To Grow My Company or Not Grow My Company—that is the Question!
Many entrepreneurs wrestle with whether or not they should grow the size of their company. Maybe size isn’t necessarily the answer. Traci and Rob discuss how sometimes growth leads to increasing size and scale, and sometimes it is about improvement and development. Most importantly, there are many questions you need to think about before trying to scale your company.
Transcript
Announcer:
Welcome to the Overly Human podcast where we discuss all things human in the workplace. Because it's not just business—it's personal too.
Rob:
Hey! Welcome back to the Overly Human podcast with Rob Harr and Traci Barrett.
Today we're going to talk about how to deal with growth with a focus on the humans involved, the people on your company and how it impacts them. But before we get started, how are you Traci?
Traci:
I'm doing well. Yes, excited about this topic. It's a hot topic right now. People trying to get behind how to grow, why to grow, how it affects the company, what they're really desiring. I think this is pretty current hot topic for us to dig into today.
Rob:
Yes, I think so too. At a recent event I was at, one of the questions that came up is, "Well, what does growth even mean? Is that a head count thing? Is it a size of project? Is it an impact piece? Is that a number of people? Is it revenue?" What aspect that exactly people wanted to talk about and there wasn't just consensus on what people's goals were. I thought that was pretty interesting.
Traci:
Yes, it is interesting, and it definitely leads you to start thinking about should we grow just for growth's sake? And if we talk about growth, let's define what we mean by growth. Especially when we're talking to our employees. Typically we want it to mean about improvement and development, and sometimes people's minds immediately go to size and scale, but that doesn't always necessarily need to be the case. So defining growth is extremely important when we're communicating to our staff and just talking about it amongst ourselves as leaders.
Rob:
Yes. We need to figure out what that means to us and unpack that word to the people we're communicating with. So I guess to start with, why? Why do you think, why grow? What is it for a company that moves them to do that?
Traci:
Well, typically what moves companies to grow is a desire for increased profit, just more revenue. And what I like to remind owners to think about is, remember that profit is just a percentage of your overall revenue, right? So 20% profit of a $10 million company is the same as 2% profit of $100 million company, right? That profit doesn't necessarily grow just because you grow your revenue. So you have to be extremely strategic when you talk about growth and wanting to grow.
Some companies just naturally grow and it happens because you're a winning business, and you're good at what you do, and your reputation really gets out there and you grow. And you have to handle that growth. It's not something that you necessarily completely planned for. But other companies really go into the process of, "Hey, we want to cast a vision out there. We want to put some goals against it. We really want to grow in size and in scale." And so before you do that, I think it's great, but you need to figure out the why behind it before you start putting together the pieces of the how.
Rob:
Yes, the motivations behind it.
Traci:
Exactly.
Rob:
Yes. I think that gets right at the impact that we can have by growth. I think one of the things that is really interesting for me on this particular topic is there was a moment, it was about four years ago, I had become convinced we had reached the perfect size and that like, "No, no, we've arrived. This is it for us." I remember saying that and having this conversation with Wil Reynolds, owner of Seer Interactive, who's become a good buddy of mine over the years. And he challenged me in such a way that made me rethink the whole thing. One of the things that he said, his mission was to have an impact on more people's lives, that he felt by hiring more staff and treating them right, that he could have a bigger impact on the world.
It really made me sit back and think about, by not growing, are we being selfish? What is this, what is the reason for us? I'm a big believer in this whole idea of wanting and prioritizing people and their families and all of that by hiring more people and doing good work and inspiring a web built right, we talked about goals and all that stuff last time we chatted. But we could have a bigger impact by having more people, and that was a profound moment for me and I'm not even sure why completely.
Traci:
Well, it was probably a profound moment for you because it connected with you on a deep level. What he was saying was basically a purpose statement. He had identified his purpose as a leader and he sounds very connected to that. So that for him is a reason for growth, and I think you have a pretty similar makeup and I can see that purpose statement connecting with you. Not every owner has that in them, and then some owners have other purpose statements or others why's woven into their leadership. But I think to be able to say that, "I want to have a greater impact on more lives.", is a beautiful thing. It more than likely fits with Wil's DNA and who he is. When it does, you really can't live out of that.
