The Six Cardinal Rules of Scale

Hi! We’re back with more MEND Method this week, and in this edition, we’re reviewing the Six Cardinal Rules of Scale. For us to get the most out of the framework, we need to review the “rules of order” that form the foundation of our work together. These six rules are true to all businesses, no matter their size or structure, and we will use them in the future as we assess trade-offs during your planning.

RULE 1: YOU MUST MEND YOUR STRUCTURE TO SCALE YOUR BUSINESS

What got you to where you are is not going to get you to where you want to go next. There are real issues in your business. The structure is misaligned. Processes are broken. People are incorrectly placed. It is a natural by-product of a growth at all costs mindset, and that was fine for getting you the momentum you needed. But, unless you mend what is broken, you simply cannot scale effectively. You must MEND to SCALE.

RULE 2: STRUCTURE AND PROCESS BEAT STRATEGY EVERY SINGLE TIME

I know what you’re thinking. Structure and process can’t exist without Strategy, and that’s true, but you most likely already have a strategy in place if you are able to generate annual recurring revenue. With that said, using your energy to design a structure that fits the state of the business life-cycle you’re in and to optimize your business processes to flow with expediency and excellence will yield the highest ROI for you and your business. 

Think about it. How many off-site strategy sessions have you been in that yielded a lot of pie in the sky aspirations but a big fat zero in terms of implementation? Now what if you had gone into that Strategy off-site with a structure for capturing those aspirations and processes for prioritizing, implementing, and measuring them? BINGO!

RULE 3: PEOPLE GET PLACED LAST

Look. I know this seems weird, so what gives? 

You’re a leader, and if you were drawn to my energy, it means you’re a leader who puts their people first, so you can take the time to confirm everything you think you know about them. This will give your unconscious mind some relief and free up your energy to focus on getting the right structure in place. 

Once you know the structure of your business and the flow of each of the MEND components within that structure, you can actually match your people to these new functions and roles. If we don’t give your unconscious mind that relief, though,  there will always be something that feels ‘off’ about what we’re doing together, and you will intuitively begin to design your new plan putting your people first. Doing this will result in failure. 

Here’s the hierarchy: Framework >>Strategy>> Structure>> Roles >>People = The Plan.

RULE 4: MANAGE THE ENERGY PENDULUM

As you make the transition from growth to scale, there are going to be trade-offs as it relates to the dimensional energy between functions. For example, efficient versus effective, long range vs short range, etc. There is a pendulum effect that exists between these dimensions, and part of your role as leader is to manage the pendulum itself (which is resistance to change) so that it’s not swinging wildly in one direction or the other.

RULE 5: YOU HAVE A FINITE AMOUNT OF TIME AND ENERGY OVER THE LIFESPAN OF YOUR BUSINESS

I know what the woo woo says. “You are an ever-evolving, immortal energy being, and as a result, your energy is boundless.” And I know what science says. “Hey! The average life expectancy of a human in the US is 77.28 years”. But what about the average lifespan of a business? Dismal. Only 25% make it to 15 years. For S&P 500 Companies, the life expectancy has fallen from 61 years in 1958 to less than 18 years in 2022. You aren’t Dr. Who and you don’t own a Tardis. There is only now and your energy is finite, so what you design has to take these constraints into consideration.

RULE 6: MENDING YOUR BUSINESS IS AN ONGOING PROCESS

As you scale, you are going to be faced with differing realities at each stage. These new realities require you to analyze and shift your structure as needed over the entire lifespan of your business. 

That’s it. Six Cardinal Rules. Think about your business - where you are now, and where you want to go. Are you breaking any of these seven rules? Are you trying to scale over a broken structure? Are you putting your people first, even though the needs of the function might have outpaced their skill set? Are you living on borrowed time? Take stock now, and come back next week as we explore MEND in deeper detail.

TL/DR:

1. There are six cardinal rules that apply to all businesses when it comes to scale

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We’ll be back next Thursday with another edition! Until then, feel free to reach out by DM here on LinkedIn!