Scalable growth is growth that can be scaled and sustained without negatively impacting your quality of service. Achieving it requires building your institution to simplify operations and prioritize scalability. Of all the challenges you'll face when running an agency, few are as daunting as scaling . The agency model actively resists scaling. The resource on which your growth depends—people—is neither scalable nor replaceable. You can't add 10 designers and expect a 10x increase in the number of designs, at least not in any predictable way. However, scalable growth remains the pursuit and goal of most institutions. Scalable growth is just scalable growth . It's sustainable, scalable and predictable without any impact on your creative output. What can you do to foster scalable growth in your people-centric services business? Are there any processes, systems and best practices you can adopt to help you scale? In this guide, I'll look at the fundamentals of scalability and show you how to structure your agency for scalable growth.

What does "scalable growth" really mean? Are growth and expansion the same thing? In an HBR article, Ron Carucci has a clear answer: don't confuse growth with scaling . He writes: "Growth means increasing revenue while adding resources; scaling means increasing revenue at a higher rate than cost." The defining feature of growth is its unsustainability. It usually comes from unscalable sources - one-time events, random hits, lucky referrals. Even if it comes from a scalable source, growth often collapses industry mailing list its own pressure. For example, adding more people to serve more customers initially seems sustainable. But as you continue to add more people, you also create more management problems. As teams grow in size, productivity drops and collaboration suffers. One designer can serve four clients earlier. Now, he can barely serve three. As a result, growth that initially seemed sustainable could not be scaled. In fact, one analysis of small firms even found that firm size was inversely related to productivity. This is the key difference between growth and scalable growth .

Scalable growth is built on an organizational foundation that can expand as it grows. It has systems, processes, and standardized practices to address productivity, communication, and management issues that arise from scaling. In other words, scalable growth applies to organizations built to scale. Why "Building to Scale" Matters Scale is usually a basic tenet of most businesses. A software company designs its product to accommodate thousands of concurrent users. Manufacturing companies build factories that can be mass-produced. Retailers' profits depend on achieving scale to get better deals. It could even be argued that for many businesses, profitability depends on achieving scale. Uber, Amazon, Walmart, and others rely on their scale to turn small profits into huge ones. Agency business is different. Your profitability doesn't depend on the scale of achievement. An agency can have the same profit margin as 100 employees with one employee. With low start-up costs, agencies can even be profitable from day one. Minus this pressure to scale, agencies often fall into the trap of ignoring scalability entirely. They did not document their processes and neglected to operate their systems. Often, they are overly reliant on unpredictable revenue channels, such as referrals. This may be sustainable for small institutions.

But as you grow and add more people, the lack of systematization can affect your growth potential. You generate too much data, have too many different processes, and have little visibility into your agency operations. Once you get beyond the proverbial "two-pizza team", communication becomes an issue. Teams start operating in silos, inadvertently locking in knowledge. When you build to scale, you can extract more from resources. Your processes are clear, deliverables are standardized, and data is defragmented. Your entire agency operates more cohesively and efficiently. But perhaps the biggest reason to focus on scale is that it allows you to focus on being creative and serving customers.​​​ When you have lean systems, less time is wasted by your resources dealing with business operations. Instead of digging through data or looking for templates, they can focus on delivering results. In the next section, I discuss the barriers to scaling and how to address them. What are the main challenges for scalable growth? Robert Sutton, a professor of management science and engineering at Stanford University, noted: "The scaling challenge almost always boils down to the same problem: It's hard to spread good stuff from those who have it to those who don't -- or at least not yet." Sutton calls the expansion “more questions”—more data, more systematization, and more knowledge sharing.