The riddle – how to scale and when to scale and why?

According to one of the legends about Oedipus, King of Thebes, when he returned to his homeland, he was confronted by a Sphinx which ruled in terror over the city. The Sphinx put a riddle to all passers-by and destroyed those who could not answer correctly. Oedipus solved the riddle of the Sphinx, which then killed itself, enabling him to take the throne. The riddle was this: “What goes on four legs in the morning, two legs at midday, and three legs in the evening?”

What, you might ask, has the Sphinx’s riddle what to do with scaling your business? Nothing and everything.

Whether you recognise it or not, we live amid a series of currents which flow around us and through us every moment of every day. Some of these currents, once they have been studied follow a discernible pattern and trend, whilst for others, though we experience them, these patterns elude us.

In my world, I refer to these currents, as “Cycles”. We are familiar with the cycles of the years, as they pass and the seasons; economic and market cycles; equity and bond market cycles - bulls and bears; we are also familiar with the accounting and regulatory reporting cycles with which our businesses are tasked as part of the overhead of doing business.

Yet, there is another cycle which governs how our sentiments change that is seldom observed, which has a crucial effect in how each of us makes personal and business choices over time, and governs the development of all business enterprises, small and large, and affects the feelings of those leading them as well as all those who work in them.

Cast your mind back to the day you started your business - if you were the founder, and if not, the day you joined your last employer. Can you recall the feelings that were flowing through your body and the prevailing sentiments that affected your perceptions at that time? How excited were you? How long did those feelings last? When and why did they change to something else and can you recall the next prevailing sentiment that replaced it?

For all sentient beings our perceptions are coloured by our feelings. You've heard the expression "wearing rose tinted spectacles” - this is what it denotes. Some of these shifts in sentiment influence our behaviours and choices in a positive way, as when someone lands their first big sale in six figures or their six figure promotion; others take us down, as when we have celebrated our new riches too well and suddenly realise that we've spent too much. We then crash out of our elation to feel frustrated with ourselves and everyone else.

For example, I recall working with a PR firm which had a lion for its logo. The MD commissioned an expensive steel lion sculpture for the company's roof garden as a demonstration of its achievements. Soon afterwards, his mood and the mood of the whole firm changed to one of cost cutting and frustration, and he sold the company soon after as a distress sale to a large advertising agency.

Learning to read the cycles of sentiments provides an invaluable management tool for leaders to read the mood contours of the road ahead of them much like a GPS. Also, as a GPS, it can guide business leaders in what to do, when and when not to act as well as how to manage critical decisions on the business journey. Once you can recognise where you are its easier to plan for the road ahead.

To close the loop then, I contend that learning to read the sentiment cycles alongside macro and microeconomic cycles, etc, will often indicate when is best to scale your business and when not. Combine this knowledge with the critical techniques I have described previously to scale up or indeed, to scale back your business and they can serve to optimize your strategic planning and provide the confidence that you are doing the right things at the right time when you scale up.

Oh! And by the way, or those of you who are still puzzling at the Sphinx’s riddle, the answer is “Man” and equally “Woman”.

I will discuss and expand on the topics covered in this series of three articles on scaleup in a workshop to be held over Zoom on Tuesday 30th May at 14.00 BST. To join the workshop please book your place via Eventbrite https://www.eventbrite.co.uk/e/scale-up-your-business-which-techniques-create-most-roi-and-why-tickets-636398012587