I think everybody has a personal mission statement that they need to identify and as leaders and owners, if you can identify what that is and live out of it, you can have a positive impact on people. Whether your agency is small or if it's big, it doesn't matter. If you have an amazing impact on one person, that's transformative for that one person. If you can have an amazing impact on 60 people, that's also transformative.
So I think that's a wonderful mindset to think, "I'm not going to grow my company just because I want to make more money, or just because I want to be more popular or well known, or have a better reputation. I actually want my identity to be found in the impact I have on people's lives on a personal level. That's the legacy that I want to leave behind." I think that's a beautiful thing, and actually it will help spur growth from a really good and honest authentic place. Which is a bit of a brain cramp when think of it from a business perspective, but this is the Overly Human podcast. So at this moment we're being pretty overly human.
Rob:
Yes, maybe a little too much. It's interesting because I have been thinking about things recently, and I'm wired to want to win. We all measure winning in business as profit, the ability to have it and be successful. And the more that I think about it, the less I feel like it's about having all the money. It's about wanting to win and then having an impact on people's lives while we do. It's wanting the profit to be a symptom of all the other great things that are happening and having an impact on not only the employees' lives but their families and all that stuff.
One of the things that's really interesting is that over the years, the things that keep being asked of us over and over again is, "Well, how big do you want to get?" That's always somebody's first question is when we talk about growth is, "How big do you want to get?" I've started to think about this as one of the most dangerous questions as an owner, and every time I've tried to answer it or have given an answer to that question, I've been totally wrong. Just because I remember way back in the very beginning we were like, "Hey, at our five year mark we may have five or six employees." And we were at 10 the end of the first year. We just set up to be wrong at every corner, and I've really started to think about the how big question to answer with a statement. More like, "Our main goal is to grow sustainably while still sleeping at night." That's what I want. I want a sustainable business that allows me to run it without feeling like I'm taking other things away from my life that I enjoy. If that includes growth, great because we can have more of an impact. But if that means we go through seasons where the other things don't line up, I'm fine with that too.
Traci:
I think that's a good perspective because you bring up sleeping at night and that's a very important thing. You want to make sure that you have balance. I also think having big profit margins is great too if you can accomplish that. The thing I think to remember is that business to me is... Having a company is like a huge jigsaw puzzle and you need all the pieces to be successful. Those pieces include your people, your talent, and how you're growing them. It includes your goals that you're setting for profitability. It includes how you are as a leader, how you're connecting to your clients, what's your sales pipeline and all those things work together. What sometimes we forget is we focus just on one. So we might just say, "Oh I'm only focusing on profitability." And you're forgetting about growing talent. Or, "I'm only going to focus on talent and I forget about setting goals for profitability." So just remembering that we need all the pieces of the puzzle to be a complete and healthy company I think is a good perspective to have.
Rob:
Yes, I loved the word you used there by the way. Saying talent instead of resources. It's a personal pet peeve of mine. It's so easy to fall into that manufacturing mindset that the humans around us are resources. That just seems crazy and I think the simple mind flip that you've used that word a couple times already to say, "Hey now this is the talent." How do we treat them and what they mean to our business is something that we can all do that doesn't take much effort. To just stop using that word and the implications of it.
Resources are something that we use up.
Traci:
Yes, it is something that we use up and it's also something that if you can think of the people you work with as talent, that always reminds us that we need to groom and hone and support. It's like a garden that we're growing of talent. How do we look at them. I like the word talent even better than creatives. I know a lot of people say creatives and not everybody thinks of themselves in that light, but everybody knows deep down that they have innate talent. They have innate gifts and skills. So if we're looking at them through that light, we as leaders can help invest in that talent.
Rob:
Yes, I completely agree. It was just as we prepared for this, I was thinking back through what growth has meant over the years to our company. We've been at this for a little bit more than nine years. We'll celebrate 10 years beginning of 2019, and one of the things that I think was really hard for me is learning the lesson that the people you start with are not the people you finish with. It took a lot of soul searching. I remember when the first person left the company that we had hired and it was like this monumental moment like, "Don't they believe in what we're doing anymore? What did we do wrong?"
