What does scaling mean?
Scaling is the practice of converting a validated business idea into a fully operational growth business.
How do you scale innovation?
Innovation businesses scale when it has the access to customers, capabilities, and capacity needed to reach its full potential. These assets can be leveraged from the existing corporation, acquired from outside the organization often by buying a startup or other venture, partnerships with other companies in an ecosystem, or by building them internally.
Why is scaling so important?
Scaling converts the potential of an idea into an outcome that the company wants to generate, be it revenue, profit, customer acquisition, or something else.
What is an example of corporations successfully scaling?
LexisNexis successfully scaled its Risk Solutions business into a multi-billion-dollar business by combining its existing assets (brand, public records data) with acquired ones (technology, proprietary data sets), and ones that it built for the first time (new products and services).
Best Buy, the US electronics retailer, has assembled the assets to compete in the home health care market, scaling Best Buy Health into a unit with 1000 employees and over half a billion dollars in revenue. Here is an example of Best Buy Health’s scaling path:
The stages of Best Buy Health’s scaling page were:
- Entry Point: Home health monitoring – Leverage existing assets and partner for home health/safety expertise.
- Step 2: Expand users and capabilities – Acquire Great Call for subscribers, connected devices, and call centers. Acquire CST to scale monitoring business, and insurers. And build a new call center.
- Step 3: Create platform – Acquire Current Health for subscribers, medical devices, in-home testing, and secure shopping. Partner with Lyft, payors and providers.
- Step 4: Grow subscribers, add new capabilities – Focus on new customers, Apple Lively app, big data, and analytics.
What are some common pitfalls of scaling?
The two most common pitfalls for scaling are investing ahead of learning, so advancing an incubated business before it is fully validated, and failing to invest adequately when the opportunity to scale arises. This leads to the common phenomenon of pilot purgatory.