In the vacation rental industry, we frequently hear chatter about scaling businesses. The topic of scaling is a nebulous idea that may leave some business owners perplexed about where to begin, whereas others are eager to focus their attention on it. The first rule of scaling is this: Business owners must have the desire to scale.
Often business owners confuse the difference between growth and scaling their business. It’s easy to misunderstand. The phone is ringing off the hook, the email accounts are blowing up, and everyone feels the sales growth. The increased revenue certainly supports this story line. At this juncture, business owners have a decision to make: Do we hire another employee to handle more work, or can we afford to wait and design a strategic plan to scale?
The trick is finding the sweet spot between increasing your revenue and keeping costs low with an effective operations plan for staffing. When business owners are prepared to scale operations, they are equipped to handle a growing volume of sales in a cost-effective and efficient method of continuing to be competitive in the marketplace. Scaling your operations with a strategic plan for staffing is a specific component of the process.
1) Design a Strategic Plan
Good plans have a one-, two-, and five-year strategic outlook with correlating operational tactics. In addition, a strong plan will allow your business to fully utilize technology and automation, identify your competitive edge, draw your attention to the right things at the right times, focus on the right people (homeowners, guests, and employees), and build your network.
If you are in the weeds and practicing a hands-on approach—processing details and managing employees—it can be difficult to zoom out to the 30,000-foot level to think and plan, especially to identify patterns and execute visionary work.
Part of the scaling process is to identify methods for automation to free up your time and that of key staff. Research from the World Economic Forum predicts that 42 percent of workplace tasks will rely on some form of artificial intelligence or automation by 2022. Business owners and employees have opportunities to build trust during this phase through delegation of responsibilities for certain necessary tasks. Focus on how best to use technology to free up your time and build confidence in your employees’ knowledge and skills.
2) Know Your Competitive Edge
Know what separates your business from your competitors and what separates your business in the eyes of your homeowners, guests, employees, and applicants. Take this one step further— know what separates your employment model and culture from your competitors so you are the employer of choice for attracting and retaining talent.
Growing and scaling are both exciting and stressful times for employees. When you understand the core strengths of your business from multiple perspectives, you are ready to build your plan while keeping your competitive edge top of mind.
Define your service brand and roles for each functional area of your business and how they relate to business owners, employees, homeowners, guests, and vendors. Your business will need functional and structural organizational charts for each year of the strategic plan.
The functional chart is your road map: where you’re going and how your plan will work broadly. This living document may change every year or more during the scaling period. Your structural organizational chart shows how you’ll get to your goals through process workflow. It allows you to plug in position titles, build roles and responsibilities, create supervisory and direct reporting systems, and develop current and future job descriptions.
Being flexible and dealing with growth simultaneously can prohibit your ability to see the big ideas. Use organizational charts, flow charts, and other organizers to get out of the weeds. Going back and forth between graphical organizers and visuals, writing and reading documents, and talking in small groups can support a team that is stuck or indecisive. Be cautious of rigid thinking or a sticking-with-the-plan attitude.
The strategic plan needs to be replicable and agile enough to be responsive to changes in real time. Businesses that are successful with scaling are flexible, responsive, and realistic as time goes by.
3) Manage Performance, Not Behaviors
Why is performance management important? It’s simple. Happy employees mean happy owners and guests. When reflecting on your performance management process, evaluate the answers to these key questions:
- Are your performance reviews driving the behaviors needed for your employees to succeed?
- Are you focusing on past performance or coaching toward future performance?
- Are your employees meeting and exceeding their goals?
- Are your employees provided with timely and relevant information regarding internal promotions and succession planning?
Managers and supervisors in all industries need to become more agile when managing performance. Agility allows you to rethink your company’s process. In the past, performance management has been a planning-based approach governed by goals and a scoring system that rates performance with a score or sometimes on a scale. And it has happened annually—once a year.
Research tells us that this performance model has become antiquated in some ways. The structure and results are fine, even helpful. The issue is that employees desire to grow. They crave real-time feedback on performance. They want to know when something was off or if their work produced erroneous results.
Employees have accountability when given the chance to correct performance sooner rather than waiting for an annual review. Involving your employees in managing their performance will drive their accountability, ownership, and engagement. They also want to know when they did well, so be specific and accurate.
