The terms ‘scaling’ and ‘growing’ are thrown about a lot, in the creative industry and beyond. Often, they’re used interchangeably. But, there are some key differences between them. This blog post discusses the difference between scaling and growing, particularly for creative agencies.
In my role as a creative operations specialist, plenty of what I do centres on helping agencies to ‘grow’ and reach their goals. However, I wouldn’t really consider myself to be a growth consultant. If I had to label it, I would say I’m more of a ‘scaling consultant,’ if such a term exists.
It’s important for creative agencies of all sizes to know the key differences between scaling and growing, as this can help them to better understand where they want to go and how to get there. So, what do the two terms mean, and what are the differences that you should be aware of?
To me, scaling is all about optimising what you’ve already got to help you reach your goals. The result should be increasing your revenue at a rate that far exceeds any increase in costs. Steps you can take to scale your creative agency can take many forms, such as:
- Working on staff retention so fewer resources are wasted on hiring, and you can nurture those ‘rising stars’ to take your agency to the next level.
- Taking a look at your processes. Are any of them unnecessary? Where can your processes be made leaner, to save time, money, and leave plenty of space for your team’s creativity?
- Measuring the correct KPIs that will actually drive the results you want. I recommend focusing on a few core measurables to increase profitability, including Gross Profit Margin, Gross Operating Margin, Hourly Rates, Utilisation Rates, and more. You can read more about this by clicking here.
I’ve found that the ultimate goal for many agencies I work with is to increase profitability. Of course, the list above isn’t exhaustive, and there is no silver bullet for improving creative agency profitability! But, scaling is all about looking at how your agency can become more streamlined, efficient, and effective without adding too many additional resources. The result should be an agency that grows in revenue and profits in a more sustainable way.
In contrast to scaling, business growth is pretty linear. You add more resources such as people or cash, and your revenue should grow as a result. Pure growth doesn’t focus so much on optimisation of resources.
There’s usually not as much of a focus on innovation. Growth tends to find out what works and stick to it far into the future, even if there are better, more profitable ideas and solutions out there.
So, there is a clear difference between them. While growth is not necessarily bad, there is usually a limit to how much creative agencies can grow before things become too inefficient to be properly sustained. As a result, I always recommend that agencies focus on how they can scale things up, instead of simply looking at things in terms of pure growth.
What can happen if the two get confused?
If scaling and growth are confused, it’s often just growth that ends up happening. Of course, this isn’t all bad, as an increase in revenue and general business is a positive. However, if your costs are increasing in line with your growth, are you really going to be making much more profit?
I strongly believe that the vast majority of creative agencies have plenty of potential to be scaled up, instead of pure growth. But, just working on your growth instead of examining how you can scale means that your resources can hit a ceiling. After all, there’s only so many extra people you can hire, which ultimately limits the amount of projects you can take on. The projects you do take on may be rushed, leading to client dissatisfaction. Your staff are dissatisfied too, because they're having to work late to complete their heavy workloads. You start losing clients and staff, and what was once a profitable, growing agency starts to rapidly decline. Of course, this is a worst case scenario, but it’s a warning of what can happen if you’re not thinking about scaling your agency!
Creative agency owners who want to scale their business instead of grow it need to be one step ahead. This means being prepared for any issues before they arise. If you aren’t prepared, things can quickly become an emergency. And, often the only way to combat an emergency is with the easiest, quickest solution. While this may work, and even allow your agency to grow, it is often expensive and inefficient.
To combat this problem, agency owners need to prioritise working ‘on’ their business, not just ‘in’ it. I’m a huge advocate of this with the agencies I work with. The best way to do this is very simple, but I’ve found that few agencies actually have it implemented when I first start working with them. The answer is regular, structured management meetings, and I have written a blog post on this topic which you can read by clicking here. During these meetings, you can also work on how to ensure that any future agency growth is sustainable and more exponential than it would be if you just focused on pure growth.
Of course, you may also choose to work with a ‘scaling consultant’ such as myself, if you want guidance and practical support. I have more than 25 years of experience in creative operations, and can guide your agency through strategies for scaling, enabling long-term sustainable growth. To find out more about the way I work, please click here.