Platt Perspective on Business and Technology

Moving past early stage and the challenge of scalability 27: avoiding sclerosis and keeping the organization lean and simple 2

Posted in startups by Timothy Platt on April 3, 2013

This is my twenty seventh installment in a series on building a business for scalability and long-term success (see Startups and Early Stage Businesses, postings 96 and scattered following for Parts 1-26.)

I wrote about lean and agile approaches to business organization and operational efficiency in this series in Part 26, where I first started this discussion of organizational sclerosis as a barrier to business scalability and expansion. I noted some relevant citations to my already ongoing discussions of this more general set of issues in that posting and suggest your reviewing it as background to this.

I started in Part 26 to explicitly add consideration of the role that a lean and agile approach can play in business expandability and scalability and continue that here from a set of points that I arrived at in that earlier installment:

• If scalability and business expansion constitute a strategic goal for a business and if it seeks to increase its effective scalability range through lean and agile methodologies,
• Then its basic understanding as to what constitutes lean and agile for it, have to change in synch with the business’ changing needs and circumstances as it grows.
• A switch to a new linear scalability path as becomes necessary as a business expands as far as it can along a simple modular replication model, is always going to call for a switch to a new lean and agile model too.

So with that, I find myself approaching a same business situation and source of operational and strategic need, from two at least initially different-seeming directions:

• An emerging need for a nonlinear change in how a business scales up if it to continue to successfully do so, and
• A need to reconsider and reframe goals and priorities, and operational methods that would enter into any effective lean and agile methodology as the business does this.
• And if you only pursue the first of these two approaches and take an overall results and outcomes oriented approach, you are going to find a need for change in direction and approach to scalability, as your business’ expansion efforts begin to break down – and as this continues past a point where you could reasonably assume that any downturn to simply reflect a random or otherwise unrelated blip in effectiveness.
• If you approach this from a lean and agile methodologies approach and from a performance-based business model approach in particular, you have more of a capability for spotting need for change in approach, before you run into it and into a downturn resulting from failure to proactively do so (see my series Moving Towards Dynamic Performance Based Business Models at Startups and Early Stage Businesses, postings 123 and loosely following.)

I tend to write about reactive and proactive approaches, and for smooth scalability, proactive is always preferable as reactive means damage control and recovery from what might very well have been avoidable risk and expense, and loss of competitive position. So peeling back the onion of this discussion another layer:

• When I write of lean and agile here, and of discerning new and emerging lean and agile needs before those needs become critical, I am writing of smooth and efficient scalability and expansion as a proactive enterprise.
• And with that, I explicitly connect this series to my Performance Based Business Models series as noted above, and explicitly here to its Part 3: integrating innovation and change into an ongoing lean and agile system, where I discussed a three scenarios approach: developing best, worst and median effectiveness planning models.
• And I specifically note here that performance based business models might offer value for tracking and managing here and now business effectiveness, but they are also very specifically oriented towards long-term planning and the development and maintenance of capacity for long term success, and with scalability and expansion where they are desired goals.

Returning to the second bullet point of the immediately preceding list, proactively plan for worst, best and median results as strategically defined outcomes contingencies, and look for ways in which the business might be tracking in alignment with them. A drift towards a worst-case scenario outcome should be seen as evidence of a need to review scalability modeling if the business is growing, and lean and agile criteria and assumptions in place in any event.

And at just over 700 words, and with further foundational material added I come to the specific wording with which I ended Part 26 of this series:

• I will at least begin an outline as to how this type of strategic and operational review and refinement would be carried out.

I have already started that by noting, for example the three scenarios method for strategic planning and operational assessment that would feed into that. But my intended goal when writing that was to approach this set of issues at the level of operational processes and their execution, and of performance tracking at that level. I am going to pursue that in my next series installment. Meanwhile, you can find this and related postings at Startups and Early Stage Businesses. You can also find related material at Business Strategy and Operations and at its continuation page: Business Strategy and Operations – 2.

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