The Nonprofit Operations Guide: Maturing / Scaling Up
Maturing organizations have committed to a strategy and are beginning to document their processes. They are characterized by a move toward consistency and measurement. Typically these moves are driven by external forces — a large grant or dramatically increased demand for services — but are sometimes undertaken proactively when leadership believes there will soon be a big change in external forces.
It is during this phase that the first operating model is often finalized and the operating system begins to solidify in alignment with the model. The big, disruptive decisions being made are less strategic and more operational.
Definitions
The operational maturity model, showing how an organization progresses from startup to well-established.
Maturation or Scale-Up Stage
An organization that has established exactly who it serves, what it does, and in what context during its early stage and has realized it needs to move away from a reliance on individualized efforts for at least its core functionality.
Maturation
The process of moving from individualized efforts toward organizational sustainability. Not all maturing organizations wish to scale — sometimes they only intend to grow, or only intend to become more efficient and sustainable at their current size.
Scale
With the social sector, “going to scale” or “scaling up” simply means adding the capacity to serve very large numbers of people sustainably and repeatably. It means you have figured out a model that can reliably achieve the desired results without having to go back to startup mode. An example of this is expanding to a new city by simply replicating your model and using the same metrics, processes and technologies as your original location.
Scale versus Growth
While there are no hard rules, scale implies that you can replicate your model anywhere that has the same need. Growth, on the other hand, means you’re serving more people but that another organization or another city may not be able to directly replicate your model.
Are you in the Maturation Phase?
A highlight from the operational maturity model that demonstrates scaling or maturing organizations experience the most decision volatility in their logic model and operating system.
Typically, organizations enter maturation or scale-up when they have succeeded as an early stage organization and are beginning to see demand for services that exceed their ability to provide them. When this happens, organizations may see an erosion of quality, or may find themselves working unsustainably hard to keep the same levels of quality they had during their early stages. Organizations can also enter the maturation phase because an external funder has identified potential and is willing to fund the organization specifically to help it achieve growth or scale.
The maturation phase is a time to focus on consistency, measurement, and management. When these foundations are strong, efficiency is much more attainable. For this reason, smaller organizations that don’t want to grow or scale but would like to achieve efficiency have to pass through a maturation phase.
Growing the number of people served without losing quality is not possible unless an organization can clearly state what “quality” is, how they know they’ve achieved it, and how they’re going to keep track of that information. Similarly, scaling is not possible unless an organization can clearly define how a new site or franchisee knows what success looks like.
Your organization is maturing if you meet several of these characteristics:
You have begun to hire managers, or define management activities for existing staff
Everyone in the organization can clearly state exactly who you are serving, what you’re doing for the people you serve, and (ideally) under what circumstances you serve them
You have some written processes, procedures, or how-to guides, but know they’re lacking and feel it’s important to start documenting more
Staff might describe themselves as overwhelmed, doing too many things manually, spending too much time on low-value activities (like compiling reports)
There may be generalized concerns about quality of services (though often there hasn’t been any actual erosion of quality, because people are working harder to avoid a drop-off)
There may be a lack of clarity on how you’re measuring program success, or exactly what managers are supposed to be monitoring, but leadership is beginning to agree that it’s important to make time to define these elements
Leadership, and maybe even some staff, are beginning to feel that letting everybody serve clients in their own way is causing problems that should be addressed through more standardization or oversight
Considerations for Maturing Operations
Understanding how maturing organizations are impacted in their strategy, operating model, and operating system can help an organization target their energy and efforts more deliberately to make improvements where they can, by focusing on adding capacity to areas that are most ready to be structured and standardized.
Strategy and Environment
Because the fundamental things at the top of your organizational layers have been decided, and the organization has board and executive commitment to your strategy, you are able to consider whether you want to grow, scale, or mature toward efficiency. None of these is possible to do effectively if the fundamentals of your strategy are subject to change.
The hallmarks of entering the maturation phase are that the entire organization is very clear on the mission statement (exactly what you do, for whom, in what context) and leadership makes decisions that more clearly align with mission focus. This paves the way for building infrastructure to support efficiency, scale, and growth of that mission.
Operating Model
During your start-up stage, you were making lots of decisions about your mission to determine if you’re serving the right people and engaging in the right services.
As you start to mature, you know who you’re serving and what you’re providing, so the decisions you’re making are more about monitoring and ensuring the quality of service. You do this by defining measurement, management, and governance. While many organizations sketch out some ideas about how they manage the quality of their services during their early stages, they can’t commit the energy and resources necessary to truly incorporating those ideas until their strategy settles down some.
When the nonprofit sector talks about “capacity” and “sustainability,” it usually means both strategy and the kinds of governance and management that arises from a solid operating model. At its heart, the operating model is about achieving clarity in how you will know, today and over time, that your services are meeting your constituents’ needs. During your maturation, you define how you will know you’re succeeding, and how you will adapt to changes over time.
Operating System
The maturation process is one that, when done correctly, still deeply values thepeoplewho provide your organization’s services, but becomes less reliant on any one specific person.It is a difficult time that can leave the entrepreneurial, “all in” people who got you through your early stage chaos feeling like you want to clone or replace them, or feeling too tired to tackle yet another initiative.It is important to be respectful of this dynamic, name it, and help people understand what’s happening in the organization at this time.
