SCALE Your Business to New Heights with THIS Shift!

Speaker A: My name is Brendan McGurgan. I am um, the director and co founder of a company called Simple Scaling. Our vision is to inspire, connect and enable millions of ambitious leaders of small and medium sized enterprises to scale with purpose. And our own purpose is actually to free leaders from business limiting fears. We might get into some of that today.

Speaker B: Absolutely, absolutely. And I want to start with your book. Tell us a bit about that.

Speaker A: The book, yeah, the title is Simple Scaling Xfield. So this is 10 proven principles to 10 ax your business. We published this actually back in March 2022 after spending almost three years researching and writing following uh, our own experience, myself and my co founder Claire, my co founder of Simple Scaling. We had spent, I'd certainly spent 13 years as the CEO of a small and medium sized scale up. We scaled that business from, from 15 people in northern Ireland to a company that expanded across six continents. We opened up offices across those six continents and had a team of almost 700 people scaling revenues from 3 million to, to over 100 million and exporting our products and services to more than 100 the globe. So I thought whenever I was in the bubble of all things scaling that every small to medium sized enterprise was of course doing this. What I found whenever I retired from the business back in 2019, that less than 1% of small and medium sized enterprises actually achieve scale. And I thought that was really sad that those leaders who harbor a level of ambition, and certainly their team members that harbor a level of ambition, fail to achieve scale. And as I mentioned at the outset, I spent a number of years researching why that was the case, interviewing scaling leaders across the globe, leaders from the likes of companies that your listeners will be familiar with. Gymshark, for example, skyscanner, an app that we use every day for our travel requirements and um, leaning and harvesting our own experience as well to actually define a guide. To create a guide, a roadmap if you will, for scaling a business. So we define 10 principles, we enshrined those in our 10 principles scale X framework and essentially created a manual for scaling, which I never had. Lisa Whenever I was the CEO of Scaling Business, my background's in finance. I came to the CEO position with no previous experience of leading a uh, scaling business. And actually whenever I came to the role, scaling wasn't a thing back then. Scaling has only come into our business lexicon in the last really 10, 12 years. So it wasn't thing back then. I didn't have this guide, this roadmap and I wanted to create it essentially a handbook for scaling so that's what we created and off the back of the success of the book we created our own 12 month Scalex accelerator program. A program to coach leaders of small and medium sized enterprises in the principles and help them in their ambition to scale.

Speaker B: Okay, so I want to get into the framework, but just before we do, what is from your experience, the number one reason that businesses don't scale?

Speaker A: That's a great question, the reason why they don't scale. And I, I will caveat this based on the fact that I'm assuming at this stage they are a small to medium sized enterprise. So they're delivering revenues of let's say a million pounds maybe you know, you guys euros, a million euro, have a team of about 15 people. So they're, they've moved beyond this startup phase. They have proven the product market fit, they have delivered significant value by way of a million pounds or a million euro in revenue and exchange of value at ah, this stage. The primary reason why companies don't scale is the leader themselves, the leader's psyche. What do we mean by that? Essentially the company will never scale beyond the psyche, the identity, the mindset of the leader. What we found is actually limited ambition is cited as the single greatest impediment as to why companies small to medium sized enterprise don't achieve scale. And what is ambition? Ambition is a mindset. And when we lift the lid on why do SME leaders limit themselves in the context of their skilling ambition, there's two reasons. One is ignorance, so they don't know how. And this is why we have created the book, we've created the manual, we've created the roadmap, the how to guide. And the other is actually more sinister. It's, it's unchallenged limiting beliefs. It's fears that the leaders hold. Fear of failure, fear of letting go, fear of change, fear of judgment that coalesce to actually impede the leader from, from their harbored desire to scale the business. No, we will, we will couch it in all sorts of things like you know, I can't get the people, the markets aren't great at the moment, I can't get the capital. And um, these are, these are tangible reasons why companies struggle or are challenged to scale. But the primary reason to go back to your question is the psyche of the leader.

