When the topic of scaling comes up, almost all of my interlocutors first think of bigger, better, more international. And names such as Amazon, Airbnb or Uber quickly come up — i.e. from companies that have managed to develop from a start-up to a multinational player. Scaling is an issue for companies of all sizes. And for some companies, there are good reasons not to grow, but to consciously cut corners in order to survive in changing markets.
More customers, higher sales, new business areas — anyone who wants to achieve this is faced with important questions: How can you expand your offering and reach larger markets without sacrificing quality? How can you grow bigger and remain profitable at the same time? And how can we make this growth sustainable? Anyone who follows the economic news knows that not every scaling is successful.
For me in consulting, scaling means keeping an eye on very different topics — from resource management to process optimization, market research and, above all, the people who work for the company and stand for its results. During the pandemic, we saw how quickly some companies lacked important resources — not just raw materials, but sometimes things that were previously taken for granted, such as pallets. We are currently observing where everything is stuck when it comes to digitization. And almost all industries get the biggest stomachache when it comes to personnel. The skilled labor market is empty in some professional fields, and headhunters are booming. Woe betide companies that have not nurtured and maintained their corporate culture or misjudged team dynamics — they are usually the first to fall by the wayside in the “battle for talent” and lose valuable employees.
Which brings us to my favorite topic when it comes to scaling: strategy or strategies. I am often surprised how few company managers think in the long term, but strategy is THE key to successful scaling: What is the vision, where should the company develop? What funds are available, for example for investments in technology and automation? What requirements must be met by the team, and how can talent be identified and promoted — even internally? Which (cooperation) partners could contribute to success? Is the company structure so flexible that it is possible to react quickly to changes? And last but not least: How do we set up sales and marketing to achieve the highest possible level of customer satisfaction?
After upscaling, let's talk about downscaling — a procedure that many companies don't have on their mind when they approach me. In fact, it sometimes makes sense to bake smaller but better rolls and deliberately avoid size and/or range. For example, markets are sometimes smaller than expected, but the product is so successful in these smaller markets that it's worth staying on track. Or the competitive situation is changing so that it makes sense to focus on existing core competencies. Political changes can also make sense to downscale, just think of the closure of numerous company locations in Russia since the start of the Ukraine war. Bakeries such as the Bread purists in Speyer, which remove rolls and sweet pastries from their range and focus instead on baking high-quality breads. The double benefit: satisfied customers because the breads taste good and are easier to digest, and satisfied specialists due to missing morning shifts. As the example shows, downscaling should therefore also be strategically well thought-out in order to achieve important corporate goals.
Are you currently working on this topic, do you need professional assistance or a competent sparring partner? Then feel free to talk to me.
