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Scaling Entreprenurial Organizations

October 2, 2014

Entrepreneurial organizations reflect the personality of the founder and emotional temperament that accompanies these individuals.

Capture“Entrepreneurship is the process of starting a business or other organization. The entrepreneur develops a business model, acquires the human and other required resources, and is fully responsible for its success or failure” according to Wikipedia.

New employees and executives brought into the entrepreneurial company need to ride the roller coaster of change that accompanies the nature of startup organizations. The companies are often bootstrapped together, short on funds, and long on ideas. Rollup sleeved mentality is the survival skill to get over the hump of profitability.

Great examples of ideas that are looking for funding can be found on Shark Tank (ABC TV), hashtag #SharkTankWeek. Ideas that are driven by the founder at times are blinded by their own passion. Passion does not necessarily equate with reality.

Entrepreneurs often seek two resources; dollars and expertise. Those entrepreneurs that win big are those that leverage the knowledge and experience of others that understand scaling of business concepts.

Entrepreneurial companies are great studies of personality and risk tolerance.

I have had the opportunity to work with some of the finest and most creative entrepreneurs in retail, packaged goods, and telecommunications. What they had in common is the intense connection with an idea and a focused commitment that revenues would flow with unbridled abandonment only if an investment is made in scaling their product platform. Long-term success of entrepreneurs comes from the understanding that success requires surrounding themselves with individuals that understand scalability within strategic growth planning.

Entrepreneurs need to accept what they do not know and trust other talent to close the knowledge gap. I had the good fortune of great mentors to learned and apply high-growth strategy early in the entrepreneurial game. These companies developed the product category and remain product leaders which include Starbucks Coffee, PowerBar, Jamba Juice, and NextG Networks (now part of Crown Castle). Each of these companies were driven by inspired entrepreneurs that understood the need for scalability as a clear strategy for future equity events. My role was application of technology and process change, while providing guidance to HR with managing cultural change that positively supported the entrepreneurial spirit of the founders. Proper planning lays the foundation for planned cultural shifts as organizations grow.

Lessons I learned along the way about organizational scaling:

View Infrastructure is a profit center: The organization will experience real growth when there is acceptance of the investment in infrastructure. This understanding is directly associated with strategic planning. The organization needs to commit to the costs and changes and measure change in terms of a profit center based on impact to overall performance. The cost associated with process change and technology investment can be translated straight to the P&L.

Scalability: Growth will die if the infrastructure is not scalable. Understand what is required and the timing of changes that allow infrastructure to evolve with planned disruption.

Investment: Infrastructure development is an investment just like other R&D. Planning is the precursor of cycle change.

Education: Aggressive education of decision makers about operational changes that need to take place to keep pace with growth. Leadership and planning teams must be prepared to anticipate change and how it affects the organization to manage effectively.

When companies cannot grow they die. Others will fill the void very quickly. Entrepreneurs need to think about growth and succession planning around roles and responsibility to keep momentum moving forward. To scale an organization is to shift and share decision making and allow organizational leadership do what they do best.


Dr. Henry Hirschel, DBA, MBA, MS-Ed

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