Operational Scalability: John Pringle of Vistage Chair On How To Set Up Systems, Procedures, And People To Prepare A Business To Scale
Be sure to recognize, acknowledge, and reward your team’s hard work and achievements, especially during challenging times. This isn’t the time to criticize. It’s a time to understand, to seek answers beyond your own, and to expand your team’s knowledge and skills. Appreciating both individual and team efforts can do a lot to boost morale.
In today’s fast-paced business environment, scalability is not just a buzzword; it’s a necessity. Entrepreneurs often get trapped in the daily grind of running their businesses, neglecting to put in place the systems, procedures, and people needed for sustainable growth. Without this foundation, companies hit bottlenecks, suffer inefficiencies, and face the risk of stalling or failing. This series aims to delve deep into the intricacies of operational scalability. How do you set up a framework that can adapt to growing customer demands? What are the crucial procedures that can streamline business operations? How do you build a team that can take on increasing responsibilities while maintaining a high standard of performance?
In this interview series, we are talking to CEOs, Founders, Operations Managers Consultants, Academics, Tech leaders & HR professionals, who share lessons from their experience about “How To Set Up Systems, Procedures, And People To Prepare A Business To Scale”. As part of this series, we had the pleasure of interviewing John Pringle.
As a president, CEO, and 20+ year senior executive in IT and business development, John Pringle has helped companies from start-ups to Fortune 500 grow, scale, and turnaround revenue to become among the most profitable and desired companies of their industries. His visionary ideas have led companies to scale from 6 figures to 7 figures and from 7 figures to 8 and 9, and he does it by combining a strategic approach using leadership, metrics, full stakeholders comprehension, and by adding in the fun factor that attracts the best of the best in staff and clientele and keeps them coming back over and over again, even in seemingly dry and mundane industries.
Having grown his last company from a six-figure single service business to a 7-figure diversified business, John Pringle sees business opportunities where most don’t, and he excels at creating relationships and joint ventures where brands soar to new heights.
John’s newest challenge is to launch a Vistage CEO Peer-Advisory Group in Southern California, coaching CEOs and business owners in personal leadership to foster company growth and scalability, capture increase market share, and create businesses that become legacies.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. It has been said that our mistakes can be our greatest teachers. Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
I was starting to have success with the launch of a fleet of rental pontoon boats and I wanted to build on our success to take it to the next level, do something unique and fun. I decided to design and build our own boat. We came up with the concept of designing a pontoon with a hot tub. We designed and built the boat that would hold six passengers with a full size hot-tub, cruising Newport Harbor. I felt it was a great idea, something really out there, that would truly differentiate us as a provider of nautical experiences. Think about cruising Newport Harbor, with a Captain, your own private Hot Tub, drink in hand, soaking in the day! We even went as far to hire models to sit in the hot tub, cruising Newport Harbor, during the cold month of December for the Newport Parade of Lights, in celebration of the Christmas Holiday.
I truly enjoyed the thought of designing and building my own boat. We engineered a vessel that would hold six passengers, 5000 pounds of water, a method to quickly heat the water and provide power to maintain heat and circulation while underway and dispose of the water after each use. The concept was good, the design was cool, execution was difficult, regulations became unbearable, and utilization/revenue was not keeping up with expenses or projections.
The funny part of the story: sometimes being way out there may not be the safest decision; however, ensuring that whatever you do, you do with quality, will pay dividends in the long run.
Having a quality-built platform provided the foundation to reinvent this vessel. We stopped, analyzed current market conditions, developed a plan for going forward, and executed the plan. Our new launch was a 12 passenger TIKI Bar, with Captain and First Mate to take passengers on a guided Tour of Newport Harbor with drinks in hand. This is now the second largest grossing boat in the Paradiso Charters’ fleet.
What do you think makes your company stand out? Can you share a story?
I’ve grown and sold three businesses in recent years, and in some cases, in conjunction with a 20+ year career in Fortune 500s, growing those companies from vision to 9 figures, and more. I’ve not only got the skills and business acumen to get you there, I have the experience to understand the pitfalls and obstacles you’ll need to navigate along the way.
