Growth Versus Scaling: Things To Consider When Your Company Grows Up

The NZ business world is rife with examples of failed start-ups and early bloomers that go bang. But there are also plenty of examples of businesses that ride the waves to become major players in their industries. In Verne Harnish’s book, Scaling Up: How a Few Companies Make It…and Why the Rest Don’t, the answer to successfully Scaling Up in NZ seems to lie in when and how companies decide to scale.

While the concepts of ‘growth’ and ‘scaling’ appear synonymous, in reality, ‘growth’ is associated with profit-loss parallels (i.e., for every company enlargement, there’s a significant cost associated with resource acquisition). In contrast, ‘scaling’ refers to minimal outputs that reap maximum returns (e.g., social media campaigns that cost little but reach a very wide (potential) client base). 

The companies that are most successful tend to scale at strategic times and plan for such scaling in advance. They pay attention to the market, build their company culture, and prepare all staff and other resources beforehand in order to reap maximum growth with minimal exertion.

Mid-sized companies that have an established brand and clear processes are in the prime position to scale up and grow. These companies are already ‘grown-up’, with the next step being to simply spread their wings and fly – much like an early-20-something embarking on their first steps into the working world. 

For such companies looking to enter the next level, it is important to do so wisely and to follow clear guidelines to make the best decisions regarding when and how to scale. Consulting with professionals who can offer advice in this regard, and basing strategies on tried and tested frameworks like that put forward by Harnish, can make scaling so much easier. The more strategically a company scales, the greater its chances of success.