Erasmus University has the largest academic research group on entrepreneurship in Europe, through its Erasmus Centre for Entrepreneurship together with the Rotterdam School of Management (RSM). In recent years, we have obtained a great deal of knowledge from research into the growth of companies and factors that influence this. Together with parties such as nlgroeit, we also share these insights in our programmes in order to support other companies in their growth and to increase their impact in the Dutch ecosystem.
Based on multi-year research into scale-ups in the Netherlands, a number of factors that influence the growth of these companies have been identified. Below we share the main growth factors of the scale-ups in our top 10.
1. Carry out the organisation’s core values in all business activities
The founders of successful fast-growing companies such as Coolblue and Youngcapital quickly realized they had to scale their DNA in the organization. When you grow into an organization with more than 100 employees, people increasingly ask themselves: “What do we actually do? And for what? ”. This was the reason for the founders of both scale-ups to take a step back and articulate the company’s fundamental identity: what determines what we are and what we want to do? What motivates us to work every day? What do we want to achieve? As Pieter Zwart describes the Coolblue identity: “We are not an e-commerce company, retailer or webshop. No, we are a customer travel agency. Because we organize customer journeys from start to finish, in such a way that it makes our customers happy and we earn from it.” Together with the employees, the corresponding core values of the two organizations were then determined and translated into concrete behavior in the daily practices. YoungCapital for example, built an onboarding programme around its core values, which is used by new employees to familiarize themselves with the corporate culture. This allows leadership teams to spend less time micro-managing behavior and more time focusing on strategic projects that shape the company’s future growth.
2. Put together your ideal growth team
Fast-growing companies are constantly on the lookout to find the right balance between driving and managing growth in their leadership teams. Usually different types of people are needed to stimulate and manage growth. People who stimulate growth continuously see new opportunities, they play to win and they work faster. However, they can also be more prone to making errors. This illustrates the necessity for a different type of personality for those who have to manage growth. They are more vigilant and take the time to bring order and discipline into the organization so that further growth of the organization is possible. While we see variation in successful growth teams with regards to personalities and leadership styles, they also have a lot in common. For example, what all members share is a strong understanding of the vision and fundamental purpose of the organization. And last but not least, they all have a huge growth ambition for their companies.
3. Know your growth formula (and know how to implement it)
In order to make a company scale-up quickly and continuously, top management must have insight into the growth formula of the company. In addition to scalable business models, successful companies such as YoungCapital and Coolblue have established early on what their growth formula is and how they can use it optimally. In the case of employment agency YoungCapital, this meant continuously expanding its candidate base, allowing the platform to present candidates of more and better quality to companies. This in turn resulted in an increase in the number of interested companies which in turn attracted new candidates to join the platform. As your business continues to grow, it is important to find new ways to implement your growth formula. However, the resulting rapid growth is also accompanied by increasing complexity of the organization and its processes. Understanding the growth formula can serve as a useful tool for top management to understand complexity and prioritize activities that strengthen the core of the company and enable further growth.
4. Involve your employees
Although the established core values help employees to connect with the organization, it is equally important to ensure that your employees understand the growth formula of the organization and know how to apply it in their own work. It is helpful to regularly communicate and share the growth formula throughout the organization. Successful fast-growing companies such as Coolblue and Takeaway.com go even further by striving to ensure that all employees understand the bigger picture presented with the growth formula. In order to achieve this, they use various tools that explain how each employee (with their specific roles at all organizational levels) can contribute to filling in the growth formula and the result that follows. This gives an explicit meaning to the work of the employees and increases their motivation to perform tasks and achieve the set goals, which all together enables rapid growth.
Prof. dr. Tom Mom, Prof. dr. Justin Jansen & Suzana Varga (PhD Candidate)