As a newly establishing CEO Peer-to-Peer Leadership Group with Vistage International, we are keenly focused on business growth, product diversification, and scalability to take companies from low 7-figures to high 7 figures, 8 figures, 9 figures, and more. We are a group of CEOs who want to increase their leadership skills, business acumen, and decision-making capabilities. Our members become the types of leaders who can grow their company quickly, efficiently, and remain at the helm, or transition out, whichever they prefer.
You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?
- Process efficiency. At Paradiso Charters, we implemented new systems to ensure the effective allocation of resources such as our Yacht, rentals fleet, and human resources. The biggest issues were ensuring resources were not double booked and providing a clearer understanding of resource availability. We accomplished this by upgrading to new software and processes and standardizing our product line so that vessels could be used interchangeably.
- Scalable Resources and Expertise. At RCM Technologies, we implemented a new Oracle Practice, which brought in significant revenue, higher gross margins, and elevated our new “solutions business” model. We started by hiring and implementing an Oracle Practice leader focused on the implementation of financial applications. Once we landed the initial client (Screen Actors Guild), we were able to hire expertise to implement the financial application, leveraging knowledge and skill sets from Corporate’s Oracle Practice center. We were keenly focused on building a relationship with the manufacturer (Oracle). Once we had a foothold and built up our reputation, we grew the business by acquiring Soltre, an Oracle certified partner. We were able to win larger and more complex engagements and expand our service offering by implementing enterprise-wide solutions, which essentially grew our business from vision to 7-figures in the first year, followed by 8- and 9-figures in year two and beyond.
- Flexibility. At Spherion, we completely changed the business model from a staffing model to a higher-value solution-based services model — including e-business, software quality management, and enterprise application integration. Moving from an hourly model to a salary-based employee model significantly improved gross margins and provided the opportunity to focus on very specific product lines (skillsets and levels), empowering the sales team to sell solutions to customers with pain points that aligned to our services versus focusing on the client’s latest skillset du jour.
Leadership often entails making difficult decisions or hard choices between two apparently good paths. Can you share a story with us about a hard decision or choice you had to make as a leader? I’m curious to understand how these challenges have shaped your leadership.
While at McDonnel Douglas, when leading the Application Development Group, we implemented a methodology to prepare us for the implementation of a government material requirements planning (MRP II) system. This new system provided an enhanced application to increase efficiency on the shop floor. One of the drivers was to tie government purchased material to a specific aircraft build. The system was used to manage, optimize, schedule, and automate the shop floor.
Durning the implementation, we discovered the need to enhance our processes around Software Quality Management, by increasing testing effectiveness. What we found was that the testing process was very ineffective, lots of testing of the same path, rather than ensuring all paths were tested. We needed to implement something quickly that provided detailed information on a specific test case.
We employed a detailed process using “Function Points” and path analysis where each function was tested effectively and not repeatedly. This tedious attention to detail helped us become more efficient and effective in testing during implementation. Sometimes, the quickest route seems like the longest, most detailed route, but by getting useful data, obtained accurately, we saved thousands of man hours and improved customer perception and disruption to the shop floor.
Thank you for all that. Let’s now turn to the main focus of our discussion about Operational Scalability. In order to make sure that we are all on the same page, let’s begin with a simple definition.
What does Operational Scalability mean to you?
Operational scalability is a company’s ability to adjust its operations efficiently and effectively in response to changes in demand, growth, or size without incurring significant increases in costs or sacrificing quality, performance, and output. It’s about a company’s capacity to handle increasing levels of work, or its ability to grow, without being hampered by existing processes and systems.
Operational scalability can benefit a company in several ways. One, it allows for improved efficiency and productivity as the company quickly adapts its operations to meet changing demands or reducing bottlenecks and delays. This can lead to cost savings and improved profitability, as we experienced in nearly every one of the companies I helped grow to scale.
Secondly, scalability enhances a company’s ability to innovate and explore new opportunities, as it provides the flexibility and agility needed to capitalize on emerging trends or market shifts.
Operational scalability can also improve customer relations by ensuring the company can meet customer needs promptly and effectively, helping the company to remain competitive in a dynamic environment and lay a solid foundation for future growth and success.
Which types of business can most benefit from investing in Operational Scalability?
