When a company grows, so does the complexity and the challenges. So, how come some companies make it while others fail? We invited growth expert Pelle Tornell to a session on scaling up.
Pelle Tornell is a unique international speaker, author and former entrepreneur who started his career as a luma at Kinnevik working closely with famous entrepreneur Jan Stenbeck. Pelle later moved on to start and scale his own company which he later listed on the stock exchange.
He combines practical experience from many years in various top management and board positions with being a researcher and author on decision making and entrepreneurship.
Today, he is one of Northern Europe’s most prominent speakers on the topic of decision making, and helps SME’s to scale up their organization with his program ScaleUp Academy. The program was designed by famous author Verne Harnish, founder of Gazelles International, that has helped numerous international organizations to scale their operations to multi-billion dollar companies.
Last year Dagens Industri, Sweden’s largest financial newspaper, awarded Northmill the DI Gasell, for being one of Sweden’s fastest growing companies. But, with growth comes a lot of challenges and in order to protect our precious culture and grow steady without compromising with the quality, we constantly question how we can improve ourselves and our organization. Therefore our Chairman, Margareta Lindahl, invited Pelle Tornell to dive deeper into the challenges that growth companies face in different phases.
When Pelle worked with Jan Stenbeck he noticed 3 elements that he believes are vital for growth:
Stenbeck was never afraid of trying new things and break new ground. That’s one of the reasons he was first to market in several industries. In an organization, you should try to encourage everyone to be curious, bold and try new things.
Constant learning was one of Stenbeck's keys to success. He read a lot and always educated himself. As an organization, you should continue to learn, stay up to date and invest in education.
Stenbeck was a master of creating methods for different processes and later on, implement them in other contexts in order for his organization to not reinvent everything over and over again.
All growing companies end up in death valleys. Some of them get up and move to the next phase while others get stuck and freeze and in the worst case, start to die in the valley. Here are the most common reasons for companies ending up in the death valleys:
– Founders/Management becomes the obstacle
– Less focus on customers and the product
– Unclear roles and accountabilities
– The people in the organisation doesn’t develop at the same pace as the revenue and company growth
– Systems, processes, and routines are not scalable
Create a workplace where people can grow and find joy. Attract the best talent and invest heavily in the people so that they feel motivated. The people are those who create the magic.
Can the team state the markets dominating strategy simply and is it driving sustainable growth in revenue and gross margin? Make sure you have a crystal clear strategy that everybody knows and can communicate.
Make sure your organization is built to enable execution and getting things done. It’s crucial to have smooth processes and avoid too much unnecessary distractions.
The business model needs to drive consistent source of cash.
Successful growth companies such as Netflix, Facebook, Google and others have somehow managed to keep the founder's mentality even though they’ve grown, and one of the tools to use in order to do so is the company’s culture, which may be the most precious thing an organisation have.