As companies grow revenue, they also need to massively scale their teams to support their growth. Some organizations attempt to leverage the same processes and tools they used to initially scale team size, but these often don’t enable them to hit their new accelerated growth goals.
To continue to successfully scale their team members, companies must assess their scaling readiness and build an organization-wide scaling strategy for talent to ensure fast, sustainable growth.
What exactly is “scaling readiness”? At a high level, scaling readiness is the capability of an organization to rapidly ingest headcount without building financial, cultural, or operational debt. You can assess scaling readiness at any time, but it is most commonly done during the annual headcount planning process or milestone events like fundraising or acquisitions.
Assessing your organization’s scaling readiness not only helps prepare your organization for rapid growth but coalesces the executive and HR teams around a defined strategy. This then enables the HR team to identify and modify the tools that will help them deliver on this strategy and support the company’s long-term growth.
Here are five key considerations to help you prepare your organization to scale:
- Evaluate your position in the marketplace. It is important to understand your local market and competitors to better differentiate your company to candidates. This includes codifying your compensation philosophy and general offerings, as well as your company culture, values, and operating experiences compared to the market standards and your competitors. By differentiating your offering to candidates, you can make sure that candidates are excited and attracted to your company.
- Consider your company’s future state. When growing rapidly, it’s important to consider where the company will be in 6, 12, 18 months, etc., to ensure you are not just building teams based on today’s needs, but also taking your future growth into consideration. The type of leaders you will need, and the scope of each role will change drastically depending on your company’s evolving size and goals. By defining your future state, you can more clearly align more tactical elements of your scaling strategy like leadership leveling, role scope, compensation, and equity. Scaling without considering your future organizational state leads to internal competition, unclear reporting relationships, and drastic misalignments in leadership role scope.
- Determine your candidate's value proposition. It can be hard to compete for top talent, which is why identifying and communicating your candidate value proposition is a must to win the best talent. Your candidates should be able to clearly understand why they should join your organization and what value you will bring to their immediate and future career growth, or you risk being unable to attract and retain top talent.
- Ensure you have the right infrastructure in place to support your company as it scales. The first three steps above focus on defining your scaling blueprint to make sure your executive team is aligned with your HR team on its scaling goals and objectives. Once that’s defined, however, you will also need to establish your scaling toolkit to ensure you have the necessary HR frameworks in place to support rapid growth. These tools are used by executives, recruiters, and hiring managers to operationalize your scaling blueprint. Such tools include, but are not limited to, establishing:
- A leveling framework, which aims to balance today’s market position with the intended future state of your organization. Ultimately, the leveling framework helps to manage employee expectations about their current role and their expectations for future growth.
- A compensation framework to define cash, equity, commission, and bonus structures to employees based on the business’s desired market position. A well-thought-out framework provides equitable compensation across job families so that the intended level remains consistent regardless of pay. The compensation framework often will need to be reevaluated as growth milestones are achieved to ensure they stay relevant. Companies without an up-to-date leveling and compensation framework or none at all often have a high variance in pay and title for similar responsibilities. This creates significant cultural debt during performance reviews among the employee population and can lead to discrimination lawsuits.
- Organizational charts (org charts) to visually outline your company structure. Org charts can help you monitor scope increases, individual contributor-to-manager ratios, as well as map departmental divisions as they reach the critical scale where they need more specialized teams. They are also a great tool to help identify any secondary support staff that may be required to efficiently and cost-effectively scale (i.e., sales support, operational teams, facilities).
- A unified headcount plan to consolidate your intended growth plans into a singular view (this includes company size, location, timing, cost), so your HR team can effectively service this demand. It also provides insight into your recruiting organization’s readiness to meet the business’s future needs, as well as establish greater accountability by leveraging data to enhance your talent acquisition process through periods of high growth. Without a singular, unified plan, companies often miss their hiring targets, overspend on agencies, and/or lack the focus to hire the right roles at the right time.
- Configured HR systems to securely store and organize the data that helps inform decisions on market position, candidate quality, and hiring team efficiencies. The systems used to scale headcount should reflect the expectations set by the company’s market position. A top market position company requires robust HR systems to deliver the quality of HR services that are expected internally and externally by employees and candidates. Without the proper HR systems in place, your organization's ability to make data-driven HR decisions will be challenging at best and can often create a risky blind spot for your company as it scales.
- Communicate and measure your progress against your scaling strategy. Framework development and execution is a delicate subject and requires strategic, planned communication to manage expectations of these changes. Overcoming objections surrounding the need for change and its importance to the company culture requires clear communications and an open-door policy. Beyond communicating any planned changes, HR teams also need to ensure they are measuring their progress against their scaling strategy. HR teams need to first identify what metrics are measures of success and then second, ensure they have the right systems in place to track these metrics over time. Without consistent measurement, HR teams lack accountability and risk missing key scaling milestones.
Companies must define their scaling strategy – and early – to ensure their company is in fact ready to undergo rapid growth. Those that don’t often are unable to maintain their company culture, mission, and value proposition, or even continue to attract or retain top talent as they scale.
With these strategies and frameworks in place, the company culture can take shape and make it easier for future HR leaders to build upon this strong, sustainable foundation versus spending their time fixing common – and often avoidable – issues that may arise as the organization scales.
If you are interested in engaging Unicorn Talent to help assess your organization’s scaling readiness, please contact Tish Pauley (email@example.com).