Nearly any business can benefit by investing in operational scalability, and in fact, many businesses require it for growth. Startups and small businesses often face rapid growth and fluctuating demand, making operational scalability crucial for managing growth efficiently while maintaining customer satisfaction. While larger public organizations need to invest to ensure a higher predictable growth.
E-commerce and retail businesses, which experience seasonal fluctuations and trends, can use operational scalability to adjust to changing demand patterns and improve customer experience.
Technology companies typically operate at a fast-pace and need scalability to stay ahead of competitors, adapt quickly, and continuously innovate to meet customer needs. Service-based businesses, such as consulting firms, digital agencies, or like my former yacht and Duffy rental company, rely on scalability to deliver increased services levels, based on a continuous increase of resources (boats) once a utilization level was achieved. And manufacturing and production businesses need scalability to optimize production, reduce waste, and respond to changes in demand effectively.
Businesses in dynamic and competitive environments where demand, technology, and market conditions change frequently can benefit the most from investing in operational scalability. It’s about employing the right strategy for your business’s unique goals and customer base.
Why is it so important for a business to invest time, energy, and resources into Operational Scalability?
Scaling operations enables a business to adapt and respond effectively to changes in demand, growth, or market conditions without incurring significant increases in costs or compromising performance. By focusing on scalability, a business can streamline its operations, improve efficiency, and reduce waste, equaling greater cost savings and improved profitability.
Scalability also allows a company to better manage its resources, ensuring that it can meet customer demands while maintaining a high level of service quality. Scalability can enhance a company’s ability to innovate and explore opportunities, as it provides the flexibility and agility needed to quickly capitalize on emerging trends and market shifts. It not only helps a business remain competitive in a dynamic environment, but also lays a solid foundation for future growth and success, which is the main point.
This is truly one of the areas nearly every business can benefit from in some capacity and my strong recommendation is not to ignore it, but rather lean on operational scalability experts to ensure you scale appropriately for your business needs and profitably per customer demand without overtaxing your team and resources.
In contrast, what happens to a business that does not invest time, energy, and resources into Operational Scalability?
A business that neglects to invest in operational scalability could face numerous challenges and setbacks in terms of growth, employee satisfaction and stress levels, product quality, missed delivery schedules, and decreased customer satisfaction.
As I stated above, operational scalability helps a business perform efficiently and effectively, adapting to changes in demand, growth, or size without significantly increasing costs or sacrificing performance. Without this focus, a business may encounter several issues. Inefficiency can become a significant problem as processes struggle to cope with the increasing demands placed upon them. This inefficiency can lead to increased costs, longer lead times, and lower customer satisfaction.
Additionally, a lack of operational scalability can limit a business’s ability to grow, as it may struggle to keep up with increasing demand, leading to missed opportunities and potential loss of market share. Resources, such as employees, equipment, and infrastructure, can become strained without scalability, leading to employee burnout, higher maintenance costs, and loss of productivity. Inflexibility in operations can lead to poor customer experiences, such as delays, errors, and an inability to meet customer demands. All of this can lead to dissatisfaction and the loss of customers.
Businesses that refuse to invest in scalability often miss out on opportunities for innovation and expansion. Scalability allows a business to increase agility and responsiveness to market changes and capitalize on new opportunities.
Can you please share a story from your experience about how a business grew dramatically when they worked on their Operational Scalability?
At Paradiso Charters, we were continuously investing in assets, in our case, that was rental boats. Growing our assets gave us the infrastructure to take advantage of an increase in sudden demand near the end of the pandemic. We were creative in our marketing, giving people a safe and sane way to get out of the house, be together in the fresh outdoors, and have an enjoyable time. By consistently and methodically adding to our inventory levels, we had the boats available when demand surged, and we got to put our product utilization to work. This helped us exceed our financial targets while our competitors struggled to keep their doors open. Creativity, timing, and readiness are key; these are a few of the foundations of success through operational scalability.
Based on your experience and success, what are the “Five Most Important Things A Business Leader Should Do To Set Up Systems, Procedures, And People To Prepare A Business To Scale”?
