Six key questions leaders of growing companies should consider

Getting a business off the ground comes with many challenges. And when it comes to scaling up, leaders will have to deal with very different issues. But the hard work is worth it and is richly rewarded.

Only 1% of UK SMEs They are scale-ups, or companies with high growth potential, and yet they generate almost £500 billion. That equates to a fifth (22%) of total SME turnover, which is a significant number for such a small proportion of businesses in the country.

By definition, scale-ups are small and medium-sized businesses that have grown by 20% or more in terms of employees or revenue over the past three years. There are around 29,000 of these are currently in Britain, with another 13,000 scaling pipeline companies hot on their heels. Each of them will undoubtedly be at the forefront of opportunity and come up with brilliant innovative ideas and solutions that will disrupt the markets in which they operate.

But how do you get from start-up to scale-up? Scaling a business requires different skills than those needed to get it off the ground. Here are six key considerations for business leaders looking to transition.

What is the purpose of your company?

It’s important to understand why your business exists. Most people think it’s about money, but that’s rarely the real reason. While having financial security is important, there is a lot of research showing the limited effect of wealth on happiness.

A recent research conducted at the University of Bath examines the relationship between income and happiness. It seems that money can buy happiness to a certain extent and within specific circumstances. But in addition, the relationship between the two becomes much looser and more uncertain. There are many more factors to consider.

The only thing that really affects the happiness and therefore the success of a business is its purpose. It connects your team, provides structure and gives everyone a common drive towards shared goals. People who work in a company that has a meaningful purpose are happier and more productive, which gives a company a better chance of success and growth.

A recent study has shown that happy employees are 12% more productive then unfortunate ones. The same goes when it comes to engagement – ​​with companies with committed employees benefit from 21% higher profitability than those who are not involved.

Are you ready to make systemic changes?

Real changes required to move a company from start-up to scale-up can be messy, difficult and unpredictable – and business owners and leaders must be prepared for that.

It takes courage and a certain amount of risk to go to the next level – to be willing to take an honest look at how your business is run, what is good and what could be improved. Why do you work the way you work? Are your processes what they should be? Do you do things the same way you have always done them, or do you imitate others?

One of the most recent and significant systemic changes for UK businesses is the challenge of working time. Most work from Monday to Friday, in a cycle of 9am to 5pm. But the growing momentum of the four-day working week – which was finally adopted by Tyler Grange after a successful pilot – is challenging what has been the norm for decades. As a result, productivity and employee happiness have increased significantly and fatigue and absenteeism have decreased. But it doesn’t have to be a four-day week; it could be any work pattern that is more relevant to the way we live today.

So, what are your standard practices and do they need a shake-up? You really have to think about this, because changes in the workplace are happening at a dizzying pace. You must adapt or you will no longer be relevant and you will put your business at risk.

Are you committed to ESG and social impact?

ESG is not just a way for your company to become more efficient, access new markets and win new customers. It also plays an important role in shaping society and the way we live. So it is the responsibility of company founders and leaders to find ways to help the company thrive and doing so will go a long way in achieving their meaningful purpose.

Gone are the days when you could sit on the sidelines and leave the environment, society and governance to politicians. ESG is the new politics of business and employees, customers, suppliers and partners are all demanding that the business community takes it seriously.

Not having a strategy to deal with these questions makes recruiting, sales and purchasing much more difficult than it needs to be. Once developed and shared, it will create a sense of purpose that goes far beyond just financial gain; it provides companies with the security and ability to grow, no matter what obstacles come their way.

Do you attach equal importance to the physical and mental health of your employees?

The scale-ups that shift their thinking to how they can help their people thrive will see the biggest impact and return on their investments. As mental health becomes the defining issue for HR professionals nationally, addressing this issue head-on is critical for growth.

Almost one in five British adults have had to take time off work over the past year due to stress. A recent study found that this puts Britain at risk of becoming a ‘burnt-out nation’, and another states that work-related mental health problems have doubled and now cost the country’s businesses £118 billion a year.

Radical change is needed to combat this wave and we must take more effective action to protect those who are struggling. They should be at the heart of a company’s retention and rewards strategy and not carried out by enthusiastic HR departments with little experience.

I’m sorry, but first aiders and mental health wellness apps aren’t enough. Instead, employees need to be given real support and real initiatives that can make a difference to their mental wellbeing and improve their physical health, motivation, morale and productivity.

A growing number of companies are offering employees easy access to in-house psychologists and counselors – an investment that will pay off for years to come. And it’s not just the big companies. We appointed an in-house psychologist at Tyler Grange and reduced absenteeism by 70%. Let that sink in.

Taking care of employees can really boost your growth trajectory and bringing the same people along will help you reach your milestones much faster. It also means you can leave the day-to-day worries behind and get the strategic thinking time that is so essential to driving your business forward.

Failing to do this slows business growth and can even cause it to fail – with the problems typically starting with the founders. It is important to get the right advice from qualified professionals. Well-meaning support from amateurs can potentially do much more harm than good.

Is your company culture clearly defined?

It is incredibly important to document your culture. It provides our ultimate competitive advantage, and yet it is so often poorly defined. Far from being just another corporate buzzword, culture embodies the attitudes, behaviors and values ​​of everyone who works at a company, providing the strongest foundation for long-term success.

Ask yourself why you exist as a company and what you stand for? If you can’t answer these questions, how will your customers, new employees and suppliers know if you are the right person for them?

It’s much easier to run a business with a highly aligned culture, and if you succeed, it makes a business much easier to scale. As the famous management consultant Peter Drucker is often quoted. ‘Culture eats strategy for breakfast’. I think he’s right.

Does your business plan reflect the world around you?

We live in a dynamic and ever-changing world – a world where far-sighted planning moves you forward. However, make sure you don’t ignore the market around you.

Flexibility is really the key to success when scaling up. Thriving companies often start with a great idea, but are not afraid to deviate from the original plan. To quote another famous strategist, the German Field Marshal known as Moltke the Elder: “no plan survives first contact with the enemy.” In the business world, this means that once you write a plan, it is outdated and needs to be revised.

It’s important to realize that what you start may not be where the business ends up. So plan, but be prepared to change your proposition or product when necessary. Adjust your plan as you go – a strong direction of travel is much more important than a rigid route.

Tyler Grange employs more than 100 people across its seven-strong UK office network. It is a member of the Parliamentary Group for ESG, consisting of all partiesthe Better business network and supports the Better Business Act – all of which promote a cleaner, greener and fairer future for all.