The Scaling Myth

By: John Grinnell

The economy was cranking and the opportunity for growth had never been better. The executive team was more excited than they had been in years, and they wanted to “strike while the iron was hot.” Scaling infrastructure was the challenge before them. They had loyal technically talented employees who had lifted the company to its current size of 7M per year. The good news was that their equipment was already overbuilt due to a technical propensity of the founder, yet their administrative system needed upgrading. They moved quickly bringing in a more robust administrative software product that could help them scale as well as a couple of IT professionals to run it.

As they hired technical and administrative employees they watched their budget being blown, but they were so busy supporting their new customers they felt they had no choice and kept hiring. They were a bit mesmerized by the pace and maybe even in a bit of action-denial about the needs of the business. They hired and hired and some would say that perhaps hired too many people. Looking back they had in fact over hired because their legacy leadership system couldn’t leverage their time and continued to get more mired in the details instead of addressing People development and process issues. They told themselves “we need to make hay while the sun shines” to get to the next level, and then we will “trim the bush later.” As time went on they became over staffed throwing more people at old ineffective processes. This reduced reserves they would need in the future to maintain quality and their hard earned reputation.

Growth is a wonderful challenge, and those of us deeply immersed in the business world across industries undoubtedly notice that the scaling word is used daily. It is almost used as much as the buzz word “disruption.” Scaling is typically thought of as building the financial, administrative, technical or scientific infrastructure of the business, yet seldom thought of as building the leadership system that will do the scaling. This is the Myth of Scaling-- that above all; scaling is a financial, technical, scientific or administrative challenge.

Scaling is first and foremost a human challenge of leadership, yet this fact escapes most executive managers trained the logic of the administrative-financial and technical or scientific knowledge systems. Hired and promoted for their prowess in these areas they never learned to lead others well across broader scopes of responsibility. They didn’t master the emotionally challenging skill of developing others to handle more for them. Said in another way, they never mastered the art of controlling quality and productivity through the effort of others.

Some companies will do in-house technical training and send managers off to leadership school while scaling. Seldom is this leadership training embedded properly into the organizations in alignment with important change goals. Most think of this type of development as “training” instead of realizing that leadership and organizational development properly done is an “intervention.” Further, most leadership development programs are not based in helping managers understand their self-limiting beliefs and subsequent blindspots and behaviors that blocks their leadership potential to cause change. Without this awareness their ability to drive success throughout a larger growing system is not as effective as it can be.

In the story above due to not scaling the human and leadership system well, the company’s brand began to erode which was eating away at its sustainable future. With their bias for conventional action coupled to their limited mindset and associated blindspots; they took unnecessary risk by ignoring the proper development of their leadership system while scaling. Creeping slowly and out of sight entropy (slow death) began taking them over without much notice until the founder stepped aside and brought in a new CEO who did understand the foundational aspect of the human system and leadership. The good news is that they caught it in time by invested time focused into building the human systems and are now doing amazingly well.

The human system of all organizations operates by a simple yet profound logic that differs from the numbers logic of the administrative systems or the physics–logic of the technical systems or the research and statistical models of science. It operates by what we call “psycho-logic.” That is; “given a similar set of circumstances, without self-awareness—people tend to act the same way over and over and over again.” In simple terms we are creatures of habit. Growth through scaling changes conditions and many former effective leadership habits will no longer work—and requires a new way behaving. Without a clear model and language of leadership throughout management it is next to impossible to navigate change without unnecessary loss.

In summary, scaling effectively enquires managers to lead differently across broader scopes of responsibility. Transitions of this type require more than a superficial understanding of oneself and others. As managers shift their operating model to “building and leading leaders” instead of doing the direct work themselves the probability of success increases. This shift frees up time and energy to focus on team leadership as well as proactively identifying performance gaps within the new organizational design. This is the hidden secret of healthy and successful scaling—developing your system of leaders throughout the organization just before or while you are scaling your business.

Keep these human system points in mind when scaling:
  • Align Leadership: Build a common language of leadership throughout your senior ranks starting with the CEO. Do this by selecting a model/development approach to invest in. Don’t fall into the “program of themonth” syndrome. The program should have a heavy emphasis on self-awareness so leaders can scale themselves, along with a heavy dose of understanding how to read and lead others. You may even want to employ a psychologically oriented business coach that can tie ALL development to the business goals of the organization. Your program should be challenging, uncomfortable and lead people to choose more successful behaviors as leaders. Make sure your exec team knows THEY are responsible for the success of the program, not the consultant you hire.
  • Leverage Leadership: With your customer in mind, determine the most significant areas of your business where leadership needs to be grown fastest to avoid quality or productivity issues. Also remember that abusiness issue or problem is a great training ground to build leadership, collaboration and teamwork. One of our clients had come to us to help with scaling (developing) the leadership and human system threeyears ahead of anticipated rapid growth. This forethought is now paying dividends as they have enteredunprecedented fast growth.
  • Manage the Bubble: Determine how much time you have for developing those that struggle to step up and make necessary changes in behavior. Provide coaching but also be able to remove the people who can’t or will not step up to the requirements of the new system. We call this the “philosophy of the questions marks.” That is, how much investment of time, effort and money do you tolerate? This depends on a lot of factors and each company and situation is different. All execs must be aligned around this.
  • Dive Deep: into your organization to start networking and developing leadership early in careers. With the younger insist they master the technical, administrative and scientific parts of their role—but also encourage them to begin paying attention to the softer side of how to lead people team well.
  • Collaborate Competently: Tie your development programs to collaboration across interfaces. This will ensure the efficiency, quality and safety goals are met with fewer avoidable errors.
Your company is the classroom, never waste a good crisis!

The thousands of friends of Grinnell Leadership - if you enjoyed this article, I would greatly appreciate you sharing this article on LinkedIn.