Setting up systems, procedures, and people to prepare a business to scale requires careful planning and execution. Here are five important things a business leader should do:
- Define Clear Goals and Strategies. Clearly define the long-term goals and strategies for the business, as well as the short-term tactics you will need to get there. This includes identifying key performance indicators (KPIs — what you plan to measure) and those milestones that will indicate progress towards the scalability you’re looking for. Having a clear direction helps align systems, procedures, and people towards your agreed upon objectives.
- Continuously focus on enhancing Scalable Systems and Processes. Evaluate your needs and implement scalable systems and processes that can handle increased workloads and growth without requiring a complete overhaul. This includes researching and investing in technology, automation, and streamlined workflows that can accommodate higher volumes efficiently.
- Build a Strong Team. Hire and develop a strong team capable of supporting your growth goals and objectives. This includes identifying and nurturing talent, providing training and development opportunities, and creating a culture that encourages innovation and collaboration. Be willing to “Top Grade” your team, get rid of the weakest performers, your team is watching you. A strong team is essential for executing scalable strategies and adapting to changing business needs. If someone isn’t cutting the mustard, you’re likely doing them a favor in letting them go from a role they’re not successful in, and you’re strengthening your team, while demonstrating your higher expectations to remain on as your company continues to grow and scale.
- Focus on the Customer Experience. Your customers are your gold! Take care of them. Understanding and prioritizing your customer experience and satisfaction may include evaluating current systems and processes and implementing new ones that enhance customer feedback, interactions, and innovation based on customer needs. A positive customer experience is crucial for scaling.
- Implement a “Plan, Do, Check, Act.” Methodology. This model has been around for many years: 1) Know where you are going, 2) Implement the plan, 3) Continuously monitor performance against KPIs, and 4) Act by adjusting the systems, procedures, and staffing as needed. This includes identifying bottlenecks and inefficiencies, and addressing them promptly, as well as adapting strategies based on market trends and feedback. Flexibility and agility are key to successfully scaling a business, empowering it to grow and thrive in a competitive market.
What are some common misconceptions businesses have about scaling? Can you please explain?
Business owners often confuse scaling as just another way to make more money, but it’s much more than that. It’s about growing your company and serving your clientele in a smarter, more sustainable manner.
One common misconception is that scaling means expanding quickly — or grabbing as much of the market share as you can right away, but it’s much more important to scale at the right pace. You’ll want to keep an eye on efficiency, profitability, and your ability to properly service your clientele. If you focus solely on revenue, you’ll lose as quickly as you win.
Another misconception is that scaling is a big event, a one-time thing every few years. In reality, it should be an ongoing process. You’ll want to keep adapting and changing to grow your business, and to meet the continuously expanding needs of your clients as your business grows. I often engage with business owners who think scaling means sacrificing quality in the short-term to meet the long-term goals, but that’s not the right way to approach it. Better is to maintain your high standards while you grow your business. Reputation is everything. If you sacrifice quality for quantity, your clients will feel it. Also, scaling isn’t the same for every business. What works for one company might not work for another. This is where business coaching and CEO Peer Advisory Groups, like mine with Vistage International come in. Getting guidance, feedback, and working through the struggles together as a team of noncompetitive experts can provide insights to avoid obstacles and roadblocks you may not have thought of. The variety of feedback you receive from coaching and peer advisory groups can provide you with a variety of perspectives to consider before you take your ideas to your own Board of Directors.
Lastly, some business owners worry that scaling means losing control over their niche. But with the right systems and processes in place, you can grow while still staying in charge. Again, the help of an advisor or advisory group can help you consider and address issues long before they become your real-world problems.
How do you keep your team motivated during periods of rapid growth or change?
Rapid growth and change can put your team on edge because they don’t know what to expect. Status quo is in the comfort zone and when that’s being challenged on a weekly, daily, or even hourly basis, the uncertainty can wreak havoc on your culture and team morale. I have found that a good mix of clear consistent communication, support, and recognition can keep your team motivated during times of rapid growth and change, and your team will thank you for it.
