In his book “Scaling Up”, Verne Harnish says that the keys to scale up your business are attracting and retaining the right people, creating a truly differentiated strategy, directing flawless execution, and keeping cash reserves to weather the storms. He also talks about the few ventures that grow into “gazelles” (think rapid growth).
While people continuously create ventures, most of these companies stay as small organizations. A few, however, grow into “gazelles”, breaching the $1 million barrier and scaling up to $10 million, $100 million, and even $1 billion. For these “gazelles” to continue to survive and scale up further, they focus on four critical areas of the business namely - People, Strategy, Execution, and Cash.
It Starts With Who
Great leaders and managers play a crucial role in the goal to scale up as it is up to them to steer the everyday activities and routine of their teams and make sure that they are aligned with the company’s vision, values and goals. In this key role, coaching skills are more important for leaders because they must inspire their teams and keep them reminded to the greater purpose of their work. They must make sure that they have the right people in the company doing the right things aligned with the goals defined by the firm’s strategy.
As Jim Collins (Good to Great) says “leaders of companies that go from good to great start not with “where” but with “who.” They start by getting the right people on the bus, the wrong people off the bus, and the right people in the right seats. And they stick with that discipline—first the people, then the direction—no matter how dire the circumstances”.
Cash is King
Cash is king. Without cash, growth can never be achieved even if a company has the best leaders, most competent and dedicated employees, and the best strategy. Cash enables growth to happen, but in reality, nothing depletes more cash than growth. As Clemens Rettich says,” Cash flow is the blood of a business” . This is why the first area of focus that a company must start with is cash.
If you want to scale up your company to become a “gazelle”, besides focusing on People, Strategy, Execution, and Cash, you also need discipline, persistence and action.
Jim Collins found that successes in three main areas, which he terms disciplined people, disciplined thought, and disciplined action, were likely the most significant factors in determining a company’s ability to achieve greatness. “Gazelles” exemplify these characteristics.