Blindfolded business man navigating upward curve on graph

Scaling up: Remembering the human factor when you are growing your company

Guest blog: Simon Darnton on how not to get lost in process as your company expands
5th October 2017

Scaling a business is very exciting. You’re exploring the unchartered territory of yourself and your business, and it’s an adventurous journey.

However, just in case you didn’t know, scaling a startup is also one of the most challenging and treacherous things you can do in business. Many start-ups fail along this path, often due to reasons not necessarily to do with their product, market, or the standard of their people, but because the organisation fails. These failures can be due to a myriad of things and usually it’s down to a cocktail of issues rather than a single cause.

“As your company grows, you’re going to find yourself further from the engine room”

 

Once you begin to scale, you will inevitably get to a stage where you’ll hit some problems with how your company is functioning and how people are working, both individually and collectively. You’ll also hit upon those more formal demands. For example: tax and accounting; hiring and letting people go; who makes what decisions; who has responsibility for some things and not others; who does what work and not other work; and how the work gets done so that it’s good enough. Below these more formal aspects of doing work, there’s all the other social stuff so critical to a good working environment which is all a lot less tangible.

At this point in proceedings you’ll no doubt come across the wonderful world of business processes and systems. And you’ll be advised that you need to design and implement them. Some advisors will say that these are what make your company and that drive its success.

Business processes and systems are often described using a terrible analogy (and I’ll apologise for continuing to use it throughout this blog post) that they’re like tuning the various parts of an engine to make it as fast, reliable and efficient as possible. This may seem to make good sense, but I don’t particularly like this analogy as it can be pretty misleading. This is because I’ve had experience both in business processes and in engine tuning as part of my history racing and coaching with motorcycle racers. So before you leap in with both feet, it is useful to hold on to that inevitable truth about the real world of engine tuning which reflects that of business processes and systems too; it is as much about what you want to achieve, balance, compromise, and usability as anything else in life.

So having said that, let’s delve into this world of tuning up your business.

What is a business system and process anyway?

A business system is a method, procedure, or collection of activities that produce some kind of output or result.

A business process is a series of steps that produce something – a product or service.

A business system is made up of lots of different processes.

Your business is a system that is made of lots of interdependent systems.

But, in short, this is about how you get things done in your business.

Your business

Because systems and processes are representations of how you get things done to make what you do a business, they are directly related to its development and maturity.

For example, when you start up, you might just create your invoices in a spreadsheet template and use a spreadsheet for basic book keeping. Invoices and receipts go in a shoebox somewhere. When you’re on your own, conversations about different roles, responsibilities, and decisions merely happen inside your head, or you breathe them into life down the pub with your friends.

As your company grows, you take on more people and the way you do things necessarily needs to change too. You might need a proper accounting system that lets your accountant draw down all the necessary data for your tax returns and accounts.

Then you go multinational and you’re in a completely different ballgame.

The processes and systems that are appropriate for your business will depend on its nature. If you’re in a field of work where there are strict compliance and legal requirements, there will be a whole host of formal processes that you must adhere to that will be designed according to those regulations.

They’re not just technology

I have often seen business systems and processes discussed in the same breath as technology, as if they’re two sides to the same coin.

“Some of the most valuable systems and processes I come across are entirely social”

 

In my work, some of the most valuable systems and processes I come across are entirely social – i.e. between human beings without a computer in sight, including within larger teams.

So don’t get caught up in an entirely tech approach to designing and implementing systems and processes.

I know I’m talking to a tech audience here but even the latest technologies with the latest implementations have inherent restrictions and limitations in the way that they support even simple processes.

Still reading? Here’s my take on this:

The human factor

All business systems involve human engagement.

When I was cutting my teeth in the consulting industry I had to learn all about business processes and systems – their analysis and design – and I worked on a fair few projects in some huge multi-nationals. This was when I heard a bunch of experienced business process analysts and engineers joke between themselves that the one thing that’s going to get in the way of their well designed system is a human. I probably don’t have to point out the irony in this..

But basically, if one thing is going to wreck a system or its constituent processes, it’s going to be a human being (or a bunch of them).

Like it or not, this isn’t the fault of the human. Whether we are aware of it or not, it’s our experience that determines how we interact with, or function within, systems and processes.

Although not a scale-up, here’s is a great case study from BT. It used social media to ‘enhance’ its customer services using social media. It was lauded as a great success saving the company £2m, reducing customer churn, and the feedback from customers told them they much preferred interacting with BT in this way – their experience was better. You can accept this view, or alternatively, one could see it as a clear reflection of how bad the customer experience was of BT’s customer services before the ‘enhancement.’ But whichever way you look at it, the bottom line is customer experience, and, no doubt a more positive experience by BT employees too!

Unfortunately, much of the world of business processes and systems is stuck within a paradigm of dealing with all this in machine-like, computational ways as if organisations and people function like machines. They don’t.

Processes and a moving target

Systems and processes, particularly those enshrined in technology have a unique ability to either stay the same, or require significant reworking to stay with the growth of the business. They’re also a great distraction from the social problems of rapid organisational change.

The biggest question I suppose then, is how do you go about creating the appropriate systems and processes that provide your business with the necessary foundations and structure to grow but without limiting its growth (and its uniqueness)?

Because I spend my existence within the human domain, in psychology, culture, and behaviour, this is my natural focus.

Here are some thoughts that you may find useful to consider for yourself:

Give people a place

Assuming you’re a founder/entrepreneur/leader of a growing company, you’ll probably have had to go through those periods of taking on board multiple roles, often simultaneously, together with running around like a headless chicken because it all gets too much. You may still be very comfortable with switching roles at the drop of a hat.

Many people you’re going to employ may not have that level of comfort.

So provide a framework within which people can function so they know where they stand in the team/organisation. While a lot of people put a great deal of stock into having job tiles, I’m not so sure this helps that much in startups and scale-ups. Perhaps more generic roles/activities/responsibilities/accountabilities could be more appropriate but that depends on the nature of your business and who you need to employ!

Communicate

As your company grows, you’re going to find yourself further from the engine room. Make sure you have good communication channels. For example, regular but well-defined sessions where people can talk about how they are doing things, problems, work arounds, and changes, including open dialogue and idea generation.

Make sure this is open to grumbles, gripes and criticism too. I don’t think having rules (implicit or explicit) that input always has to be positive or constructive allows us to get to the heart of issues. People feel frustrated, angry, sad, and negative as well as happy, energised, and positive, so let them express it because really creative things can come out of it!

Implement

Allow those doing the work to implement changes based upon their experience and knowledge as well as the group discussions. Make sure these are communicated.

This is similar to the philosophy of ‘Lean’ which allows any worker to stop the production line if they encounter a problem. Here, everybody is onboard with Kaizen – “changing for the better.”

Self organisation

In my consulting days within the knowledge field, I was always delighted by how many times I came across both small and large groups of people who had essentially self-organised themselves in highly effective ways that the company leadership could never have designed, instructed or conceived.

This nature can be smothered by top-down process design which is subsequently imposed upon employees.

Reconsider/re-appraise/re-organise

Your business is growing which means it needs to change. There are some people who seem to think that constant re-organisation is a bad thing. Yet if the nature of your business is changing, then perhaps this needs to be reflected in how it’s organised and how things are done?

There are many times I’ve come across teams and divisions within forward thinking, innovative companies that have lost that edge because the systems and processes in place keep them in place – that’s how we’ve always done things or that’s how the system dictates we do things…

To come back to that analogy of engine tuning: It’s only a tool we use for locomotion and the value of the engine comes from how usable it is for the human using it within their specific context.