The truth is not all of your employees will be on board with scaling your business. That’s OK. Don’t be afraid to let people go with integrity. People who are not behind the changes and your vision will harm your company with negativity. They will affect internal morale and attitudes. Some of this negativity could reach your guests or affect your brand. Employees, especially leaders, must be aligned with the company vision and serve as cheerleaders of the strategic plan and its tactics for scaling.
4) Invest in Training and Development
When rolling out scaling plans internally, inform your staff of your mission, and gain their trust and support in advance. It takes time and doesn’t happen after one or two big group meetings. Making time for consensus-building conversations and planning meetings, be they company-wide, in department groups, or one-on-ones, is critical to managing change. Don’t rush this process. When you are open, transparent, and honest with your employees, they will appreciate your approach to keeping them informed and will work with you to support your plans.
Your organizational culture becomes critical at this point. Ensure your culture, processes, and communications are consistent across all touch points—from employees to homeowners and guests and from existing employees to new hires.
Focus on the right people. As the unemployment rate in local markets challenges employers to find talent, start focusing on the talent you have in the workplace today. How can you best invest in their training to develop their skill sets to meet future business needs? How do you invest in transforming employees into managers and leaders?
Developing talent from within your company will free up entry- to mid-level and seasonal positions to attract new talent. At the same time, current employees have opportunities to grow their careers and develop their knowledge and skills.
Retain your talent. Find ways to engage and retain those employees who know your systems and internal processes, understand your brand, and represent key competence in the following areas:
- Adaptability—can they maintain focus and a positive attitude under pressure?
- Customer service—how well do they interact with homeowners, guests, and their internal customers (employees)?
- Emotional intelligence—how well do they manage their emotions and the emotions of others?
- Problem-solving—how adept are they at assessing situations and fixing small problems?
- Communication skills—how well do they express themselves one-on-one or in groups?
Train your leaders on expectations and operations, and then train your people. Consistency through this procedure during the onboarding of new hires is critical. Pair a new hire with a mentor; mentors will grow while reinforcing their own rediscovery of the business and gain confidence from being a mentor through the scaling period.
Develop a strong, consistent, and documented onboarding experience for new hires. Have the first day of employment planned well—seriously. Write out a task analysis for the first day, and identify key indicators to gauge the onboarding process for the first week through the 30-, 60-, and 90-day benchmarks. At 90 days, conduct a stay interview. Find out what you’re doing well and not so well. Adjust the new hire process based on information gained, and ensure adjustments are aligned with strategic goals.
5) Focus on Team Building
A cohesive team will meet or outperform your expectations consistently. When you train your leaders from within and recruit for company culture and fit, your guests, homeowners, and employees will experience stellar customer service and feel valued within your business model. You are creating a win-win situation for all parties.
Core employees execute their essential duties flawlessly most of the time. But when employees make mistakes, teams can pick up the slack and correct the errors with almost no detection from a customer. Every guest service touch point is important; if your employees make mistakes, let the team correct the situation. It’s an opportunity for the employee who made the mistake and the team member who corrected it to learn more about your brand and delivery of services and products. Let them learn together, and avoid micromanaging the small stuff.
Find opportunities to be together as a team outside of work. Some business leaders take their employees to a local favorite establishment for happy hour, whereas others plan small hikes and pack picnic lunches to show appreciation for employees’ contributions. Whatever you choose to do, keep it lighthearted and appreciative.
Keep Your Company’s Soul
Scaling a business is complicated. Keeping the feeling of your company—its brand, service style, business model, intent, and mission—needs much thought and planning.
You’ve already identified what your company does well and your competitive edge. You have the right people and systems in place to support scaling. The elusive piece of the puzzle is how to do this while keeping your company’s soul.
The truth is that you’ve done most of the work. Your brand, systems, and people are the soul of your company. Your brand can scale, and your systems are responsive to growth and demand. Your employees have scaled by learning new software and building new processes. You’ve attracted, recruited, trained, reskilled, and retained employees. You’re working smarter rather than harder.
What’s the first rule of scaling? Business owners must have the desire to scale. The fact that you’re concerned about the soul of your company shows intent. Follow your instincts. Although you might not be able to maintain the exact model of your company before you scaled, you can maintain its soul with instinct, intention, and effort.
Brands are not static, and you should expect your company to evolve over the years. As your brand matures, be the architect of customer service and culture. Be accountable for internal and external forces that pull your company in the right or wrong directions, and make corrections quickly. Keep your company’s core values visible and practiced. Not only will you increase your revenue and ensure repeat guests; you will retain your talent and the soul of your company.