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Build Borrow or Buy - How to scale your organization (handout)

Knowing the most effective way to scale your organization allows you to make best use of limited resources and take advantage of more opportunities. This presentation provides several ways to know what is best for you.

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Build Borrow or Buy - How to scale your organization (handout)

  1. 1. Thoughts On How to Scale the OrganizationWhen to Build If work is established and continuing If new equipment, technology, WWW.SALESLABDC.COM/LEADERSHIP process can improve profitability If cost & control are critical issues and If expanding service lines to meet WWW.SALESLABDC.COM/RESOURCES customer proven wants & needsWhen to Borrow If times are turbulent & uncertain If need immediate ramp-up or rapid How to Scale expansion If need to quickly get needed Your Organization expertise or process If need to staff or equip for a short- to medium-term projectWhen to Buy Build, Borrow, or If fulfills strategic plans & goals Buy? If establishing in new market(s) If goal to acquire key experience, innovative new technology, or industry leadership If eliminating competition Jack GatesCompleting today’s presentationPlease comment on the nuggets you have JACK.GATES@SALESLABDC.COMtaken away from this presentation at you! This work is licensed under the Creative Commons Attribution-Noncommercial 3.0 United States License.
  2. 2. Scaling Organizations Pros & Cons of Build-Borrow-Buy What Are the Things You WouldA popular axiom is a business must Traditional Build Growth Look at to Make Choice for Growth?always grow. The revised rule is that ▲ Pro – greater controlbusiness is in constant change. Traditional Build Growth ▲ Pro – minimizes initial costRecently, growth is hard to achieve. ▲ Pro - strengthens internalLeaders have to navigate world ◘ developmentcompetition, world labor market for ▲ Pro - experienced in processknowledge and administrative workers, ◘ ▲ Con – commitment over flexibilitychanging market demands and a ▲ Con - capital asset investment nowchanging domestic & world economy. ◘ ▲ Con - ramp-up existing productivity ▲ Con - staff defections & raids ◘How do you scale to meet economicconditions? Traditionally, growth was Flexible Borrow Growthby adding employees and resources. This ▲ Pro - instantly productive staff &requires capital investment and a equipment Flexible Borrow Growthcommitment to greater labor costs – ▲ Pro - flex up and down quicklyaffecting flexibility of the organization ▲ Pro - quick ramp-up for productivitywhen agility is needed. The organization ▲ Pro - new expertise & technical ◘was building to create growth. know-how ▲ Con – more costly per hour ◘In uncertain times, flexible growth lookslike an accordion – economy expands; ▲ Con - outsider aloofness – hired gun ◘markets contract; hiring; layoffs. So ▲ Con – reassignment of staffleaders would borrow people and ◘resources using contract employees and ▲ Con – extra layer of managementleased equipment for flexibility to Strategic Buy Growthexpand & contract quickly. ▲ Pro - immediate productive presence in new location Strategic Buy GrowthStrategic growth is to buy growth ▲ Pro - ‘inherit’ trained staff,through merger and acquisition. By equipment, facilities, technology ◘acquiring (or being acquired) an ▲ Pro - expanded customer base &organization you gain employees, inventory or achieves ◘resources, technology, market share, ▲ Pro - increased market share &customers, and critical mass. ranking ◘ ▲ Con - EXPENSIVE in $$ and timeEach approach has strengths and risks, ▲ Con - high rate of non-completion ◘which create a new dynamic for the ▲ Con - lost of focus on businessorganization. ▲ Con - missing projections & goals