This is reprinted from the Harvard Business Review site. A big thanks to Julia Kirby for the wonderful editing.
Start talking about the challenge of “scaling” with people, and you’ll find the term gets used to mean a lot of different things. For example, when entrepreneurs talk about it, they are usually struggling with matters of organization. Take Citrus Lane CEO Mauria Finley, whose company was experiencing some growing pains, appropriately enough; the startup sends monthly packages of great baby products to moms. After raising $5.1 million in capital in 2012, it grew from 6 to 20 employees.
Back in 2011, in Citrus Lane’s first six months, its small founding team worked in a house and ate lunch together every day around a big table. Any problem or opportunity that arose was dealt with right then and there, lest misunderstandings fester or business prospects slip away. Growing to 20 people working in a more traditional office setting did not strike anyone as extreme change, yet the team found it had to work a lot harder to unearth problems and opportunities. Even more tricky, they had to learn to articulate something that had been tacit: a shared understanding of goals, culture, and what it takes to succeed at Citrus Lane. Today, they constantly remind each other to spend time with newcomers and, as Finley emphasized, not just tell them these things when they are hired or remind them a few times. The scaled-up organization needs to hear about what matters most at Citrus Lane over and over, to live these beliefs every day, and to observe her and other leaders living them, as well. Deliberate effort is required because “it isn’t something that just happens naturally at lunch every day any longer. We are too big now.”
A growing employee base represents one type of scaling challenge. Since my Stanford colleague Huggy Rao and I decided several years ago to study scaling (it’s the topic of our forthcoming book Scaling Up Excellence), we have heard about many others – so many that we thought, early on, that we might need to put a finer point on which form we hoped to shed light on.
For example, when leaders of much larger organizations talk about scaling, they’re often talking about something more akin to replication. In a 2001 interview with HBR, UPS’s then CEO Jim Kelly described the growth of the company: “For decades, we’ve been able to grow tremendously simply by expanding our core business geographically. Really, UPS’s first 75 years was spent expanding across the United States: first to 13 states, then to nine additional states, and so forth. We just took our core delivery business and applied for rights in different states.” Today that kind of marketplace scaling often means a more complicated process of global expansion– such as IKEA’s opening stores in China, or Home Depot’s failed efforts to do so.
And then there are the organizational leaders who use the term scaling to describe their desire to find pockets of excellence in behaviors and beliefs in the organization and spread them further – a different challenge than adding new people and locations. We studied how Wyeth, the large Pharmaceutical firm (now part of Pfizer) made dramatic improvements in cost and quality across its manufacturing operation. It first created pockets of excellence in a few small teams in each of eight plants (calling them “mini-transformations”) and then relied on mentoring and coaching to spread the superior practices throughout each plant, from one team to the next.
Still another variation on scaling is when better practices are transferred across networks of organizations. Between 2004 and 2006, for example, a Boston-based nonprofit called the Institute for Health Improvement led an effort called the “100,000 Lives Campaign” to raise awareness in U.S. hospitals of the importance of some simple practices (e.g., more frequent and thorough hand-washing) in reducing infection rates. Ultimately, some 3200 hospitals comprising over 70% of U.S. beds participated in the Campaign. There is compelling evidence (including analysis done by members of a Stanford doctoral seminar that Huggy Rao ran about five years ago) that the number of preventable deaths in U.S dropped by about 120,000 during this period. (Other factors probably contributed to that decrease, but the Campaign clearly played a large role.)
In each of these situations, “scaling” refers to something different. But as we dug deeper into these and other cases, academic studies, and stories, we realized what they shared. Scaling challenges nearly always come down to the same problem: the difficulty of spreading something good from those who have it to those that don’t – or at least don’t yet. It is always, in other words, the problem of more.
Finley and her team face the problem of more – and the success of her growing organization depends on solving it. The need for more of what was working well also challenged Wyeth, IKEA, and the Institute for Health Improvement. Have their successful efforts come from the same mold in terms of what they are spreading and by what method? No – and yet, we are finding a great deal of commonality in the obstacles that arise and the decisions that must be made. We’ve discovered guiding principles that turn out to apply as other leaders and teams go about building and uncovering pockets of exemplary performance, and spreading those splendid deeds.
Sometimes the way to learn more about a subject is to focus in more tightly and become more precise in one’s use of language. But sometimes the challenge itself is big enough – like the basic problem of spreading something good to more people and places without screwing up – that it doesn’t help to narrow its definition. Sometimes, even with the use of a word, it’s better to scale it up