A business is a complex system with many moving parts so it’s not always easy to know where to put the most effort and when. I help my clients to grow their businesses by identifying areas in the business that need attention and prioritizing the order in-which the various issues get resolved.
Many times, the owners of a business know that their company has the potential to scale but their efforts fail to pick up sufficient momentum to really take off. I also come across companies who are already experiencing growth, sometimes at a faster rate than they can keep up with. I use the nine building blocks of scaling to create a solid foundation for scaling revenues and growth.
The Nine Building Blocks of Scaling comprise:
- Cash Flow and Profitability Management
- People, Roles and Responsibilities
- Departmental Structure
- Communication Model and Structure
- Execution, Project Management, Internal Team Execution and Structure
- Technology Systems
- Documentations, Policies, Procedures and Processes
- Growth Methodology
- Metrics and Reporting
Once a company has established at least one good sales and marketing channel, then all the other building blocks become essential to supporting the growth of the organization.
Overlap Between the Building Blocks
The building blocks allow a more compartmentalized view of each of these different components which, when put together, create the different systems inside of a business. Seeing how these different building blocks relate to one another and how they combine to make up various business systems allows you to have greater insight to building your business. When a given system isn’t working as expected the model helps you to identify and address the root cause.
For example, one of the building blocks is departments. How departments are structured and relate to each other is important but departments are also made up of people who have certain roles and responsibilities. People use different technology systems to perform their functions and the various functions have different metrics and KPI’s that they’re responsible for, which in turn impacts revenue and profitability and how cash flow is managed. If there is a breakdown in one area, it will affect the performance of all other systems.
Developing a Scaling Blueprint
Scaling a business like is building a house and we see ourselves as an architect and general contractor. I help my clients develop the plans for how to grow their business to what they envision through creating a scaling blueprint.
Then I oversee the execution of that blueprint by looking at things like which buildings blocks they need; which ones are already in place and which ones need to be arranged. We then prioritize the order in which those building blocks are put in place.
Typically, most scaling blueprints have at least four if not five different phases. In the first phase we’re typically putting out fires. The second phase is about really putting in a solid infrastructure or a foundation. The third phase is ramping up by solidifying and building upon that foundation. By the fourth phase the business can scale massively.
Now that we have a general feel for the scaling process and the importance of the nine building blocks which receive attention during the scaling process let’s take a look at the various building blocks in detail. In this, the first of a series of articles on the nine building blocks of scaling we’re going to look at people, roles and responsibilities.
People, Roles and Responsibilities
As we know people are the core of an organization and having the right people is critical to a company’s success.
Getting the right people on the bus
The first concept under people is getting the right people on the bus. This idea is from the book Good to Great by Jim Collins and it is essential because so many organizations don’t have the right people in the right seats, or they have the right seats but the wrong people in those seats.
There are two parts to this. First there is the employee and their skills, qualifications, experience and personality. Then there is the actual position they’re in as well as the roles, responsibilities and accountabilities attached to that role. These two things need to be aligned and there is a lot that goes into making that happen. The hiring process, the experience of the person doing the hiring and their ability to document the job description are a few factors in getting the right match between the resource and role.
When I worked with Kindness Yoga, an up-and-coming Yoga franchise the owner was in the role of CEO but that role was not really the best fit for him. I recognized that there was somebody inside of the organization that was actually a better fit for the CEO role. She was the general manager at the time. By moving her into the CEO role, the CEO got moved to a Visionary Officer role, and that created the greatest opening and transformation for the business. The organization began creating more revenue more consistently; the company was more productive and the culture within the organization changed. People felt more safe and secure under the new leadership. That was a great example of having the right people in the right place.
Having clearly defined roles and responsibilities
We sometimes find that people aren’t really clear on what their roles and responsibilities are. There could also be misunderstandings or overlaps in this regard which leads certain roles being either neglected or deprioritized. It helps to clarify roles and responsibilities and how they tie in to the overall goals of the company.
Just about every successful company has two key roles filled by two different people, a visionary and an operator AKA integrator. You have somebody who creates the vision and you have somebody who executes the vision. In another company I am working with the visionary has been trying to do both roles or has been all visionary but half operator. There is another person who has been performing the operator role. We’re empowering her to be full operator and getting the CEO to extricate himself from management activities which is going to free him up to do what he is best at. This will also empower the operator to oversee operations and how things get executed inside the organization which will make the company as a whole much more effective.
Once you have the right people in the right roles, it is important to define what those people are accountable for and to identify the relevant metrics for those accountabilities. Too many companies are missing that accountability factor which can make the biggest difference in how the company performs.
The importance an organizational chart
There are three parts to an organizational chart. The first part of an organization chart is titles, the second is job scope, and the third is reporting lines. I had a client who was resistant to the use of titles and this created a lot on confusion around roles and responsibilities and also who reported to whom. Having titles can bring clarity to roles, responsibilities and reporting lines. An organizational chart is important because it shows the relationship between the various departments and who reports to whom. It is a visual representation of the various responsibilities, reporting lines and relationships.
What is a roles and responsibilities map?
A roles and responsibilities map differs from a job description which tends to be long and highly detailed. It shows who the key role players in the company are and gives a short description of each person’s portfolio.
Think about the “Our People” page seen on many company websites. By looking at the roles and responsibilities map somebody could come in and get a quick high-level viewpoint of what everybody is responsible for inside of the business.
Is there grabbing or avoidance of responsibility?
When there aren’t clearly defined roles and responsibilities there may be grabbing or avoidance of responsibility. There could be somebody that’s avoiding what they have been assigned to do and then there could be somebody who is trying to do more than they have been assigned to do.
While it may be a great opportunity for an individual who has mastered their existing role and is looking for a challenge to grab responsibility, this person may take on responsibilities they are not qualified to handle or more responsibility than they can manage thus creating a deficiency elsewhere. This is not a situation to get comfortable with. That said, people should not be discouraged from taking initiative.
The avoidance of responsibility is typically always ineffective but sometimes responsibility grabbing could actually be inspired from a healthy place of somebody who is ambitious and wants to win or wants to see the company win, however it needs to be guided by a senior and experienced individual such as the Director of Operations, who oversees the assignation of roles and responsibilities. If these behaviors are hidden and management does not see it, then that could become problematic.
One of the things that holds CEO’s or leaders back is trying to do too much because of the tendency to want things to be perfect or feeling that their way is the only right way to do something. Delegation is all about trust. The higher a leader’s LQ is the more his tendency to trust will be, thus the easier it will be for him to delegate. To learn more about the relationship between LQ and trust read my blog post on that topic here.
All the practical steps we’ve mentioned above in terms of defining roles and responsibilities, creating organizational charts, holding people accountable and establishing metrics contribute to creating a strong foundation for the company so it can grow and scale effectively. However, people, roles and responsibilities is only one of the nine building blocks of scaling. There is much more to come. In the next article we will discuss departments and how they can best be structured to support the growth of the company.
If you are interested in scaling your company and would like to learn more about me, my process and the various client’s I have assisted I encourage you to schedule a 15 minute discovery call with me. I would be happy to discuss the many possibilities which exist for taking your business to the next level.