Here’s How to Scale Your Business
Companies that were earlier focusing on scalability are now trying to survive the economic slump. Scalability has become a back burner during this time. Companies are thinking of sustainability and improving their market share. Good organisations are now focusing on the market share.
According to KPMG's report, the rapid outbreak of the coronavirus presents an alarming health crisis that the world is grappling with. In addition to the human impact, there is also a significant commercial impact being felt globally. As viruses know no borders, the impacts will continue to spread. In fact, 94 percent of the Fortune 1000 are already seeing COVID-19 disruptions.
To understand the scalability process, it is more significant to understand the term 'SCALE' in depth.
--S stands for strength that is divided into long term and short term. Both these terms should marry each other.
--C stands for culture, competitive advantage, and core competence. Companies have to bring these elements into the business.
--A stands for actionable plan and accountability. Organisations have to create strategies in terms of scale
--L stands for liquidity that is an essential part of scalability and is a continuous process.
--E stands for execution that performs a seamless and consistent impact.
There are mainly different levels of scaling up for the company. The companies should know as to when the right time of scaling up is.
"The hallmark of successful scaling is to know when to hit the brakes," Gaurav Marya, Chairperson of Franchise India Holdings, said in BusinessEx Webinar.
For scaling up, a company has to halt its journey, redefine its strategy, redefine its position of liquidity and integrate it in the culture. The firm has to perform this cycle multiple times to find different orbits and changes.
Components of Scalability
There are mainly three components that a company needs to bring scalability into their business.
1. New Markets
The company should know which new markets it can go and where it can go. It can also see from where its customers are coming.
The firm has to research what new products it can bring and address to the same audience that it has.
3. New Channels
The organisation has to ascertain what new channels it can use to enhance its growth.
How to Scale Up
To scale up the business, there are various steps that a company has to follow in order to increase its business.
1. The company has to evaluate its current position and create a big road map. Following this, it has to create an assessment map and put the current capability of the organisation.
The company has to gauge its performance and priorities of the customers. If these factors are married then the business cannot come to firm predictability. For better understanding, here is an example. Flipkart had begun with a business model that is different from today. It was earlier closely similar to Amazon and was selling books just like the American e-commerce website. However, it continue to evolve by forecasting the future.
- Gestation Cycle
When the company starts scaling up, it underestimates things in some forms like how the market needs to be evolving. The gestation cycle is divided into two things.
--What is the go-to market strategy of the company?
--What is the market shift cycle? How much time will the company take to shift?
- Organisational Capability Development
When the company scales up, how soon it will be able to define its capability. It has to answer what capability it needs to define and build. These capabilities are on entrepreneurial as well as leadership level.
Capitalisation is directly proportional to the scale. Scalability and capital raised work on different timelines. It needs to have 12-18 months’ lifecycle from the next lifecycle that the company will have. If the firm is envisioning to scale up, then it has to scale up for the next orbit that it has been working on now. Ideally, a company should have two teams that are, capitalisation scale and market guidance.
- Predicting Consumer Demand
The company has to define the overall market. How big is the market? What is happening there? Is there any risk of product substitutes coming there? These days disruption has become the biggest problem. Almost every business becomes irrelevant because there is an unseen competitor that shows up and has a phenomenal substitute of whatever a company is producing.
- Break Marketplace into Small Components
It is significant to understand the marketplace. Suppose, if there is a tyre company. It has a huge marketplace but seeks to divide into more components like cars, passenger cars and industrial requirements etc.
So, the company has to define small components in a structure as where these demands are coming.
- Keydriver for Each of the Drivers
Identify small components in the business, whilst the major business is at a certain risk. There may be other components that can come through for everybody.
3. Periodic Sensitivity Analysis on Every Component
The company has to understand every stage now. It needs to know what happens in the market. How the consumer demand is changing and how it is going forward.
4. Leadership Design in the Organisation
Leadership is not limited to the management. It, sometimes, becomes a roadblock at all levels. A lot of challenges come up. The basic purpose of hierarchy is breaking off bureaucracy. The biggest problem in scaling up is that they create bureaucracy that does not help them grow.
A company has to embrace new culture and beliefs. Also, leadership roles should move attention from the present to the future. It has to give a view of future goals. If a leader fails to do so, then the company should change individuals in leadership roles.
Small and medium sized companies (SMEs) should see what their leadership design is. Leadership should pass this message and bring the culture of belief system in the organisation so that they can start thinking in the same line.
A slew of things that SMEs have to juggle presently. Firstly, they have to evolve leadership. Secondly, they have to create a balance between process champions and business guardians. Thirdly, there should be a difference between think tanks or thinkers and executors. Companies should marry both the cited factors.
The company should spinpoint its team and ask what leadership role is, who process champions are, who business guardians and think tanks are, and who executors are.
5. Embrace Technology
Every company has to embrace technology. A company that immensely implements technology scales up faster. Within technology, there are three more components that as follows:
- Business Intelligence
It is important as it is the guiding force and scales up techniques
- Process Management
The Indian companies would have technology implemented in the process management like sales, inventories, marketing function.
- Create Consumer Interface through Technology
Companies have to infuse into consumers with the help of technology
The above-cited information should be utilised for companies that want to scale their business in the offing.
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