The startup phase is where most ideas die and where a lot of entrepreneurs end up in deep crap. It is a dangerous, risky venture to fight and build something out of nothing. However after you succeed in building a profitable business and enter the scale up phase, you are going to realize that it is almost just as hard to go through it as when you were starting up.
Here is what usually happens from the startup, scale up and enterprise phases:
This phase is more like dating. Where you and your employees are trying things out on both ends.
You and your employees have low commitment to each other and have low expectations of each other.
You put high effort on quality control, have a very casual environment, tons of loopholes in your rules and ways of working.
Naturally, the pay is low.
Scale Up Phase
This phase is where you realize who you want to keep in the team. Where you are now looking for more stable and longer working relationships from your employees – rather than short stints. You and your employees begin to build a higher commitment with each other. You also begin to set high expectations.
This is also where reduction of effort on quality control beings – as things turn to processes. Working environment becomes more formal.
Loopholes in your rules and ways of working are attacked and things feel a bit more strict – until a very strong culture takes over.
Pay is becoming better and better.
Here’s the thing: the scale up phase is very tough.
This is where tons of changes happen and happen fast.
People don’t like change. Especially people who started with you and have accumulated authority and comfort.A lot of them will leave and the ones who don’t will oppose you to your face.
You have to have grit. Otherwise you will crumble beneath the pressure and give in. Resulting in a bad shape as your company matures to an enterprise level entity.
A good scale up phase will result to this kind of Enterprise phase
Relationships are kept to a healthy level where everyone still knows everyone. Splitting the team to 50 people per area or 150 people per area is a very strong option to achieve this. Commitment is very high to each other. Expectations are almost impossible but are achieved due to the magic of unity in teamwork.
Quality control effort and costs are very low as excellence becomes the hallmark of the team. Loopholes are shut-down by the team itself as people are unitedly acting in the company’s best interests.
Respect becomes the focus on the environment – giving of a not too formal and not too casual vibe.
Pay is at its best as the number of manpower is utilized to the best extent through the magic of unity as a team – allowing people to take home higher wages and benefits.
A bad scale up phase will result to this kind of Enterprise phase
There are people who don’t know each other anymore. Relationships are clickish – some solidly strong, some not so much. Commitment is dependent on which team.
Expectations are extremely high and toxicity for well performers is also very high while morale is being chomped on by sanctioned incompetence from some supposed team members.
Things are not just formal, but stiff – like machines, loopholes are small but they crop up like mushrooms as culture breaks down.
Starting pay is competitive but for a lot of people, salary growth ends there as turnover becomes higher and higher.
Finally the business owner drowns in a sea of bad hires, making him less trusting and encouraging him to run his business like a tyrant. The employees in return feel like freedom fighters and lose trust in the management as well – increasing turnover even further.
This is why the scale up phase is a huge factor as a company grows. Because it dictates how the company will be in a mature stage.
Doing it right creates for an excellent working environment and a very strong brand.
Doing it wrong is a disaster in the making.