Have you ever been asked the “tough question”? The one that pushes you to rethink your comfortable conclusions?
That happened to me a short while ago. I had flown out to Orlando to meet with a new vendor we had hired to take on a key project for us.
But when this vendor said, “David, I’ve read SCALE and loved the book. But it was almost overwhelming with all the good ideas. It was too much. Couldn’t you make it simpler–you know, boil it down to its essence?”
Initially I got defensive and was put off by his question. After all, it had literally taken me and my friend and co-author Jeff Hoffman (co-founder of Priceline.com) a full year of work to complete that book, and in the process the publisher (Penguin Random House) had pushed us to cut over 30,000 words of the manuscript.
But he was earnest in his question, and it just stuck to me. The more thought I gave it the more I realized that I had grown complacent in our core business coaching practice. After all, the results our clients were enjoying were superb. On average, the annual growth rate of clients who had been with us for 6 months or longer was 64.2%, and at the same time these same clients had increased his or her company’s “Owner Independence Index” score by 194.5%.
They were working fewer hours, enjoying their businesses more, and earning a lot more money.
But if I were to start from scratch formulating the methodology to scale a company, was this really my best?
Was there a way we could reformulate our core business methodology so it was simpler, easier, and faster?
I started like I always do by writing notes to myself in my business journal. I kept turning this question over and over in my head.
I’ve obsessed over it really. I kept asking myself, “What would I leave out?… What would I need to cover?… How best should I sequence these steps?… How could I simplify this?… What would be the most common stumbling blocks, and how could I pave them over to make it easier and more automatic for a business owner to get the desired results?… What is most essential to start with?…What should I save for later?…”
In fact, if you were to look into my business journal you’d see dozens of pages of thoughts and ideas I played with until one day I took up some dry erase markers in my office and just started to write on the 4′ x 6′ dry erase board in my office. (See below for picture.)
And the ideas just clicked. When I was done writing about an hour later I had the entire “formula” down on the board as an outline.
The outline of the S.C.A.L.E. formula I came up with hanging on my office wall.
In this article I wanted to share with you the big picture outline of the actual formula for growing your business and getting your life back.
It’s based around the five letters of the word, “SCALE”.
Say Yes to Building a Business Not a Job
The “S” stands for “Say Yes to Building a Business Not a Job”. It has to do with the internal game of business by which you recognize that not only is it possible for other business owners to build a business independent of themselves, but that–gulp–it’s possible for you too.
Whether you own a contracting business like Mark Huha does who’s grown his company (Quality Property Maintenance) by 107% while at the same time increasing Owner Independence by 133%. Or you’re a bariatric surgeon like Tom Umbach (Blossom Bariatrics) who has grown his practice by 50% while increasing Owner Independence by 280%, the first step in successfully and sustainably scaling your company is make building an owner-independent business a stated goal of your company.
In fact, the first element of the S.C.A.L.E. Formula calls on you to make the concrete decision that one of the stated goals of your business is to build it to be sustainable independent of you.
This is good for your employees (i.e. gives them more opportunity, greater stability, and room to grow); this is good for your customers; this is good for your suppliers and vendors; this is good for your investors.
This brings us to the second element of the S.C.A.L.E. Formula–creating the time you need to focus on growing the right way.
Claim Back Your Time
The “C” in the S.C.A.L.E. Formula stands for “Claiming Back Your Time”.
Here’s the thing, you’re already working enough hours. You just need to carve out a small percentage of the hours you’re already working each week, and to invest this time in higher order activities to help you scale your company.
Now when you first try to do this everything in your business day is going to fight back to make it hard for you to claim back these hours.
Your staff is going to need you… your customers are going to cry out for you… your vendors are going to ask for you…
The biggest challenge of all will be how your own self talk will push back. You’ll say things like, “But I’m already working 65 hours a week. I just don’t see how I can fit in any more.”
But I am not asking you to fit in any more, I’m asking you to find a way to reclaim a little of your time each week to focus on better.
This is why the second step of the S.C.A.L.E. Formula is to help you structurally find 4 to 8 hours each week of your best time to reinvest in upgraded uses in your business.
