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Scalability

How Entrepreneurs Can Effectively Optimize Workforce And Management While Scaling Up

How Entrepreneurs Can Effectively Optimize Workforce And Management While Scaling Up
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Entrepreneurship is a journey, and it seems like everyone goes through it a little differently. As a founder of 3 successful startups and having scaled these startups from 0-200 employees, Krishna RK shares his thoughts on what it takes for a startup to work at each stage.

“Each phase has its own distinct challenges and way of finding success. It is critical for every entrepreneur to know which stage they are in, and what they need to do at each stage to become successful.”

Common classification methods—such as classifying startups by the domain in which they operate (healthcare, manufacturing etc.), its target customers (B2C or B2B) or its technical domain (hardware or software)—are quite informative. Unfortunately, they provide little guidance about how to assess a startup. In doing so, consider the following instead. 

“I have an Idea!” – The Ideation Stage

The first stage is also called the Ideation stage. At this stage of the startup, it is all about “the idea”. It is about breathing life into your idea and finding innovative ways to making that idea work.

As an entrepreneur, you might have multiple ideas, but the biggest challenge at this stage is, to get glued to that one idea and grow it. Ideation phase basically operates without any structure or process; they operate on intuition, gut, and spin. There are no real budgets or org charts or process. You just firm up on the idea and get the idea moving. Ideation stage can be incredibly fun and stressful at the same time.

There are lots of ideas that work, but there are ideas that don’t work as well. In order to scale up from this stage, to get the product out into the market and get the idea clicking, the entrepreneur should be quick in identifying the hitch, find a small deviation to make the idea work  and keep moving. If you fail to do it, so will your idea. 

“Welcome to the Startup Land” – The early Startup Stage

Once you get the idea clicking, then comes the phase where you actually start building a company.  For early-stage entrepreneurs and startups, getting the product right is critical. If you fumble on this, the company does not even make it out of the blocks. But what do founders need to do when the company gets beyond the stage of proof of concept into the second stage, when scaling up is the goal?

The product remains important, and that should be your focus point, but what ends up driving the ability to scale is not the product, but the team of people that are put in place to serve the clients and build the product coupled with process improvement initiatives to guide the team.

At this stage, you have given your team the chance to evolve, but now, you need to implement certain processes and get those processes solidified and start getting your company together because it’s time to grow up!

“How will I get there?”  -- Growth Stage

As a growth-stage company, your success is going to be measured on things like revenue growth, operating margin expansion, market share gains and the size of your total available market opportunity.

By now, you have an established product and found the market fit, and you have begun to scale customers and revenues. You have also assembled a talented and passionate team who is bought into your culture. But, If you want to build a big company, you’ve got much more work ahead.

If you fail to introduce processes to measure and control the company growth, you might as well fail in spite of having a brilliant product and a loyal team. Growth stage is the right time to invest in professionalizing the processes. You need to develop of set of metrics that will help you measure each and every aspect of the business. The key here is to back the process with technology to form an environment where you give people enough space to innovate, but back it with processes so that there is no leakage of effort, and use technology to track this.

Implementing the right process backed by right technology teaches you how to drive a startup–how to steer, when to turn, and when to persevere–and grow a business with maximum acceleration. It is a principled approach to new product development.

“How to reach the final destination?” –- The Final Stage

In the expansion stage, you have a large team, and you need full-time managers and a senior leadership team that can filter communication up and down. Optimization is the key to sail through this stage. You create a good amount of process to streamline work between teams, to optimize budgets and define elaborate org charts. This is the stage where you start investing in analytics, automation engines, and procedures that are going to be in place for the long haul.

This stage is not only about consolidating and automating processes, but you also start consolidating people in proper packets and establish “Centre of Excellences”, and consolidate technology to effectively manage the expanding organization. Basically, you think of scale in all aspects of the business.

The Common Mistakes: Not Scaling and Scaling Too Early

Scaling a business is an important part of growth, but it’s easy to make mistakes. The biggest mistake I see startups make is staying in the early stages longer than they should or adopting the policies of the later stage too early. Both can burn the company.

Successful entrepreneurs are those people who can find the right balance between freedom, chasing their dreams and to scale their venture upward with a solid foundation and plan for growth. 

“The biggest challenge for an entrepreneur is to become a successful leader and to lead the company through all stages of the startup’s growth” concludes Krishna. 

“An entrepreneur loves freedom and gives people working with him a lot of freedom and space to innovate and to do something new every day. But, if he fails to get to the right people who don’t understand the responsibility behind the freedom, the company fails. If he has the right people but fails to define proper processes, backed by proper technology, at the right time, even then the company fails.

The key to success is to find the right mix of people, introduce the right amount of process and technology at the right time and there can be nothing to stop a company from scaling the heights.”

(With Inputs from Krishna RK, Founder & CEO, BlueTree Consultancy Pvt Ltd)

 

Edition: December 2016

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