It Takes A Village Of Gurus To Help A Company Scale Up: Verne Harnish

In an insightful interview with Verne Harnish, founder, author and CEO of Scaling Up, we delve into the concept of ‘scaling up’ and its relevance in the Indian business landscape. With the business world witnessing a proliferation of startups, Harnish emphasises the need for a practical manual that guides companies in their journey from infancy to maturity. He highlights the unique challenges faced by Indian companies, ranging from infrastructure and talent retention to the unexpected consequences of a robust internet landscape. Harnish also shares valuable insights into common pitfalls entrepreneurs encounter when scaling their businesses, offering a roadmap for success. Excerpts:
 
Can you explain the concept of scaling up and its relevance to the Indian business landscape?
 
According to global statistics, approximately 11,000 startups emerge every hour across the world. It also seems like there's a business incubator on every street corner to assist these startups. However, despite having an MBA, which is designed to impart knowledge about managing large companies, I realised that there was no equivalent parenting manual for nurturing a startup into a successful, mature company.

So, I spent ten years running an executive programme at Massachusetts Institute of Technology (MIT) with one fundamental question - What would be the manual, the parenting guide, to make it easier to nurture a business from its startup phase to maturity? This is the essence of ‘Scaling Up’, which is the result of the collective wisdom of about 40 global thought leaders. I don't have all the answers, as I often say, “It takes a village of gurus to assist a company.” It has become a how-to manual for more successful and smoother scaling, helping to avoid the typical barriers and pitfalls that everyone seems to encounter. This way, you don't feel isolated.
 
What are some key challenges that Indian companies often face when it comes to scaling up, and how can they overcome them?

In the Indian context, the key challenges that companies often face when it comes to scaling up are quite unique. Over the past decade, one prominent challenge has been the local infrastructure. The infrastructure challenges have caused friction and increased costs, with monthly meetings for many Indian companies costing about 7 per cent of executive payroll, instead of the typical 5 per cent.

Another challenge is the internet infrastructure, which, while being one of the best, has created a new set of issues. The primary concern that has recently come up for Indian companies I've worked with is related to people strategy. While the internet has made it easier for everyone to find talent, it has also made it easier for other companies to poach the talent that these Indian companies have trained and developed. So, in a way, the great and inexpensive internet has become a double-edged sword, addressing infrastructure and talent poaching challenges.

Surprisingly, not many entrepreneurs seem to worry about finance; they generally have the cash they need to execute their plans. This is in contrast to some other countries we've worked with where finance is a more significant concern. Ultimately, mindset, leadership development, scalable infrastructure and talent retention are critical areas where Indian companies need to focus.

What are the common pitfalls entrepreneurs encounter when scaling up their businesses?

In my experience, the common mistakes that entrepreneurs make when scaling up their businesses can be summarised in three key areas. First, they often overlook the importance of developing leadership throughout the organisation, not just at the senior level. A culture of continuous learning and development should extend to all employees. The second mistake is failing to establish scalable infrastructure. Having robust systems and processes in place is crucial for growth.

The third mistake is neglecting the development of a "learn it all" culture. Satya Nadella at Microsoft emphasised the shift from a "know it all" to a "learn it all" culture. It's not enough for senior leadership alone to adopt this mindset; training and development should be pervasive throughout the organisation.

These are the common mistakes I've observed and addressing them can significantly improve the success of scaling up a business.