Master These 2 Fundamentals to Scale Successfully

Scaling comes down to focus and differentiation

00:00Bill Gallagher: Have you ever had a week when you're completely slammed, but somehow nothing actually moved? Is this one of those weeks? That's not really a time problem. It's a busyness habit problem. My new book, Busy Is Broken: Do Less, Scale More, is all about growing by doing less, not more. Read or listen to a sample chapter over at busyisbroken.com. That's busyisbroken.com. It's also on Amazon and other booksellers.

00:27Bill Gallagher: Well, look, scaling—a lot of people have a lot of things to say about scaling, growing your business—but it really comes down to two things. Just two things are really fundamental and essential to scaling, growing your business. A lot of things support it, but it really comes down to these two things. Let me tell you a couple stories, good and bad, that contrast this. So both old clients of mine. One client—they did something really different, unique in the ad tech space, and they grew the company significantly by innovating, by differentiating. And they sold the company for a billion dollars. Billion dollar public company. And it got to a thousand employees. And they got really big for their britches at this point, you could say. Well, they didn't think about it at the time. And they hired a super—it wasn't enough just to do strategy with us. They then went to one of the biggest names in strategy work in Silicon Valley in technology, and a really famous name. I won't say them. I won't smear them here. But they did a 98-page strategy document for them. Very serious. Justified a huge, huge consulting fee. And they laid out these four fronts that the company would compete on.

A billion dollar company collapsed after defocusing

01:42Bill Gallagher: And the company proceeded to break up and staff groups around each of these things—not exactly divisions, but close to it. And then we continued to support them in the basic execution frameworks, the people skills, things like that, but not so much in the strategy anymore. Anyway, they faltered. Now they were trying to compete with a lot of much, much bigger companies, and they were trying to compete across four fronts instead of just one. So they thought, oh, now we're a public company with a thousand employees. We're a billion dollar business. We can open more fronts than one. Wrong. And it was painful and hard to see at the time. But here's the interesting thing: this 98-page strategy document had them defocusing, had them going from one to four fronts. Now the differentiation wasn't quite so clear. So the focus was missing, the clarity was missing, and the company was now fragmented.

02:43Bill Gallagher: Interestingly, almost nobody in the leadership teams read that 98-page document. People flipped through it, but 98 pages of business writing is a little dense. And mostly they saw what they wanted to—that they should open up more fronts and compete in more realms. And it all kind of went for naught. And eventually, after I stopped working with them, sometime later, the company was essentially sold off, parted out for $150 million. So from zero to a billion and then down to $150 million. Ouch, right? So they lost track of these two things in a significant way.

An audio tech company stayed focused and dominated globally

03:15Bill Gallagher: Let me tell you about another, maybe happier story. Started with a small company in the audio tech business. We've talked about them before. We featured them in the past in our shows and that kind of thing. We don't need to get into too much about them, but they started with a simple core idea. Like, we make something new, easier, better for everyone. And it really came down to that they made it easier, faster to develop audio-related products. And their core technology could be used in lots of different things, but they didn't deviate from that focus. What about audio products? Audio in, audio out. And they went from a handful of people and a small consulting kind of a business to the major number one player in their category around the world. And you'll find their technology embedded today in things like GoPro and BMW and Mercedes and Tesla and sound bars and on and on and on. All kinds of audio-related tech products today use their core technology within it. And the company got to be a very, very large company and dominant globally in their category, right? They stayed in their lane, they kept their focus, and they did something different. They provided and sold audio tools to a specific set of customers, right? They didn't go into all the other places that that core software might have worked. They just focused on that, and that made a big difference.

04:44Bill Gallagher: So there's a few things I think that are really, really useful in this. And it's useful to look at what's different about your business, right? We want to be meaningfully different, and we want to be focused. So there's a couple of different places that you could focus on. The most obvious one to focus on first is the customer. Who is your customer? What are the sets of customers that you cater to? And like, what one of them or common element could you focus on that really loves you, that needs you, that can pay you? Right? We don't want to just go to everyone that would give us money. We want to cater to and focus on the people that could really use us and value us and that we solve an important problem for. So what's a customer set that you're going to focus on? The next one—and not four, right? Like, one. And for a long, long time, one primary one. Even to a multi-billion dollar company, one primary customer type is probably a good idea. If other people want to buy it, good for them, but don't target them. Don't put time and energy into going after them.

Focus on one primary customer type

05:55Bill Gallagher: The next one is your product and service focus. So not every possible iteration of things—think about this. Like, so many companies do this. When Steve Jobs came back to Apple years and years and years ago, he took all the different things and he shut down the printers they were selling and the Apple Newton handheld device and a whole bunch of other things. And he just shut them down. He said, no, we're going to make a pro and a consumer product. We're going to make a laptop and a desktop. He cut down into a simple four-part product matrix, and that was that. And he focused everything in. So in your world, what's the product or service that you are providing that is the simple core of it, that makes you the money, that has the profit, that has the interest, that is compelling to people? Getting into just that and not fragmenting it out a million different ways is a really, really valuable thing. Fewer SKUs, right? Let's focus on the good ones. Let's sell off—if you've got lots of parts and that kind of thing, sell off the old ones. Focus on the ones that are working, the ones that are profitable, the ones that have real advantage, and let's get rid of all the rest, right? Your product or service ought to be focused on that core.

