Ep168 Transcript 

Welcome to episode 168. And today I thought it’d be good to talk about something that a lot of business owners feel, but they don’t always name in this way. And that is why scaling a business can feel so much harder than starting one.
Now, I don’t know about you, but every business event that I attend, owners and leaders are talking about business growth. We’re almost obsessed by it. And in many ways, I think it’s because people think it’s what we have to do in business. We have to keep growing. And also because it sounds really exciting.
You can have more customers, more revenue, more opportunities, maybe more people joining the team. And from the outside, that all looks like success. And of course, it is success. You know, you’ve built something that people want and you’re growing because of that. And that’s worth acknowledging. But often growth can also feel really messy and it can feel like the business is becoming more complex, but the way that things are being managed hasn’t quite caught up yet. You might have more people, but you feel busier. You might have managers in place, but people are still coming to you for decisions.
You might have new starters joining, but they’re not getting up to speed in the way that you expected. And you might have a team that was once really close and connected, but as you grow, communication starts to feel harder and culture starts to feel a little less obvious.
And I think this is where a lot of business owners can be really quite hard on themselves. You know, they think, oh, why is this so difficult? We want it to grow, but we’ve just created this whole new set of problems. And for some people, the answer is that they decide to intentionally stop chasing growth. And I’ve come across owners who have exited their businesses just to start something else as a one person team. And the reason it can feel so hard and messy is because starting a business and scaling a business are two really different things. Starting a business relies on a lot of energy, ideas, relationships, the founder being across almost everything.
Whereas scaling a business requires something quite different. It’s about clarity and consistency and structure and other people being able to make decisions without everything coming back to the founder. And that’s a really different stage of business. And it’s also a really different stage of leadership.
So in this episode, I want to talk about the people side of scaling, because that’s often where the cracks start to appear first. We can talk about systems and finance and marketing and operations, and all of those things matter. But very often when a business starts to feel harder to run, it’s because the people foundations haven’t kept up with the size of the business. And by that, I mean things like role clarity, onboarding, accountability, manager capability, decision making, communication, and the way that culture is lived through the business.
And none of that needs to be complicated, but it does need to be intentional. When a business is small, a lot of things just happen quite organically. You know, everyone knows what’s going on because everyone’s pretty close to the work. You can have quick conversations, make fast decisions, solve issues. And your team learn by watching you and they pick up on the culture because
They’re around the founder and the original team day-to-day. That’s not a bad thing. And in the early stages, that’s exactly what a business needs because you need to be flexible and people need to jump in and help. And you need people that are happy just to work things out as they go because the business is still forming.
And you don’t always know what it’s going to look like in three, 6, 12 months. But the challenge is that those very same habits that work right at the beginning can become really unhelpful as you’re growing. You know, everyone has always done a bit of everything then at some point people start to become unclear about who owns what. If decisions have always gone through the founder, then at some point the founder becomes the bottleneck. If onboarding has always been informal, then at some point new starters get different experiences and they start to feel like they’re not being trained and supported correctly.
And if culture has always been learnt by just being close to the founder, then at some point the business is a different way of showing what the culture is. So it’s not necessarily that anything has gone wrong. It’s more just that the business
will reach a stage where the old way isn’t strong enough to support the next stage of growth. And I’ve spoken about this in a previous episode about what Vern Harnish calls the valley of death, which is that our business will grow, it plateaus, and then to get to the next stage, we’ve got to go into the valley of death because
The people, processes, systems, culture that got us to that first plateau aren’t necessarily the ones to get us to the next one.
So when we start to understand that, and it’s not just me as an owner, it’s not just my business, that’s when we can stop blaming ourselves or blaming the team and start asking a much better question, which is, what needs to change now that we are bigger?
And it’s also worth acknowledging that businesses are not trying to scale in easy conditions at the moment. The latest ABS business count data showed that in Australia, we have more than 2.7 million actively trading businesses. And in the last year before that report, there were…
over 437,000 business entries and over 370,000 exits. So while many businesses are getting started, there are also a lot that are exiting and closing. And so that’s the real challenge. It’s not just starting, it’s building something sustainable. And then when you look at what small business owners are dealing with, it becomes even clearer. There’s a council of small business Organisations Australia report, which found that 72% of small business owners said that rising business costs were the biggest obstacle to expansion. And it found that 76% of small business owners reported stress or anxiety, and 57% had experienced burn out.
Yeah, I know they’re not great numbers and I don’t share them to make this sound all doom and gloom, but yeah, they’re important because they bring the conversation back to the real world, which is that scaling a business, it’s not something just happening in a textbook somewhere with, you know, here’s step one, two, three, 4. It is happening while owners are dealing with cost pressures, recruitment challenges, compliance obligations, technology changes, and sometimes a really tired leadership team. So when I talk about people systems and foundations, I do not mean red tape. I mean taking some of the load out of the founder’s head and putting it somewhere that’s repeatable and reliable. Because if everything still depends on the founder remembering, noticing, deciding, following up, fixing, their growth is going to be exhausting really quickly.
