EP 31: System of Business Growth Stages with Daniel Marcos

Podcast Episode #31

Growing your business has to be done in the right way, however, and it’s not uncommon for entrepreneurs to fail because they haven’t had the patience or know-how on how to do so. Daniel’s system below explains the 4 stages of growing your business, with key insights on how to move from one level to the next.

He is a graduate of EO’s premiere CEO program, the “Birthing of Giants”, and its continuation, “Gathering of The Titans”. He holds a BS in Industrial and Systems Engineering from ITESM (Monterrey Tech) and an MBA (cum laude) from Babson College at Wellesley, MA.

Grab Daniel’s system: The system of business growth stages

The System of Business Growth Stages

Stage 1: Startup Venture

• Business start-up with 1-5 employees that needs to focus on product development.
• Priority: Nail your value proposition.

• • Understand what are you selling, at what price point, in what packaging and what marketing to undertake to make your market want to buy your product or service.

• Barrier: Market Dynamics

• • How is the market running today, who are your competitors, what prices are they selling their product or service for, what are their discounts?

• Ability:
  • Have a conversation with your client. Understand what are you selling them and what they want to buy.

• Decision: Strategy

• • Create and update your business plan.

Stage 2: Growing Small Business 

• Small business with 6-15 employees, that needs to focus 100% on sales.
• Priority: Hire the right team.

• • You cannot be very selective during the first stage, so use this stage to select the right team members.
• Barrier:Leadership
• • Begin leading a team. 
  • Learn how to delegate and define direction.

• Ability: Predict, Delegate and Repeat

• • Create repetitive processes and build your systems.

• Decision:People and Cash

• • Hire the right people and understand what it is to be a leader. 
  • Be cash-wise for cash constraints.

Example: Your people see that the company is growing and start asking for a higher salary.

Stage 3: Business Scaling Up

 Priority: Scale up.

• • After you build your team and have your systems in place you begin to scale up.

• Barrier: 

• • Look for systems that will help create great structure in your company.

• Ability: Align and Simplify.

• • Analyse your systems and make them easier and simpler. 
  • Align people with just one or two things.

• Decision: 

• • Now that you have your product, your team and your systems, replicate that as fast and as cheaply as possible.

• Functional Organisational Chart.

• • As a medium sized company, it is important to have that chart in order to give structure to your team.
    • • CEO 
      • The first level of management:
        • EA (executive assistant)  – delegate all small fixes so you don’t have to do them. 
        • HR/LO (HR Leadership & Organization) – that’s  HR on a strategic level, that will hire and coach your first line of executives.

• Service Oriented Functional Organizational Chart.

• • Turn your Functional Organisational Chart upside down. 
  • Leadership in stage 3:  manage and help the people above you to be more productive. 
  • The people on top of the chart, who are in touch with the client are the most important people in your organisation.

• Identify and remove the bottleneck.
  • Evolve to leader of leaders.

Stage 4: Large Business

• Priorities:Continuous growth.
• Ability: Be a strategic innovator and a catalyst of change.
• Evolve from a leader to a satellite gravitating around the company on day-to-day operations and foresee the trends.
• The S-curve of a product lifecycle. 

• • Once you have a client for your product, instead of investing in the same product, invest in another product to up-sell.

• To 10x your company and 10x your team in terms of mentality and training.
• Levels of Management / Training:

• • Individual contributors.
    • • Frontline employees – train them on:
        • Technical know-how (teach them what they do, so they do it better)
        • Focus
        • Productivity – Results
        • Humbleness – Cultural fit.

• First-time leaders: 

• • Foreman, supervisor, superintendents – train them to:
    • • • Be great listeners
        • Create performance pattern recognition
        • High-performance teams
        • Talent development

• Leaders of leaders:

• • Departmental Managers – train them to:
    • • • Identify the right person for the right position
        • How to develop leaders
        • Big picture
        • Negotiation
        • Predictable skills

• Leaders of the Organization

• • C-level Executives, Vice-presidents – train them on:
    • • • People
        • Change management
        • Global vision

• The 4’C rule; how to get confident.

• • • Commitment – Example: Make a commitment: I am going to do THIS by THAT date.
    • Courage – The commitment will push you to have the courage to change and learn new systems and procedures
    • Capability – Courage will help you build new capabilities.by learning new systems and procedures.
    • Confidence – Having these new capabilities will help you have more confidence in execution.

Thank you for listening!