Growing Pains: stepping up communications in the transition from scale-up
Almost every new business will face a pivotal decision – continue at a steady pace, or accelerate for significant growth.
The UK’s challenger banks provide a good example of organisations who have made the decision to go for growth. After establishing themselves and amassing a loyal customer base, Monzo is expanding to the US, Starling has raised £30 million to expand across Europe and business bank Tide raised £44 in Series B to increase its market share.
The motivations for embarking on a growth push will vary across organisations. It could be in response to pressure from investors, reacting to regulatory changes, product launches – or it could be that customer demand is soaring and the timing is right.
Regardless, transitioning for growth requires walking a very fine line. During this phase, every move is amplified, one mis-step and your customer base will switch to another brand, commentators will accuse you of selling out, staff could argue you’re turning your back on the company’s roots and culture, while investors will always strive for more.
It’s not an easy thing to achieve, as Monzo proved recently, when it hit the headlines for the wrong reasons by freezing consumers’ accounts without warning. While Monzo was actually complying with FCA requirements to freeze accounts with suspicious activity on anti-fraud, money laundering and terrorism grounds, the press and many customers were less than complimentary about how it handled the issue. It’s a classic example of brighter spotlight during the transition to growth.
Successfully managing this period requires a deep understanding of your audiences.
Customers don’t really care about growth plans, all they want is a high-quality product or service, and that the level of customer service remains unchanged.
Your employees require careful consideration. In their mind there’s something special about a start-up – a certain freedom to do things differently, a willingness to challenge the status quo and learn as you go. Start-ups aren’t incumbered by bureaucracy and process. This has several advantages. It is exciting for staff. Many relish the opportunity to build something new and work in this liberated fashion. It also allows open and honest conversations with customers.
This approach works well until a point. But eventually, every business will need to professionalise as it grows. As more people come on board, processes, systems and paperwork is needed to protect staff and the company. These new processes and systems can be seen as a negative by some employees who want to hang on to the freedom of the start-up days. Employees need to be engaged and consulted on a clear set of values and plan to maintain the culture. There will be negotiables and non-negotiables for both staff and investors when it comes to professionalising the business to grow at scale.
The organisation must make the right noise around expenditure, cost to headcount ratios and profitability for investors. Making public declarations around these metrics can unsettle employees and alienate some customers. Your business as usual communication needs to maintain the honesty and creativity that won your customers in the first place. But it needs to be supplemented with more sophisticated corporate communications. This is where WeWork went wrong – its branding and positioning resonated with the tech and start-up communities, but investors didn’t buy the hype. An IPO prospectus is a business document, not a marketing manifesto.
Communicating with authenticity to these three crucial audiences requires a strategy where corporate, employee and customer communications are entirely in sync. It’s about listening to target audiences, then using this to shape corporate narratives, develop thought leadership platforms and mobilise employees and external stakeholders.
Our StepChange Communications programme is designed to help businesses scaling fast to get the balance right – helping to professionalise corporate communications for the market and investors, while enabling organisations to maintain its roots and values.
Written by Mitchell Fox, Associate Director, Corporate & Business Communications