Speaker B: Interesting, interesting. Because I mean if you look at leaders of those businesses as you described, I would typically describe them as very ambitious, very go getter, very aim for the sky kind of people.

Speaker A: Yeah. So, and um, this is We've, this is where it becomes interesting. We have defined four stereotypes of small and medium sized enterprise leaders. So the first one is the graduate and the graduate is the person who has graduated, let's say from startup school to scale up school. So they're right at the start of this journey. Now what characterizes these leaders is hubris. It's this, you know, we can do anything attitude. You know, we're all in this together. They've got their finger on everything. They know everyone within the business, it's a small team, they know everything that's going on. They have been hustling, hustling to get to this point and they think what got them to here is going to get them to there. So their psyche catches these leaders out on the basis that they feel that actually they don't need to change. They can continue to do what they've done from startup to graduating to the beginning of scaling up. And as we know, scaling is a, there is, isn't a big, isn't a grown up startup. It's a very, very different entity and requires a different level of leadership and it requires letting go, it requires change. And these leaders typically have a level of hubris feel that they're untouchable. Look at the success that they've enjoyed to date. Probably raised a lot of money, you know, have customers now bank full of capital and they think that what they've been doing has been working. So why, why would they change it? So that's the graduate. Then we have the comfort warrior. So this is the small medium sized enterprise leader who has achieved a certain level of success and they have enjoyed a certain level of status and standing now from their peers and maybe in the local community and they've got a certain standard of living. They don't want to do anything that would potentially disrupt that. So they get stuck in their comfort zone. They do not want to scale because they fear failure, they fear judgment if they do potentially feel. And um, they, they, they harbor this desire to continue to grow but they don't want to risk what they already have, so they stay stuck. Then we have the shadow leader. The shadow leader is typically second generation leaders and they're typically male and they're typically the sons of founding fathers. And um, they have the title of CEO or managing director but their founding father is still in the business and they're operating under the shadow of this founding father. So they have the title but they don't. They're not really empowered to actually scale this business in line with their vision. And their desire for where they would like to see this company go. They also feel obligated to fulfill the wishes of the founding leader. And um, they're fearful of actually messing up. They fear failure most m more than any of the other leaders because actually their father has created something here and they feel obligated to actually keep it intact. And then we have the dead man walking. The dead man walking has essentially created a business for themselves. They have left their previous employment because they wanted a level of freedom. They wanted to, to earn more money. They wanted time to enjoy all of the things that is perceived that as benefits from actually running your own business. And they've created this business for themselves that is actually imprisoning them. They have their fingers on every single aspect of the business. They're control freaks. They cannot let go. And their fear really is the letting go. They struggle to delegate. So whilst we say yeah, but you know, it doesn't seem that these SME leaders lack ambition. And you're right, but actually it's more, it's, it's more sinister in relation to the psyche of these leaders. And um, the psyche is, is impeding the potential for the business in different ways across these four stereotypes.

Speaker B: Mhm. I feel like we could chat to you for days on the subject.

Speaker A: This is why we host a 12 month program.

Speaker B: Absolutely. I would like people to read your book. So don't give us all 10, but what are the top three things to implement in order to be able to scale?

