The scale-up challenge : How do you pilot a company in hypergrowth ?

By Lambert Jerman and Evelyne Misiaszek

Successful companies like Sigfox, BricoPrivé or Hellocasa all belong to the world of scale-ups. Whether these companies are young or old, their hypergrowth phase is a highly critical period.

These days, the idea of « scale-up » includes businesses with an annual turnover greater than €5m, with growth of at least 10 to 20% over three years. After graduating from being a start-up and having validated its business model, the scale-up must transform rapidly on several levels : internationalization, recruitment, new business, technical or financial partnerships. Its internal piloting system must keep evolving so that the company can face new challenges, while at the same time the director has to ensure that any new management tools put in place are adapted for hypergrowth. It’s a situation that requires a delicate balance between short-term decisions and the company’s long-term strategy.

A loss of proximity and a delicate balance to be achieved

Recruitment needs being, by definition, substantial in companies in hypergrowth, employee numbers are inclined to increase so quickly that before long the director finds him or herself unable to directly supervise the workforce or get to know them personally. This loss of hierarchical proximity is often exacerbated by an ever greater geographical distancing. Information flow can be threatened within that structure, and jeopardise the business’s culture and cohesion. The director’s charisma, values and personal commitment are no longer enough.

To get to grips with this new reality, the director of a scale-up has to adapt and reinforce the way the company is governed and strengthen its piloting system, without curbing the creativity and innovation so vital so its development.

Achieving this delicate balance in a way that maintains responsiveness and the informal coordination inherited from the start-up alongside more formal and rationally-defined procedures necessary to a larger group, is anything but easy. Four drivers of action can nonetheless be identified to make transforming the company less complex, and to maintain as far as possible the proximity necessary for it to remain cohesive.

• The redefinition and effective delegation of responsibilities, by upskilling staff, particularly those with high potential. This requires the director to listen to and support his or her staff, and to trust them and include them in decision-making.
  • Possible actions :
    • Create centres of responsibility with real decision-making powers.
    • Follow the new prorogatives in their entirety, despite the temptation to take « shortcuts » in urgent situations.
  • Information transmission should be agile and reliable. To be able to delegate, the director must implement a reliable information system which can be flexibly adapted to the needs of the company’s decision-makers.
    • Possible actions :
      • Communicate on a regular basis summary reports and key indicators describing the firm’s strategic levers, with the intention to ‘objectivize’ the activity, and in time, to better anticipate and facilitate decision-making.
    • A combination of formal and informal controls.. Alongside the establishment of indicators, the director could create opportunities for regular exchange of ideas with his or her teams to encourage better upward and downward circulation of information.
      • Possible actions :
        • Setting up recurring meetings where technical ideas can be exchanged, as well as more informal and occasional encounters to encourage team involvement.
      • Maintaining the entrepreneurial spirit. The setting up of a more structured piloting system should not put a brake on innovation and creativity within the company. It’s the director’s responsibility to maintain the spirit and values of his or her company by spending time with the teams on a regular basis to share his or her vision, without threatening their much-needed autonomy.
        • Actions :
          • Communicate on a regular basis the goals and values of the company, the director’s strategic vision, day-to-day issues and more strategic ones aimed at successful hypergrowth.

To tackle the two major risks associated with piloting hypergrowth – a more complex business environment and the loss of proximity to its teams – the director of a scale-up needs to let the company find a balance between the very informal piloting system of a start-up and the more formal control of the big groups.

This article has been written under the partnership “Scale UP – Gérer l’hypercroissance”