Having the founders depart was really a challenge, Schwartz said.
“When they were in the office, all the staff knew they were the owners. So they would interfere without interfering. So we thought they didn’t have to be in the office anymore. Today they have no operational role. They’re still on the board as investors. We’re happy and they’re happy. But it was a difficult transition to convince them it was good for the business.”
Another difficulty in growth is that doing new things can make your old metrics totally outdated.
Donna Boyer leads Blurb, a self-publishing platform that in 2010 was one of the fastest-growing media companies in America.
Recently, the company began helping its customers make e-books as well as physical books.
This new area of growth meant the company had to entirely rethink how it measured its own success.
“Our old metrics were about pages,” Boyer said. “That’s just not relevant now. The cost of our goods was totally different.”
“That led to lots of internal confusion… We were measuring average order value. Print books cost $50, $60, $70. E-books were cheaper. That gave everyone angst. Average order volume fell.
“We needed to change our metrics. Because the behaviour we wanted followed that.”
Dell’s chief commercial officer, Steve Felice, gave his experience of how growth requires totally new ways of measuring success.
“When I joined Dell in 1999, we looked at units. As in, how many computers did we sell? A computer back then had a very narrow price range, and was pretty expensive too. Close to $2000 in average price.
“So we could approximate the revenue by looking at units, which we did, every day. Today we hardly look at units. It’s irrelevant. Some units are $200, some are $3000. It doesn’t tell us what’s happening in the business.”
All three entrepreneurs agreed that as they grew, they had to add technology and processes to support this growth.
Schwartz said that while this slowed down growth for a while, it was worth it in the long term.
“As we started to scale the business, and using more technology and systems to manage things, we began to use revenue per employee as our metric.
“I can say that revenue per employee has doubled in the last three years. We’ve had a huge increase in productivity. And it’s all been technology-driven. As the company has grown, our human resources have evolved. The people we have today are more thinkers than doers. We use our systems to do the doing.”
Myriam Robin travelled to Istanbul as a guest of Dell, which paid for her flights and accommodation.
Myriam Robin is a reporter for SmartCompany and its sister site LeadingCompany. She has degrees in economics, international studies and journalism. She likes writing about businesses taking risks and doing new things.
