Operational Success in a Hyper-Scaling Fintech

July 15, 2022

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Operational Success in a Hyper-Scaling Fintech

It is no easy feat for a business to grow, especially in the extremely competitive financial services industry.  

20% of small businesses fail within their first year, 50% in five years of starting up, and 65% don’t make it to the ten-year mark1. Ensuring a business is set up properly to scale requires operational nous, and an operating model that is set up to handle the challenges that growth can bring.

All businesses will begin their journey as startups. As they mature and work to avoid being counted as a failed business, they will move into a scaling phase (and be known as scaleups), with some companies falling into the hyper-scaling category.

A startup is a business that is generally in the process of both defining and refining its business model, product and market fit, establishing new clients or customers and creating new processes. Often, these businesses will favour growth and innovation over profit.  

A scaleup will still operate in an uncertain environment, however, it will generally have an established business model proven by consistent revenue growth at around 20% per year. Additionally, a scaleup will have found a market niche, have traction with clients or customers, and has started building a core team of passionate people who often wear many “hats”.

A hyper-scaling business, such as Ozow, has the same characteristics as a traditional scaleup, but thanks to rapid innovation, grows at a massive 40% year-on-year, as opposed to 20%. In order for this kind of growth to be sustainable, the business’ foundations need to be rock solid.

For Ozow, we've been able to achieve the status of hyper-scaling as a result of exponential growth among all the key business performance indicators, but with a focused consideration given to building clear ways of working to enable this growth.  

To achieve 40% year-on-year growth and remain sustainable as a business requires dedication, and a great deal of hard work. There are various considerations to take to ensure success and, importantly, growth, is maintained:

Transparency

Everyone within the organisation needs to understand what the overarching goals and objectives are, so that there is alignment and collaboration as to why they are doing what they are doing. There must be awareness and understanding within all areas of the business so that employees remain engaged and committed to creating success.  

Communication

While difficult to get right, clear communication is something that every business, not just those in the hyper-scaling phase, should strive to achieve as it can be a powerful weapon in a company’s armoury.  

Communication is a broad topic, and needs to be managed from the perspective of a whole company, down to teams, and then individuals. To ensure healthy growth, a scaling business has to try to ensure there is a consistent cascade of information that covers good news, bad news, and everything in between.  

Having an effective employee engagement and communication strategy has proven to improve employee morale, satisfaction and productivity. As such, a firm focus on this during high growth periods should be maintained.  

Awareness

To manage a hyper-scaling business, teams need to have a strong focus on understanding and analysing their core operating data. This enables quick intervention, the ability to change focus if needed and to make decisions that can enable growth.  

Agility

Processes may, at one point or another, need to change in order for deliverables to get over the line. Strategic focus may also need to change – think Covid-19 and the effect that had on many businesses’ strategies.  As we move into an uncertain macro-economic environment, having an adaptable operating model will prove valuable.

Being able to quickly change things up, alter direction and refocus allows businesses to find the most efficient way of achieving success. Being open to different meeting cadences, changing of organisational structures, new automations and software, among others, allows employees to evolve with the business, rather than fighting against progress (even if unintentionally).  Never be afraid to constantly evaluate and even go back to basics.  

People

A great focus needs to be given to the employees who drive the business forward. Ultimately, they are the reason for any company’s success, so bringing on the right people who can positively impact the business and ensuring they work in an environment in which they can thrive is paramount.  

If a hyper-scaling business, especially a fintech, can get these considerations right, then they greatly increase their chances of gaining the ever-coveted status of Unicorn.  

-
Rachel Cowan, Chief Operating Officer

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