Why companies get stuck
The thing that keeps many companies from scaling is that they try to keep doing everything that they started.
This is common occurrence because early in the life of the company, you kind of have to do everything. You have to get the deals that you can get. You have to do things to support those deals that may not be part of a single coherent strategy. But you do them to get revenue and build momentum and confidence.
The problem happens when you reach a certain size where everyone in the company is working more than full time to simply hang on.
You are accustomed to working really hard, and everything people are doing is focused on revenue, so it seems like you are doing the right thing.
But you are stuck — because it’s simply not possible to scale too many things.
It’s a little counter intuitive, but the companies who scale successfully are the ones who choose to do fewer things, not more things.
You get stuck because you are so busy barely managing the activity level at the size you are at currently, that there is not a moment left to do the things that will be required to scale.
So you keep doing what you are doing — which is not scaling.
Choose fewer things
Let me share a story about how I first learning this lesson.
Early in my career, I was a product marketing manger at a small company. My phone was ringing off the hook from sales people, sales managers, partners and customers about several products that did not actually exist.
I thought, If the sales people would stop trying to sell these things, all these problems would go away.
Unknowingly, I set this company on a course to scaling by simply deleting the products that didn’t exist from the price list.
Was the sales team upset? You bet!
They assured me that I was killing the business because they could not have the right conversations with customers without being able to talk about these products…
Me: But these products never existed
Sales: But we need to be able to sell them. Customers want them.
Me: But they don’t exist
By stopping the chaos you can succeed on what you choose to do
Sorry. No deal. Here’s what I offered:
Instead of us all running around trying to deal with customer situations which are created by selling non existent products on the price list, I’m going to give you more help, more support, more leads, more quality, more references, and more enhancements, on the TWO products that we DO have.
By doing this we had some short term pain from customers who felt mislead, but we had a whole company focused on a strategy that we could not only execute without killing everybody — but also scale.
Once we started scaling, then we were able to add new products in a purposeful way.
Doing too much is too painful
Companies struggle and sometimes even fail when they are trying to be bigger than they deserve to be.
If you’ve got enough resources to develop and deliver 5 products, don’t try to deliver 10 products.
If you want to enter a new market space, make sure you can resource the effort. If you do not have enough cash flow to make a new investment, you need to stop something.
When you start doing too many things without enough resources, money and energy get spread so thin that everyone comes to work every day feeling like they are failing.
When everything is under-resourced, everyone suffers every day.
Every time in my experience that we made a decision to focus on fewer products, and even give up some revenue streams that were not worth the effort, we were able to grow the business and add new initiatives back later in a successful way.
When to make the shift?
Every company who has started out by selling anything to anybody to get traction, experience and revenue, will face a moment when that strategy will start crippling them. It’s important to recognize that you can’t bring everything you are doing forward.
Chaos doesn’t scale. You need to choose.
And you need to choose before you can scale.
Contact me, if you’d like to talk about this. It’s what I do.
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Patty Azzarello is an executive, best-selling author, speaker and CEO/Business Advisor. She became the youngest general manager at HP at the age of 33, ran a billion dollar software business at 35 and became a CEO for the first time at 38 (all without turning into a self-centered, miserable jerk)