Steve Jobs cut Apple down to four products

Identify how you operate differently from competitors

07:13Bill Gallagher: And then the differentiation is the second one. So focus on either a customer and/or products and services, get narrowed, your focus in those areas. And now think about, who do you compete with and how are you different from them? So you compete with lots of people, right? Let's look across the board and let's get really crystal clear about differences in the way that you operate and not try to replace it. So, you know, there are other coaches in my world that do things differently, and good for them. And they find people that love that, that work with them. So I have coaches who are all about the numbers, and I have other coaches who are all about accountability and all about just the rigorous process of things. And I have coaches who are all about execution. And I have coaches who are all about just executive development or the transaction, right, dressing up your company for a sale. There are lots of people who do a lot of different things like this, right? And

08:14Bill Gallagher: I'm very much focused on the strategy and then getting the right people to do it and then putting in a layer of execution, but not overly focused on execution. Strategy and people first, and then the execution to support it. Right? And they're all different kinds of things. Like, you could find other coaches, and when I need other coaches to do things different than I do them, I will just give that work to them. I know who they are. You might even know who they are. Right? When I need somebody who needs that, I give it to them. And sometimes those people give things to me that are a better fit for my work and my approach. Same thing for you. So what is it that you do that is different and unique? How do you operate behind the scenes that's different from everybody else? Sometimes this is really hard to tell.

Use AI and outside perspectives to discover differentiation

09:04Bill Gallagher: So the way to figure out your differentiation, there's a few different ways. Here's the quick and dirty AI way. Say, please look at my company, type in your web address and blog or anything else like that. Please look at my competitor companies X, Y, and Z, and tell me how are we different? How do we compare? Many cases today, AI can look out at your public presence in the world and tell you how you compare from one to another company and give you the pros and cons of each. Really, really useful.

09:33Bill Gallagher: Also useful to ask people who have recently joined your company or even who are interviewing in your company who've come from competition. So somebody who's just been working for a competitor who's either applying now or who's recently joined your company has a unique outside perspective that can help you see what's different and special about your company that is very hard for you with your own perspective and point of view to do. And then finally, customers. Customers can tell you, especially ones that have worked with other people in the past or who are regularly getting pitched by other companies, they can tell you what's different about you and what's unique. The language, the specific terms and the things that other people say that AI tells you, that employees, new employees and applicants and customers tell you is much more useful than the terms and things that you would say or have been thinking about. Getting it in their language is much more credible.

10:34Bill Gallagher: So differentiation, we want to look outside. And for that, it really helps to get some other eyes and other ways of looking at it than your own. So focus and differentiation are the big things that make a difference in scaling. Now, yes, we want to execute. Yes, we want to get the people right. But the people and the execution include the focus and the differentiation. If you don't have a clear strategy, if you don't have a differentiated strategy, a focused strategy, then it's very hard to attract people. It's very hard to get people to want to work for your company. It's very hard to sell. And what are you even executing? So getting execution done before you've got your strategy set and focused and clearly differentiated, simplified, it's kind of not a lot of point to it yet.

Strategy must precede execution and hiring

11:23Bill Gallagher: So this is the critical thing. If you want to scale up, start to focus in on the profitable growth-oriented parts of the business, a certain kind of customer, certain products and services, not all of the ones that you have or could do, and then start to figure out how are you different? And especially from the perspective of people outside the company. Know how you're different so that you can lean in on that, not so that you can get away with it. So knowing that I'm not an accountability or execution-first kind of a coach, it doesn't mean that I go get rid of that. No, I lean in on the differences. I do that. So same for you. Start to think about where it is that you could lean in on and what could make a difference in your differentiation that you could play up, that you could emphasize, that you could double down on, that you could become the best in the world.

12:09Bill Gallagher: Anyway, I think that's a tried and true kind of thing again and again, after many years working with thousands of companies, the focus and the differentiation make a massive difference at the core of getting started and scaling up and then maintaining your growth over time really are about maintaining that focus and not losing the differentiation, the things that got you started.

12:33Bill Gallagher: I hope that's helpful for you. If you think it's helpful, if you'd like to be in a workshop or do something like that with me, do some more work, get some direct one-on-one time. I do those every month. You can find registration for them at scalingcoach.com. Can also, wherever you are right now, you can like, subscribe, get these every week. We do a show like this or an interview with an author, a guru, expert, a CEO, somebody about their growth journey. So we've got episodes with tips and stories from our clients, and then we've got them, I guess, on every week. There's more than 600 now wherever you're getting this. Or you can go to scalingcoach.com, where in addition to all those shows, you can also sign up for one of our workshops or look into our coaching programs and so on.

13:16Bill Gallagher: As always, big shout and thanks to my friend and mentor, Verne Harnish, who created the whole Scaling Up framework that's at the core of our work. And then to the folks at Storion who get our show produced and ready and out the door every week now for years on end. Thanks again to Storion. Thanks to you for watching, for listening. I hope that's helpful for you. Keep scaling.

13:38Bill Gallagher: Thanks for listening today. One last thing. If anything in this episode hit home, my book digs into it further. Busy is Broken. Do Less. Scale More. It's all about how to stop drowning in work and build a business and a team that scales without you. Available right now with content samples at busyisbroken.com. Go grab it. Be less busy.