Events Dec 10, 2018

The Partech Shaker hosted Cedric Mao, co-founder of FlyTheNest, a collaborative approach for a successful scale-up phase. Based on his experience in supporting hundreds of start-ups through this complex stage, Cedric Mao shared his insight on how to navigate scale-up serenely, while maintaining the agility and momentum of the company’s beginnings.

 

What is the scale-up phase?
Scale-up is a very complex time. You are experiencing strong growth, your customer base is growing fast, and your headcount has just doubled in size. The time has come to build and structure your team and working methods so that you don’t fail: this is the scale-up phase.
The scale appears when there is a dichotomy between the run and the build phases. You are still building your company, but to manage recurrent actions efficiently, you need to structure and organize your business. This is the time when your company needs to be monitored more closely. You initially managed your business like a project and you do still need to keep building up your company, but you also need to automatize, improve and make the key processes work. The scale phase is when your run phase emerges, but you still need to do some build. Each of these two phases calls for separate monitoring processes.

Let’s look at the 4 phases of a start-up lifecycle:
1- Discovery - finding a solution to an issue
2- Validation - finding adequation between a product and a market
3- Efficiency - structuring your business to manage growth (adequation between organisation and growth). This is a short but key phase. It’s when you initially implement internal focus to ensure healthy growth. The Efficiency phase enables you to understand how increase in volume is transforming your company.
4- Growth

 

STRUCTURING AND MONITORING YOUR RUN PHASE

1. Understanding and describing your processes
The first thing to do when structuring your Run phase is to understand and detail your processes, beginning with the key processes that are implemented across your company: your clients and your employees.
Clients: Acquisition / Sales / Onboarding / Churn (client’s life) / Ex client
Employees: Recruitment / Onboarding / Employee life within the company / Offboarding
You need to have a process for each step of the journey from the time your client/employee joins the company until he/she leaves. This approach - breaking each process down into key steps - is applicable to any process.

2. Values as a priority tool to design your processes
Corporate values are the number one tool to design your processes. Having values is good, but what really matters is reflecting your values in practice. You need to find innovative ideas to instil your values into the daily life of your company. This is how a strong corporate culture is built. Each value should be embodied by every step of your processes. For example, when recruiting a new employee, your values should drive away those who don’t match these values and attract those who do.
What is fundamental is to make your values become a reality in your processes. This will contribute to creating a virtuous circle.

3. Knowledge base to onboard any newcomers and improve your existing processes
This knowledge base should exist for each process. Describe the existing processes (not the perfect processes) currently being implemented across your company and involve all your employees in the continuous improvement of these processes. At Fly The Nest, we use this collaborative approach to improve our processes: everyone contributes to the continuous improvement of our processes, and growth increases alongside our process improvement. Never under-estimate a newcomer’s capacity to drive change.

4. Monitoring: what are the best KPIs to monitor my company’s growth
To identify the right KPIs for your company, ask yourself if you can improve them. If you can’t, then these are not the right KPIs. Do I have an action plan if my KPIs are too low or too high?
KPI examples:
- Customer acquisition: number of leads per month
- Serie A: leads quality
- Serie B: cost per lead
Don’t monitor all KPIs at the same time.
Cedric Mao recommends building a dashboard covering the company’s key macro KPIs, followed by a KPI for each process. He believes that OKRs are a monitoring tool for the run phase but not for the build phase. An OKR is a goal for your KPI, aiming to drive continuous improvement processes to your teams. Many companies work very well without any OKRs, as continuous improvement is an innate feeling that we all have.

5. Tools to support your processes
You can use a CRM or an Excel file to support each process step. Instance bodies are also important to discuss the tool.
Finally, it is critical to appoint an owner for each step, an expert in charge of each process. Remember: when several people are responsible, no one is responsible.

 

HOW TO MONITOR YOUR BUILD PHASE

The Build phase is the building of tomorrow’s business. This is the vision. Distinguishing the build from the run phase is not easy and can differ from one company to another.
Let’s look at an example: in your Sales process, if your KPI is the number of leads and your funds ask you to monitor your leads quality in addition, this is a Build phase. Another example: a round of fundraising is a Build phase for most companies but if you are a Serie B start-up and you raise funds regularly to target new countries, this becomes a recurrent process, a Run.

1. Define your vision
For Cedric, a vision is well defined if you establish 3 terms with 3 different goals:
- Short term: this is a 6-month plan (1 year is too long to have your team committed and 3 months too short make any significant progress): it describes how you see your company in the future, this is the focus, the next project to tackle,
- Middle term: this is a give-up tool. Anything which is not a mega goal goes into middle term,
- Long term: this is an inspirational tool, a moto, a mega target which is not operational on a daily basis.

2. Describe your projects, formulate your results
What are your objectives and projects for each process? What are your sales objectives for the next 6 months? Strategy and operational strategy are not the same thing. It is easier to commit your employees to objectives than to a strategy. Everyone needs to understand where and how they can contribute to the company’s project and vision. This is key.
A task is boring, while an objective to achieve is stimulating. Give your team a target to reach and the freedom of the means to reach it. Formulating your strategy in target form is motivating. Another key element is to structure the company’s challenges by responsibility level: is it at the leader level, team level or employee level?

 

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