So in terms of what tends to break first, the first thing I want to talk about is role clarity, because this is a common one when we’re growing. In the early days, everyone does everything. And that’s what makes the business work. You know, someone just sees a problem, they jump in, they fix it. Someone helps a client, even if it’s technically not their role.
And that creates a really strong sense of teamwork. But as the business grows, that kind of model can really quickly turn into no one knows who owns what. And when that happens, work can be double handled, can get forgotten. People assume someone else has done something. You know, managers assume someone else has checked the details.
People are waiting for approvals, so they don’t know, do I have the authority to make that decision? And so, of course, the founder then gets pulled back into the middle to sort it out. So if you’re listening to this, I invite you to think about your own business for a moment. If something goes wrong, do people know who owns it?
If a client has an issue, does everyone know who makes the decision? Because sometimes what looks like a performance problem is a clarity problem. And we can get frustrated that people aren’t taking ownership or we haven’t actually made ownership clear enough. And I had this recently where a business owner was on leave and was receiving Slack messages from one of their team members about how a piece of software wasn’t working for that team member, and then there was another one emailing the owner about how a client needed a very minor scope change, and the owner was talking to me and getting really frustrated, but from my perspective, this is actually a really good signal because it means that you now know your team do not have the clarity on what they can own and make decisions on, and they’re leaning on you too much.
So fixing that isn’t about writing position descriptions that are a laundry list of tasks, but it does mean making sure people understand what they’re responsible for, what success looks like, what decisions they can make, and when they need to involve someone else.
The second thing that often starts to break is onboarding. When a business is small, onboarding is pretty personal. A new person joins, they sit with the founder or a senior person, they hear stories, they learn the clients, they’re watching how everyone’s working, and they just understand the culture by being close to it. But as the team grows, onboarding can become really inconsistent.
So you can get one person with one manager having a fantastic experience because that manager is really organized, it makes time for them. And then you have another person who gets a laptop and a login and a well-meaning manager who says, you know, okay, great, glad you’re here, ask me if you need anything. And then, you know, disappears into meetings for the rest of the week.
And then a few weeks later, we wonder why that second person is still asking basic questions or why they’re doing things differently or why they don’t seem to be fitting in. You know, so onboarding is not just showing someone where things are saved or where the bathrooms are. You know, it’s really about how people learn what matters in your business. How do they understand the standards, the clients, the rhythm of the team, the way decisions are made, and how we treat each other. So if onboarding is left to chance, you’re going to get a different result every time. And that’s much riskier as the business grows because each new person is either having a really great positive impact on the culture or starts to add in a little bit of variation which can become toxic down the track.
And this is a really common area that we find employees bring up in engagement surveys and culture focus groups when we run them, because the inconsistency of onboarding impacts everybody across the organization, not just the new person.
The third area is accountability. And, you know, I will hear people say, we need more accountability. And I understand what they mean, but accountability is one of those words that we can use a lot without really understanding what sits underneath it. Because accountability is not just telling someone, you know, you need to take more ownership.
Accountability requires clarity, regular conversations, feedback, expectations, and follow through. People need to know what good looks like, what they’re working towards, and what to do if something’s not quite right. And this is where our managers play such a key role.
role. If our managers aren’t having regular one-on-ones, if goals aren’t clear, if feedback only happens when something goes wrong, accountability is going to be difficult to achieve. And we know managers will sometimes avoid difficult conversations. There’s a reason why they’re called difficult. You know, sometimes it’s just they don’t know how to have them.
They’re worried about getting it wrong. Well, they’re just busy. So, you know, that type of conversation gets pushed to the bottom of the list. But the problem is that when we delay these conversations, the issue doesn’t disappear. In my experience, it just gets bigger. So the manager becomes more frustrated.
The employee feels blindsided when something is finally raised and the founder or the senior leader ends up dealing with something that could have been much easier if it had been addressed a whole lot earlier. So one of the simplest things a growing business can do is create a regular rhythm for performance conversations. And I’m not talking about a heavy annual review process. It could just simply be monthly one-on-ones, quarterly priorities, and just getting into the habit of giving feedback in the moment. So we want performance to be a part of normal business conversations and operations and not something that only gets raised when there’s a problem or when we get our yearly e-mail saying it’s time to do performance reviews.
The 4th thing that starts to get difficult is decision making. And this can be pretty tricky for founders because in the beginning it makes sense that they make all of the decisions. So the business, the clients, the risks, they’re trying to protect the business. But as it grows, this is where it can become a bottleneck.