Speaker A: Uh, I'll give you a very quick overview and then we'll dive a little bit deeper into those which I feel are critically important in terms of let's say getting your ship, your scaling ship away from the harbor. So the very first principle is psyche we've touched on. Then we get into purpose and vision, then people, then uh, planning, process, performance, proposition, place, partnership. And the entire scalax framework is held together with the keystone principle, which is the tenth principle, which is positive growth, culture, all Ps which you'll have gathered. Uh, so once the leader becomes aware of their own psyche, and this is why it's so important we say scaling happens from the inside out. This scaling leader must become aware of their own psyche to begin with. They must harbor a significant belief that actually they can achieve something significant. They must have a level of control in terms of being able to respond to difficult situations rather than reacting constantly. They must be disciplined in the context of their rituals, their practices, the routines which are going to undergird that strong psyche. And they must create an environment for themselves that is actually conducive to scaling. So get themselves into an environment where there are other peers who have actually achieved scaling. So they're literally pressing flesh with people who have been there and done it and are going to actually encourage them to continue to do what they want to do. Uh, the purpose and vision, the second principle is so critically important. So ultimately the leader must have clarity in where they want to go. So you know, if I'm going on a holiday and I say to my, to my wife, let's go on a holiday, the next question she'll ask me is, well, where are we going now? How many leaders can actually answer that question? Because what happens is they get caught up in the activity trap of the day to day without actually standing back and um, clarifying where it is they actually want to go. If back to the holiday analogy, I'm based in Ireland, you know, if I say, well, let's go on holiday, and uh, my wife says, well, where will we go? I said, well, let's go to North America now that. And uh, let's go to New York in July. That's going to require me to pack different clothing than if I was going to New York in December. It's also going to require me to think about actually getting a visa organized, getting dollars organized. That's a different propos from going to Germany in April, where now it's a shorter trip. I don't have to think of dollars, I have to think of euros, and I don't have to think about getting a visa. So just that simple analogy around a holiday creates lots of questions which have to be answered, which ultimately feed into then a plan in terms of that trip. But actually, how many leaders have that clarity in terms of the destination of travel, their North Star, where they want to land, what does this business look like in terms of its size, its customer base, its employee numbers, its revenues, what people are saying about it in 10 years time, what does that look like nearer term, in three years time, what does it look like in one year's time? So ultimately, the vision of the leader will inform everything. That direction will form their action today so that ultimately they stay on path. So the clarity of vision anchored in a purpose and a strong understanding of why are you doing what you're doing? Because ultimately vision by itself just becomes a distracting illusion. Who has it said? Edward Abbey, the environmentalist said that growth for growth's sake is the ideology of a cancer cell. So ultimately, this concept and embedding this concept of scaling with Purpose, having a clear understanding of why you're doing what you're doing. What positive impact are you going to make on your team, on your organization, on your community, on your customers, your suppliers, all stakeholders involved in this business? Why are you doing what you're doing? You say, well, just to get rich. Well, then that becomes very hollow and you're unlike to attract. What is the third principle, which is people. Great people want to step in to an organization whose vision and whose goals are greater than their own. Ultimately, great people want to expand themselves and they can only do that in organizations that have an expansive vision. But they also want clarity of purpose. They want to attach themselves to something that's meaningful, not simply to go into an organization where their work is getting the owner, the founder, the leaders rich. That becomes then just a transactional relationship. And what ultimately, in the context of the third principle, the people principle, what you want to do is not just get people's hands by virtue of paying them for a 9 to 540 hour week on a transactional basis, but you want to get their hearts. And ultimately when you get your heart, their hearts, people will go through a brick wall for you. So the first three principles, which are aligned to what we call our inspire theme, you must first of all be inspired yourself in the context of what you're trying to do and why you're trying to do it. Where are you going? Why are you going there? And when you're inspired, then you'll inspire others, um, to support you in achieving what you're trying to do.

Speaker B: Okay, this all makes perfect sense and I love the framework. And while you're talking, it's bringing up a ton of questions which I know we don't have time for. I want to throw the proverbial spanner in the works, which is, how does all of this look in the world of AI? And as fast as things are changing, how does that impact this framework?

