The Problem
The founding team achieves the incredible in bringing an idea to commercial viability.
The start-up period of an organisation’s lifecycle is exciting, hectic and fulfilling. However, there comes a point (hopefully sooner rather than later) where commercial viability has been established, a viable product has been built and the company needs to capitalise on the founders’ hard work. It is time to scale; to realise the commercial potential of the venture.
Sometimes this point is imposed arbitrarily by the need or desire for funding. Investors need to see the founding team is credible, that they have proven the commercial viability their venture and, importantly, that they are capable of scaling the company sustainably to achieve revenues which make investors’ returns attractive. It is often the final point which is overlooked and weakens pitches – the tendency being to focus on the potential for scale and neglect the practicalities thereof.
As the company seeks to leap from laissez faire, founder-driven start-up to established, rapidly growing business, new practices are vital to bridge the gap.
Organisational design, facilitating technologies, commercial operations, and business processes, polices & governance need to be optimised so they are able to generate and manage a rapid increase in activity across the organisation. If such preparations are not made, investment in the company’s growth is at risk of generating only short-term results as the business fails to keep pace, or simply poor ROI as the business’s commercial inefficiencies squander growth opportunities. The company must be optimised to generate and manage rapid growth sustainably.
The need to optimise for a period of rapid growth is not always foisted upon a business by investor, of course. Quite often, the founding team themselves will recognise a need for change, if not quite how so. As the business grows, its requirements necessarily become more numerous and complex. The founding team become unable to cope with the increasing number and variety of demands the business requires of them. This leads to gaps where opportunities are missed, service lapses or development slows (not to mention a deterioration in quality of life for the team, as they struggle to keep-up).
Most founding teams recognise at this point they are unable to dedicate sufficient time to all aspects of the business and, also, many of the new requirements of the business are simply beyond their sphere of expertise.
The greatest mistake founding teams make at this point is to presume the answer resides purely in headcount to remove the bottleneck. Although part of the solution, alone this tactic erects as many barriers to growth as it removes bottlenecks. The business infrastructure and management practices are either not optimised for such growth or, they quite simply do not yet exist. What results over time is either a lack of oversight and control of business activities, or the same bottlenecks persist as founders insert themselves into business activities in an attempt to keep things on-track. Ultimately, such a situation leaves the venture hamstrung, unable to grow and, sadly, often to fold. If the business is to punch-through to its next phase of maturity and commercial success, organisation-wide changes must be implemented.
Overcoming critical barriers to growth, at critical times in growth.
Solution
COL have worked with numerous start-ups in a variety of sectors and geographical territories.
We understand how to work with founding teams and how important the relationship between these teams and their products are. Accordingly, our consultants approach Scale-up engagements with the passion, flexibility, adaptability and determination that we have observed in our clients over the past decade.
Our goal is to make you an attractive, viable concern. As we develop your venture, it may become clear that it will require significant funding to achieve its full potential. In these cases, we will put you on the right track to move into the next phase of your development by arranging appropriate engagement with a variety of early-stage investors and commercial partners.
Key to Scale-up engagements is blending best-practice with real-world ‘hustle’. Our consultants spend time with the founding team and their product(s). They will analyse all pertinent aspects of the venture including team members, organisational design and commercial practices. This is be undertaken at speed, quickly discarding information that does not add value and concentrating only on aspects where significant gains can be achieved.
After this immersion period, our consultant work in partnership with the founders to help them recognise current gaps in their organisation and improvements which must be addressed if it is to credibly scale. A plan is developed in partnership with the founding team and our consultants then usually work hands-on alongside the team to deliver the agreed initiatives.
Exact specifications of Scale-up engagements differ significantly, depending on the client in question. However, for illustrative purposes, such engagements often involve, amongst other initiatives;
- Creation of appropriate and robust management structures
- Role and profile definitions
- Future-proofed operational processes and business policies
- Tightly defined commercial functions with appropriately aligned objectives and performance measures
- Implementation of appropriate facilitating technologies to aid efficiency & oversight
- Planning and management procedures for all commercial functions
Scale-it clients usually choose one of three different ways to engage us;
- COL undertake full assessment and draft a plan for scaling (in partnership with the founding team) which our clients then use as part of their investment plan.
- COL take this a step further by then working hands-on within the business alongside the founding team to implement the initiatives.
- COL undertake a prioritisation session with the founding team and then work alongside to implement the key priorities. The remaining initiatives form part of the investment plan to be undertaken, either internally or in partnership with COL, at a later date.
Overcoming critical barriers to growth, at critical times in growth.
Benefit
The specific diagnosis and pursuant programme of action will differ for every company, depending on its unique circumstances. However, for illustrative purposes, we commonly observe a number of benefits as a result of such engagements – benefits which ultimately provide the necessary drivers to rapidly increase revenue and/or secure funding:
- A robust organisational design, with well-defined specialist roles and aligned performance-measures allows founders to confidently step-back from planning and tactical activities they do not contribute value to or do not have sufficient time to properly oversee.
- Performance bottlenecks are removed which increases the organisation’s capacity to undertake revenue generation and/or fundraising activities.
- Greater long-term perspective is achieved through improved planning, processes, policies, governance procedures and technology tools.
- Team members no long fire-fight urgent issues and instead are able to concentrate on important issues which contribute to company growth objectives.
- The business proceeds as a whole with better defined purpose and team members are more focused on tasks which contribute to the objective of scaling.
- Future-proofed organisational design flexes with rapid increases in activity, supporting rapid growth, rather than inhibiting it.
- Better defined and aligned commercial functions, with robust strategy and planning, are able to operate at the required levels of effectiveness and efficiency necessary to hit growth targets.
Overcoming critical barriers to growth, at critical times in growth.
How
We undertake the following process in a typical Scale-up engagement. Please note this process is especially subject to flex and adaptation, given the nature of many Scale-up businesses we engage with;
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