So people are waiting for the founder. Managers are checking everything. Small decisions take longer than they should. And then the founder says, why can’t anyone around here just make a decision? But you know, that’s the time where we need to pause and say, okay, do people know which decisions they can make?
because people will come back to the founder, not because they’re incapable, but because the decision-making rules aren’t clear. Or maybe they’ve made a decision in the past and then they were corrected and so now they’re scared of doing it again. Or maybe the founder has a really particular way of doing things and so they’re worried that they’ll do it in the wrong way. So part of scaling is moving decision making out of the founder’s head and into the business, which means being clear about what managers can decide, what team members can decide, what needs approval, what principles guide decisions when the founder’s not there. And this is where having values becomes really practical because they’re not just words on your website or in an onboarding document. They should be the lens through which people are making decisions. So if one of your values is about care, what does that mean if a client is unhappy?
If one of your values is about ownership, what does that mean when someone sees a problem directly outside of their role? And this is how our culture scales. It’s through decisions and not just good intentions.
Now, I can’t do an episode like this without talking about one of the biggest areas, which is manager capability. And I’ve spoken about this many times, how many businesses promote people into management roles because they’re good at their job, they’re technically strong, they’re reliable, they’re loyal, they’re good with clients.
But they don’t actually know how to manage people. So, you know, I invite you to think about your own career. And I’m fairly certain for most of us, we can remember someone who was not a great manager. And that could be because they just weren’t taught how to manage. They have never been shown how to give feedback, how to run a one-on-one, how to have a difficult conversation how to coach, you know, I mean, scaling a business, that gap can be a really big blocker.
Gallup’s 2025 workplace research found global employee engagement fell from 23% to 21%, and the sharpest decline was across managers. And this makes sense because managers are often stuck in the middle. They’re expected to deliver the work, but they also need to support the team, manage change, communicate, keep people engaged, handle performance issues.
So, you know, if we want a business to scale well, we have to invest and support our managers. We need to be clear about what we expect from them and then give them the tools and the confidence and check in with them regularly. Because managers are the link between the founder’s vision and the employees.
day-to-day experience. If our managers are unclear, inconsistent, or unsupported, the team and our culture will feel that.
So what do we do with all this? You do not need to create a massive HR manual or introduce a whole lot of processes that don’t feel like your business. You know, really, the best people systems for small and medium sized businesses are just really simple, practical, easy to use. So the goal is to not be corporate.
but to just make your business easier to work in. So if your business is growing, start with a few foundations. Start with role clarity so everyone understands their role and how it fits in with everyone else. Look at your hiring and onboarding so that every new starter gets a consistent experience.
and understands not just what they need to do, but how things get done in the business. Create a simple performance rhythm so managers and employees are having regular conversations about priorities, progress, feedback and development. And support your managers, especially if they’ve been promoted because they were great at doing the do. But now they need to learn how to lead people.
And then we want to clarify decision making so that everything doesn’t need to go back to the founder. None of that’s complicated, but it does need to be intentional because those informal processes just stretch and stretch and stretch until they break.
So this is the key message I want to leave you with today. Scaling does not mean losing what made your business really special. It doesn’t mean becoming cold or corporate or full of red tape. It means protecting what made your business special by putting enough structure around it so it can continue as you grow.
And if you’re listening to this and you’re thinking, yeah, our business is growing, it feels a bit messier than it used to, then a useful question to reflect on is, what are we still managing as though we were a team of five, even though we’re now a team of 20 or 30 or 50?
Pick one area where the cracks are showing and start there. So if people are unclear, start with roles and responsibilities. If new starters are taking too long to settle in, start with onboarding. So if communication feels patchy, start with a rhythm of meetings that updates those small.
steps can make a huge difference where we’re focused on the right things. And this is also where external HR support can be helpful, particularly for businesses that are too big for everything to be informal, but aren’t necessarily ready for a full-time HR person. Sometimes you just need someone to help you to
step back, look at where the cracks are forming, and put practical things in place before those cracks become bigger issues. So good HR support should not make your business feel more corporate. It should help your business feel calmer, clearer, and more consistent. And of course, if you need that support, just reach out to us at Amplify HR.
So coming back to the question that I started with, why is scaling a business harder than starting one? It’s because starting relies so heavily on the founders’ energy, ideas and involvement, whereas scaling requires the business to stand on its own. It requires other people to lead, decisions to be made without the founder, expectations to be clear and the culture to be intentional.
So this week, take a moment to think about where is your business still relying too much on memory or on the founder being across everything? And think about that one thing that you could start improving. And if you received value from this episode, I would love it if you could leave a rating or a review of Apple Podcasts or Spotify so someone else can also find the episodes to help.
with their business. Episodes released on Mondays, so click subscribe and you’ll be notified of when that’s available. Thank you so much for joining me. If you have any feedback, questions or ideas for future episodes, head on over to amplifyhr.com.au or connect with me on LinkedIn and we can start a conversation.