1. Thoughts On How to Scale the
Organization
When 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 & needs
When 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 project
When 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 Gates
Completing today’s presentation
Please comment on the nuggets you have JACK.GATES@SALESLABDC.COM
taken away from this presentation at
http://bit.ly/9CeRJi
Thank you!
This work is licensed under the Creative Commons
Attribution-Noncommercial 3.0 United States License.

2. Scaling Organizations Pros & Cons of Build-Borrow-Buy What Are the Things You Would
A 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 control
business is in constant change. Traditional Build Growth
▲ Pro – minimizes initial cost
Recently, growth is hard to achieve. ▲ Pro - strengthens internal
Leaders have to navigate world ◘
development
competition, world labor market for ▲ Pro - experienced in process
knowledge and administrative workers, ◘
▲ Con – commitment over flexibility
changing market demands and a ▲ Con - capital asset investment now
changing domestic & world economy. ◘
▲ Con - ramp-up existing productivity
▲ Con - staff defections & raids ◘
How do you scale to meet economic
conditions? Traditionally, growth was
Flexible Borrow Growth
by adding employees and resources. This ▲ Pro - instantly productive staff &
requires capital investment and a equipment Flexible Borrow Growth
commitment to greater labor costs – ▲ Pro - flex up and down quickly
affecting flexibility of the organization ▲ Pro - quick ramp-up for productivity
when 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 looks
like an accordion – economy expands; ▲ Con - outsider aloofness – hired gun
◘
markets contract; hiring; layoffs. So ▲ Con – reassignment of staff
leaders would borrow people and ◘
resources using contract employees and ▲ Con – extra layer of management
leased equipment for flexibility to Strategic Buy Growth
expand & contract quickly.
▲ Pro - immediate productive presence
in new location Strategic Buy Growth
Strategic 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 time
Each approach has strengths and risks, ▲ Con - high rate of non-completion ◘
which create a new dynamic for the ▲ Con - lost of focus on business
organization. ▲ Con - missing projections & goals