What I've slowly realized over the years, the people who join you early are the people who identify with that small, scrappy, startup, loose rules, everybody on one team mentality that really if you're going to embrace any kind of growth isn't sustainable. It's easy to get addicted to just surviving and not be able to make the mind flip into a thriving mentality in our businesses. And there's people who totally identify with that surviving mentality, and you have to have them to start because you can't find people looking for stability when you're a brand new company of two months old and you're looking to hire. As your mission changes, I think the people that identify with where you are change too.
Traci:
I think that's true. I think that it depends on people's personality types. It depends on where and how they're motivated. We all have different motivations and so oftentimes when you start a company, like you said, you attract a lot of scrappy people who are motivated almost by the risk and the energy that comes with a startup. It's almost can be quite addictive. So when you reach a point of stability or you move out of a startup to a more established company, oftentimes you see that either those people can't function within a larger environment or they become thirsty for another startup. And so they typically will move to yet another startup.
I actually find this even with leaders, sometimes you have serial entrepreneurs who can take a company so far and then they'll pass it on to somebody else because they need to start another company. So you do see this attrition that happens when a company reaches a more established, stable part or phase of its growth.
I saw that a lot at HGTV. We grew extremely fast, so we were a very small team that started that network. We grew at such a rapid rate that it was very hard for people to be able to ebb and flow and flex in that environment and so we saw a lot of attrition at certain benchmarks of our growth. It's a natural thing, you can't take it personally. We also can't panic when things like that happen. We have to let the team know this is just part of growth, it's growing pains and there is good in it and there's hard in it, but that's the phases that you go through in business.
Rob:
I'll never forget, a couple years in we had three people all leave within a couple months of each other. Really was a foundational thing for what we became. That prompted us to create our apprenticeship program that's we've been doing for seven years now to try to help make sure that we have a steady supply of talent year over year that we are able to hire from. It's led me down this path to think about, I really think that there's two different kinds of companies in our space.
There's talent producers and talent consumers. And I'm a believer that most studio owners, we have to be talent producers. We have to grow our own talent and think about growing the next generation of people that we will need to hire and use if we want to continue growing. Because being a consumer means you're paying top market rates and all of that and you're competing with the Apples and the Googles and the Facebooks and everybody else. I think that that moment when those three people left really shaped who we've become. This focus on internal growth and making sure that people are given opportunities and all of that as time has gone on.
Traci:
I think that's great. And actually research shows that if you do groom your talent from within and promote from within, those companies tend to be more successful. They build a lot more loyalty, and you find that the talent within the company actually feels appreciated.
Also, because you're making a concerted effort and you actually have a program in place where you're grooming talent and bringing people up, it's just a great reminder that there's constant development and growth happening within your company. So there's not this knee jerk reaction that when there is a hole to fill that you have to go outside. Because you already have this mentality. You have this environment going on within your studio that's like, "We're going to grow and develop people. We're going to invest in people, we're going to groom them up." I love that idea of an internship program. Once you move somebody up into the studio and they're working, do you continue to grow and develop them as they mature within the space? How do you do that?
Rob:
Yes, I think you have to. With the apprenticeship program that we run, because there's always people who have a little experience, then the people who maybe were apprentices the year before or are more junior in nature, they have someone to mentor too. We really try to embrace the idea that everyone that you meet has something to teach you and everyone you meet has something to learn from you. I think that combined with always a fresh group of people who are at the beginning of their career to pour into really helps that mentality. There is no better way to learn something than to have to teach it. And I think that whole cycle, one of my favorite things is walking out into our workspace and seeing last year's apprentices pouring into this year's apprentices and that life cycle continuing.
I wish I could say that that was a real intentional thing that we did, but it was more something like we needed talent to hire, so we decided to start this apprenticeship. And only looking backwards it seemed like, "Oh wow. That was a really complicated piece of the jigsaw that fell into place and that's really core to who we are."
I'm always suspicious when people lay out an only forward focused vision to say like, "This is who we're going to become." Without having to look back at decisions that were almost made accidentally to identify who you are. I think that's something that really is interesting, especially around the people and the talent at your company is looking back into history will tell you who you are and what's important by evidence and that's way easier to lean into than it is to change direction going forward.