During the maturation phase, capturing and documenting your processes and ensuring they’re aligned with your emerging operating model is your most important work, and your people are at the heart of that work. Having a neutral, outside facilitator to help with this process can make a big difference to ensuring it gets done correctly.
Many organizations want to jump right in to buying new technology during their maturation phase, and often have legitimate and critical technology needs. Be aware that maturation is often a time that organizations build or buy one to throw away and that’s not only normal, but useful. In reality, you don’t throw away what you build during maturation, but you can and should iterate on it later and may make significant changes.
Technology rigidly enforces whatever you tell it to enforce, which leads to efficiency when your operating model is solid and you know exactly what you need to enforce. Because the maturation process is all about experimenting with and making decisions about what you need to enforce, your technology is going to reflect that chaos for awhile. We recommend entering all technology purchases during the maturation phase with an understanding that the systems will likely not be your final systems, and you will likely spend money now and more money later before achieving the desired efficiencies and cost savings.
Myths about Maturing Operations
Myth #1: We’re out of early stage, it’s smooth sailing from here!
I’m sorry to tell you this, but all that hard work you’ve put in during your early stages is only beginning to pay off when you enter maturation. Maturation is an extraordinarily risky time for any organization. Assuming that you’ve weathered your early stages and have established a strong offering that has a strong business model, the key to maturation lies in leadership holding the tension between the urgent need for cash (while growing, scaling, or otherwise investing in maturation) and the strategic focus required to mature. The biggest temptation during this phase is to continue to “experiment” like your early phase days, and accept cash for activities that are not aligned with where you’re going.
With nonprofits, the most common threat to maturing organizations is the link between funding and strategy. Even though it was published over a decade ago, the SSIR’s Nonprofit Starvation Cycle is every bit as relevant today as it was in 2009. The Starvation Cycle leads organizations to seek funding for their survival, rather than their growth and health during maturation. Unfortunately, the more an organization is dependent on the funders’ views of what programming should be, the more misaligned operations can become, leading to perpetual challenges more common to an early stage, rather than a maturing, organization.
Maturation is marked by an increased rejection of non-aligned work, which allows your organization to focus all of its efforts on operationalizing the strategy.
Myth #2: We got through early stage as a team, this maturation thing is no problem.
Leaders often don’t understand that maturation is a distinct phase in an organization’s lifecycle, an uncomfortable in-between that shifts away from an earlier reliance on individual initiative.
People have strong and divergent feelings about this process. Mature organizations can feel boring or stifling to the kinds of people drawn to early stage organizations, while maturation comes as a huge relief to others who have simply been enduring the chaos and waiting for things to settle down.
Documenting everything and aligning the daily work with evaluation criteria can feel threatening or insulting to the people whose initiative, independence, and good judgment you’ve relied on to get this far. The lack of that documentation and alignment, however, makes it almost impossible for a growing operations team to feel safe in executing their daily tasks, because there’s no clear guidance.
You need a lot of individual energy in this phase, but individuals’ energy can be focused on activities that threaten maturation (like doing a great job for clients but not conforming to new rules or metrics) or support maturation (like adopting new practices and providing feedback on the new rules). You need entrepreneurial, problem-solving zeal, but focused on solving the problems of maturation rather than exploring new, non-aligned activities.
Maturation is like a person’s teenage years — awkward, uncomfortable, potentially tempestuous, and temporary. Your early stage team is often the right team to move through maturation, but the process can be aided by role clarity, a broad understanding of what’s happening, and open dialogue about individual contributions versus organizational sustainability over time. It’s a leadership challenge as well as a staff challenge. Mentors, peers, and professional facilitators all have a crucial role to play in helping an organization succeed in this phase.
Myth #3: All organizations must seek growth and/or scale.
Growing and scaling are strategic decisions that are informed by the people you serve and the funds available to serve them. Your organization may decide to grow when it’s clear that there is persistent, ongoing demand for your services, and funding available to ensure the necessary staff, processes, technologies, and facilities to serve more constituents than you’re serving now. It may decide to scale when it becomes clear that it has a unique and reproducible approach to solving a problem that other organizations in other cities haven’t yet solved, and funding is available to support that move. It may decide to grow or scale first and seek funding, or it may receive funding first that prompts it to grow or scale.
Seeking growth and scale is one of two primary reasons that organizations enter the maturation process. The other is typically because the organizations wants to stay small or local but work more efficiently. Many organizations do not seek growth or scale. Small local businesses, family-run shops, and small local nonprofits are a vital part of a healthy ecosystem. Scaling and growing takes a significant investment of time, money, and energy and is not the right fit for everyone.
Even when they’re not seeking growth or scale, many organizations do reach a point that drives them toward the maturation process. There is not a clear time, money, or size indicator of when an organization should begin maturing.
Scale, growth, and maturation are deliberate, strategic choices that are not right for all organizations and should be entered into with the same degree of thought and planning as any other major strategic choice.