One of my key areas of expertise is team empowerment. By communicating often, authentically, and effectively, you can keep your team informed about your growth plans and the changes required to get there. Having your team understand their role in these plans helps them not only buy into the vision but also contribute to their own areas of expertise. Be transparent about the reasons behind the changes and how they fit into the bigger picture, then ensure your team has the resources, training, and tools they need to navigate the changes successfully. Ask for their feedback. Ask for their questions and concerns. The closer they are to the ground level of customer contact, the more insight they may have that could help you avoid obstacles. You may have the lead role, but they’re in the minutia and may have knowledge that helps you tremendously. Mentorship and group or individual coaching can prove extremely valuable in situations like this, as well as encouraging collaboration and fostering a culture of teamwork, where members support each other, share knowledge, and apply best practices together as a team. This should already be a part of your culture if you’re aiming for continuous process improvement.
Be sure to recognize, acknowledge, and reward your team’s hard work and achievements, especially during challenging times. This isn’t the time to criticize. It’s a time to understand, to seek answers beyond your own, and to expand your team’s knowledge and skills. Appreciating both individual and team efforts can do a lot to boost morale.
Celebrate milestones as a team. Track achievements along your path to success so that everyone sees the end goal and the progress made and what’s still needed to get there. You’ll want to keep your team motivated and focused on your end goal while relying on their expertise to navigate the roadblocks. Gain their buy-in by appreciating them and their perspectives. Seek feedback from your team regularly to see how they are coping with the changes and to understand any missing or additional support they may need, and don’t forget to lead by example. If you can demonstrate resilience, adaptability, calmness, and positivity in the face of adversity, change and challenges can influence the way your team tackles roadblocks. It’s a challenge to do this, because we’re all human beings, but culture is nearly always reflected top down. Your attitude and behavior will influence your team’s response and your leadership can either motivate or distract your team during times of rapid growth, change, and uncertainty. Challenges like this are some of the many topics we will address in my CEO peer advisory group. Leadership skills are not built and done, they’re continuously adaptable to the times, the problems of the day, your mood, what’s going on in your personal life, how your team is adapting to the changes you need them to make and so much more.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
Steve Jobs often said, “If you define the problem correctly, you almost have the solution.” This resonates with me because I believe the answers exist and can be found by asking the right questions.
I have found that the better we define the question, or the issue at hand, the better we can foster feedback from our stakeholders and peer groups. When we provide a clear understanding of the issues, we can leverage the insights of others. We show you how to do in my CEO peer advisory group. It’s a part of the Vistage process which leaders can bring back to their organizations. Asking the right questions in the right order can help us grow as individuals and as a company and can help each person involved become better leaders who develop teams of leaders who develop more leaders in the future. This all happens by asking the right questions in the beginning, and all along the way.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
“Follow your conviction.” When it comes to planning and ensuring scalability, there becomes a point and time when you either pull the trigger or put it on the back burner. After you have done your research and the numbers look achievable, and you know it is the right thing to do, then do it!
At Spherion, changing from an hourly-based model to a salary-based model was a tough decision. Corporate was suggesting we change; other regions were demonstrating success with the salary-based model. I was convinced that the salaried model would provide a higher level of stability, and that stability would provide the ability to build and grow.
You reach a level of success, stabilize it and prepare for the next level. My staff was against the move to the new model. Change is hard. They wanted to maintain status quo. Receiving feedback like, “It won’t work in Southern Calif.” was commonplace. On the other hand, I knew it was the right solution for building a scalable practice. I drew a line in the sand and after one specific meeting, we changed our business model. It was the right decision. We grew by more than 35% compounded for the next several years. The stability of our staff increased which led to higher, more predictable client satisfaction. It was a win all the way around.
Bottomline: listen to your team’s concerns and figure out ways to message to them to get the team bought in. If you have to force the new procedure, then do it. Cream will always rise to the top. It’s OK to let go of those who don’t want to adapt. Not everyone is meant to come with you. You want a team who is agile and can adapt to your company’s needs, demands, and growth trajectory. If someone’s an anchor dragging your progress, let them go, then watch your sales soar. Remember you team is watching.
How can our readers further follow your work online?
LinkedIn is the best way to follow me and stay up on the business education and insights I provide: https://www.linkedin.com/in/jopringle/. And if anything in this article piqued your curiosity, please reach out. I’m in the business of growing leaders who grow businesses. Let’s succeed together.
Thank you so much for sharing these important insights. We wish you continued success and good health!
Operational Scalability: John Pringle of Vistage Chair On How To Set Up Systems, Procedures, And… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.