Traci:
Absolutely. We are big believers of that. We call it perspective before planning, and before you plan anything for the future what we do is look at turning points. What are the turning points in the life of your company, as opposed to just events or milestones? What are the things that that changed or shaped who you are as a company that you experienced over the last nine years that you've been in existence? Let's look at those. Let's really hone out all the learnings from that before we start looking forward. But a vast majority of people don't do that. They don't look backwards before they look forward. So I think that's great insight that people need to think about.
Rob:
There's one more aspect to the whole people and growth thing that I'd like to dive into. We're getting close to time, but I think the other perspective thing that I think we all need to accept is that people are going to leave.
I think my staff is tired of hearing me say, "There are seasons for things. This, Sparkbox, isn't my first job and if this is yours it probably won't be your last." Some of the feedback that I've gotten over the years is sometimes people say, "Thank you," but most of the time it's like, "Man, stop trying to tell us we're going to leave. We really like it here." And I'm always like, "Perspective changes over time. There are seasons for things. What you need now may not be what you need next."
I think the main goal that I try to communicate is the basic deal we make with people is that while you're here as an employee, what we'd like to do is do as much great work as possible. That much I think is what people owe us. As long as you're getting paid, the deal we're making is, "Let's do great work together." And if you ever feel like your season's coming to a close, then I'm more than willing to help them transition, find the next gig, write letters of recommendation, make phone calls.
One of the coolest things for me personally is seeing all of our alumni out there fulfilling our mission still. If our mission really is to make the web a better place, or a web built right, one of the ways we can do that is by having alumni that have learned, got the foundations of their career here with us and then have gone out and been ambassadors for that belief out there in the world. I'm sure there's somebody listening to this like, "Man, I don't think I'm part of your story anymore." And I would argue that you're totally part of our story, and it's okay, you have a major component in it but you're part of our legacy as well.
Traci:
Hearing what you're saying there is it takes the fear out of staying or leaving. It takes the fear out of being able to feel like you can figure out if this is the place for you. Or you can grow and develop knowing that you have that permission that this may be a season, it may be a long season and you could stay for multiple years or it could be a short season. I like to say that jobs are like coats that we put on. Sometimes they fit perfectly, and sometimes they fit perfectly for a long time, but sometimes they stop fitting. And as leaders sometimes we can look at our employees and see that the coat is ill-fitting.
Sometimes we don't. Sometimes it's the employee that sees it and feels it first. They know something's uncomfortable, but they're not quite sure what it is. But eventually we come to a place where we make that decision that it's time to put on a new coat and it's better for both. It's better for the person that's wearing the ill-fitting coat and it's better for the leader having to see them wearing that ill-fitting coat. It's just... It's life and it doesn't always have to be awful and painful. It can just be a step into a new direction, a new horizon for the company, for the leader, and for the talent that's moving on to a new adventure.
Rob:
Yes, no, I completely agree. So just to wrap us up today, and I loved the way you said, "Wanting to leave a legacy." One of the things that has been asked for us over the years is for a business plan, "Rob, where's your business plan?" And of course we didn't have one when we started. It was more of a, "Hey, we're just going to build stuff because that's what we wanted to do." But now it's like, "What's your five year plan? Where are you going?" And the only way that I've been able to answer that is, "Our five year plan is to leave a legacy of happy, healthy humans and families." And if we can do that by the people that we touch and the people they're involved with in their lives, then that's going to be pretty cool as we move through this. To have a whole bunch of people that can look back and say, "Hey, I was part of that story and in some small way, I was treated like a human, and my life was better because of it."
Traci:
That's awesome. I love it. I think it's an amazing legacy to leave.
Rob:
Well, we're working on it one day at a time.
Well, Hey, thanks for taking the time and talking with me today, Traci.
Traci:
Thank you.
Announcer:
This podcast would not be possible without the amazing Communications Team at Sparkbox.
If you like what you've heard, please subscribe and tell your friends to listen as well. The Overly Human podcast is brought to you by Navigate the Journey and Sparkbox. For more information on this podcast, or to get in touch with Traci or Rob, go to overlyhuman.com. Thanks for listening.