Speaker A: So if we take the fifth principle, the fifth principle is about processes. So ultimately, processes and systems will set you free. So I go back to a wonderful quote from Michael Gerber, who wrote the incredible book, the wonderful book e Myth, who said that if you have a business and that business is dependent on you, then you don't have a business, you have a job. And, um, it's the worst job in the world because you're actually working for a lunatic. So just let that, uh, digest for a moment. Ultimately, what AI will allow us to do is to create processes and systems. I use AI myself for researching, for example, the podcast Guests that have come on to Scalax Insider, which I host, it's a wonderful tool to do that. What AI will actually allow us to

Speaker B: do is

Speaker A: systematize mundane tasks which will actually free up the potential, the creative potential within our people to help us scale. So the greatest waste in any business, people who are listening to this will be familiar, likely familiar with the concept of lean, which is about removing waste within the business. The greatest waste within any business is the waste, uh, of unlocked potential within our people. The latest Gallup poll suggests that more than 70% of people are actually disengaged from what they're doing. So if you think of the waste of potential that lies within those disengaged people because they're not doing work that inspires them, they're probably doing mundane tasks that can be served by artificial intelligence and that will free these people to actually lean into their unique ability to ultimately serve and support the leader's vision for this business.

Speaker B: A lot of what you talk about is about freedom. You talk about freedom in terms of the entrepreneur from their own, um, taken beliefs. You talk about freedom from work that can be done more efficiently. How have you experienced this in your own life?

Speaker A: Well, ultimately I've arrived at a point and I've been very fortunate to do this given the success of the previous business, to not have to do what I'm currently doing. So everything that I'm doing, I've been free to do it. I've reached a point where I have freedom of time, freedom of money, freedom of purpose, freedom of relationships. So simple scaling, a company that we, that we created, Claire and I back in, in 2020 is us living out our dream to bring our experience of scaling to the other 99% of small and medium sized enterprises who are not achieving scale. Not achieving scaling. We literally started with a blank sheet. I used the little Ikigai framework, you know, what are you good at? What does the world need? What are you passionate about? And what can you get paid for? And at the intersection of those four questions, you arrive at your own purpose, your own meaning in life. And ultimately we created an organization that gives us incredible meaning. We have built the team around us, people that I love working with on a day to day basis. I don't have to work with them, I choose to work with them. And they're brilliant people. We get to choose who comes into our Scalex accelerator program. Again, I don't have to spend time with these people. I choose to spend time with these people and they are incredible. You will not get better people than the leaders of small and medium sized enterprises. They are vulnerable, they're authentic, they are ambitious, they have fears, they want, they're humble, they're learned, they're just incredibly energizing to be around. We get to spend every day with those kind of people and ultimately we get to share in the value of their success. So simple scaling in its current guise is ticking every box for me again. I had never hosted a podcast before, never thought that I would ever host a podcast. We're now almost 150 episodes in. I've interviewed some of the brightest and best brains on the planet and all things scaling. It's given me the opportunity to do that. Never thought I would write a book. We wrote a book. So, you know, the business is giving me as an entrepreneur, an opportunity to live out my dream in service of others.

Speaker B: Amazing. And I can testify to your podcast because I have listened to a few episodes and can highly recommend to us.

Speaker A: Thank you.

Speaker B: They do the same and we will share it.

Speaker A: Brilliant.

Speaker B: Um, so please read Brendan's book, Simple Scaling and listen to the Scale X Insider podcast. Your parting thought for businesses and entrepreneurs who want to scale.

Speaker A: Examine why you want to scale. Really dig deep in that. Why? Go down a couple of layers because the more you understand the reasons why you want to do this, ultimately when you encounter challenges in your scaling journey, you've got this repository of deep, meaningful deposits which you can cash in on those dark days and those rainy days in November when you're questioning, why the hell are you doing this? So understand your why. But what I would say is do this. You have one life. What scaling will ultimately teach you is more about yourself than anything else that you will achieve in terms of the maybe the material trappings which scaling success will ultimately deliver for you, but the journey will teach you more about yourself than you could ever get from any coach. And, um, ultimately, what you're doing as an SME leader, if you do not scale, you're denying yourself an opportunity to personally grow. You're denying a team of wonderful people an opportunity to grow. You're denying the organization this opportunity to grow. You're denying the community, the society and economy at large to benefit from your ambition. So I would appeal to leaders listening to this that if you have already got a wonderful product or service, then you have an obligation to scale.

Speaker B: I love that you have an obligation scale. Thank you, Brandon.