In all the formula outlines 5 proven “time mastery strategies” to carve out these 4-8 hours each week of your best time, giving you the starting point to apply the rest of the formula, many of which I’ve written about here in prior articles.
Most importantly of all, these 4-8 hours won’t be in slivers of 5 minutes here, 15 minutes there, but will be in blocks of 1-4 hours so you are able to concentrate and get valuable work done.
Take the example of Bob, owner of a successful industrial products company in the western U.S. Bob’s business worked, generating a healthy 6-figure income for Bob, but he effectively owned a job that required him to be there each day to run the day-to-day operations and manage his small team.
He felt torn because while there was a part of him that wanted something more–more growth, more profitability, and more time, he just didn’t think he had the time to do anything about it.
Think about this for a moment. How many business owners do you know who, like Bob, are so busy doing the “job” of their business that they don’t make the time to step back and build their business as a business? Too busy to get outside help to make it better? Too busy to try out new solutions to chronic problems in the business?
That makes about as much sense as the person digging a hole who says, “I’ll stop digging as soon as I reach the bottom of this hole.”
So the key with this stage of the S.C.A.L.E. Formula is for you to structurally claim back 4-8 hours of time each week, hours that you were already working, and redirect these hours into higher value activities.
When Bob followed the formula and did this he grew his sales 33% (taking his sales to $2.4 million) while increasing his profit margin. Best of all, he also increased his company’s “Owner Independence Index” by 133%.
So while it may be easy to blame how busy you are as the reason why you can’t scale your company, doing so is both non-productive and misleading.
You do have the time. It’s hiding in the very hours that you’re already working.
You just need to claim back a small percentage of them (in Bob’s case he started with just 7% of his working time) and invest those few, precious hours into upgraded uses growing your business the right way.
Align Around Your “Fewer, Better”
Now that you have reclaimed a small block of your time each week, what should you invest that time to do?
This is where the “A” in SCALE comes into play. It says to, “Align Around Your ‘Fewer, Better‘”.
On one level this is where you personally will be focusing your freed up blocks of time. On another higher level, this stage in the S.C.A.L.E. Formula means to systematically get your whole company to focus its best resources of time, attention, and money around those things that make the biggest difference to your company’s success and growth.
You don’t need your team to do more, you need your team to do better. What are those fewer, better things that if you and your team consistently invested your best resources in would yield the greatest growth and progression for your company?
Leverage Your UBS as the Doorway to Start
Systematizing Your Company
To increase your company’s capacity, sustain your growth, and increase your company’s Owner Independence Index, you’re got to build, use and refine systems and controls.
This is why the “L” in SCALE stands for “Leverage Your ‘UBS’“.
Your “UBS” is the master system of all your systems, and it’s the doorway to begin the process of systematizing your company.
I’ve been helping business owners for two decades now create systems driven companies, and the UBS concept is by far the single most effective best practice to enroll and enlist your team on becoming a systems driven company. Keep reading here as it will be the subject of a future article I’m working on now. (Or if you can’t wait, see pages160-167 of my last book, SCALE: 7 Proven Principles for Growing Your Business and Getting Your Life Back.)
Execute with “ACR”
The “E” in SCALE stands for “Execute with ‘ACR’“.
“ACR” is the missing ingredient for actually turning the S.C.A.L.E. Formula into tangible, reliable results for your company. It’s the 3 layered fuel to get you to execute and implement on the other four elements of the formula. The acronym stands for “Accountability, Clarity, and Reasons.”
Accountability: Having the structured, formalized (vs ad hoc, informal) accountability systems to hold you and your company on track, quarter by quarter.
Clarity: Knowing exactly what your working towards and your plan of action to obtain it. For us, we push clients to reduce their strategic focus to a series of rolling 1-page Strategic Action Plans each quarter.
Reasons: Being very clear on your driving reasons for why you do what you do.
So there you have the basic outline to the S.C.A.L.E. Formula.
Again keep coming back here for future articles wherein I’ll flesh out more of the parts. If you would like to get the in-depth details of how to apply the S.C.A.L.E. Formula to grow your company and reduce its reliance on you, then please join me for a special webinar training I’m doing that’s coming up very soon.
Remember this, without taking action, the formula is just a dead methodology. But when you take action and follow it, the results you can enjoy include both growth and increased personal freedom.