What can we do to stabilize this issue, get us back to our core values, get us back to the level of customer service that we want to, the ability to communicate effectively with our customers and our partners,
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  [SPEAKER_01]: begin to be specific, measurable.
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  [SPEAKER_01]: Think about attainability, relativity, and timeliness.
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  [SPEAKER_01]: And apply that to your decision-making process.
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  [SPEAKER_01]: Get to root cause of why you want to scale instead of grow.
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  [SPEAKER_01]: What is driving you to want to have that much extra growth?
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  [SPEAKER_01]: Or why do you want to put that much pressure on your team?
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  [SPEAKER_01]: Is it because they're underutilized?
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  [SPEAKER_01]: Maybe they are.
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  [SPEAKER_01]: or is there some other factor that's driving you to do this?
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  [SPEAKER_01]: And once you understand that, you can begin to build smart strategies and then smart tactics.
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  [SPEAKER_01]: And employ business decisions, creative objectives that can potentially begin to move you from the growth phase to the scale phase in a very intentional and as we say, smart way.
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  [SPEAKER_01]: smart management can guide you through any decision that you have in your organization when it comes to growth or scaling.
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  [SPEAKER_01]: It can provide that foundation.
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  [SPEAKER_01]: It leans into whatever core values you have in your organization.
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  [SPEAKER_01]: It can lean into any mission that you have in your organization.
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  [SPEAKER_01]: And it doesn't require a consultant to apply it.
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  [SPEAKER_01]: It just requires you to slow down and think,
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  [SPEAKER_01]: How can I strategize with that specificity and how can I create tactics that are more specific to what my objectives are?
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  [SPEAKER_01]: Then how can I measure them to guide me through meeting my growth and or scaling goals?
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  [SPEAKER_01]: And when I put them on paper and I talk to my team and I see where my teams capabilities are, where my financial capabilities are am I being realistic?
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  [SPEAKER_01]: Am I being relative to what I want?
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  [SPEAKER_01]: And does it do those answers make it attainable?
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  [SPEAKER_01]: And the last thing is, is this the right time?
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  [SPEAKER_01]: Are you ready for whatever this is going to bring?
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  [SPEAKER_01]: The challenges and the success?
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  [SPEAKER_01]: And when we ask ourselves these smart questions and get to the root of each of those questions,
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  [SPEAKER_01]: We set ourselves up for growth and or scaling in a way that's healthy, healthy for us as leaders, healthy for our team, healthy for our customers, healthy for the market.
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  [SPEAKER_01]: I hope this talk will help those of you listening understand.
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  [SPEAKER_01]: Maybe some of the differences you didn't know between growth and scaling and how scaling we can do it.
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  [SPEAKER_01]: But how we need to be smart, we need to understand where we're at, what our objectives are,
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  [SPEAKER_01]: and what capabilities we have to reach our new objectives and can we do it safely?
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  [SPEAKER_01]: I hope you have a great day.
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  [SPEAKER_01]: I look forward to talking to you again soon on the daily info.
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  [SPEAKER_01]: Take care.