The Holy Grail for most business people and entrepreneurs is to create a massively scalable enterprise that changes markets and people’s lives while making a ton of money. That’s a great end game and some businesses actually achieve it.
Most successful businesses, however, start very differently to that. They start by doing those things that don’t scale. Things that their larger competitors have difficulty in copying. Things that provide them with a discernible competitive differentiation and advantage. Things that can’t be scaled via a technology solution or by adding more people to a call centre. Things that bind your customers and suppliers to you. This is more than just providing good customer service or occasionally buying a key supplier lunch. It is about letting them inside the doors of your business to understand your aspirations and challenges. To draw them into your team as allies. As insiders. As family.
This lesson was driven home to me during the early days of my first business. I was leasing retail sites from the major Australian shopping centre developers and was having an incredibly tough time doing it. The relationship was confrontational but the equation was simple. They wanted to extract as much rent as they possibly could every year and I wanted to pay as little as possible. It wasn’t working for me and I needed to change tactics.
So I looked for an “ally” within the largest developer group. Someone who I could work with who I hoped would take a genuine interest in helping to develop the business and fight internal battles for us within his organisation. I (eventually) found him too – after discarding a few duds along the way.
The relationship took a long time to develop as we worked each other out but bit by bit trust began to build. I had to let him (sensibly) “inside our tent” and show him our inner workings. That’s not easy to do. But I grew to trust him and he never betrayed that trust in more than 10 years. In fact he told me that over time he grew to admire the business and what we had achieved especially starting as we did with few resources and limited cash. He felt that he was part of that success and he was. It was a WIN:WIN too as he built a growing rent book off the back of our ability to open more sites each year.
Looking back on our long association I could not have found a better ally. Nor would the business have grown to the size or scale it did without his help. It was not a scalable relationship (i.e. without either of us it would not have worked) but it did have a huge impact on our ability to scale the business in subsequent years.
I now understand that no matter what your business does or how mature it is, it’s important to pay close attention to not only those things that will scale but also those that are critical to future success that won’t scale. The ones that won’t scale can give you that competitive differentiation you’ve been looking for or, in my case, smoother access to something I needed (reasonably priced sites in shopping centres). It requires the personal touch and a generous spirit, however, and that alone makes it hard to copy or scale.
But that’s the point – it is hard for good reason and therefore many people will avoid doing it. Those that do however know one truth – that sometimes it’s the things that don’t scale that are the ONLY things that will help you (eventually) scale.
Image: Hattie Newman