On Disciplining Without Punishment: How to Successfully Scale Your Business

My friend, PreScouter Founder and CEO Dinesh "Dino" Ganesarajah, and I met because we were both McCormick Fellows at Northwestern University. A Sri Lankan born and English-raised guy now living in Chicago, he's one of those resourceful, curious, good-humored guys who manages to do a million things in a day--and if it stresses him out he never shows it. As a fellow in the Kellogg School of Management (not the Medill School of Journalism), he used a $5k stipend the McCormick Foundation awarded to him not for research but to start up PreScouter back in 2010. I always enjoyed picking Dino's analytical brain about business, since he's always thinking about entrepreneurship, so I asked him to contribute this guest blog on how to successfully run a growing business. Thanks Dino!

Dinesh Ganesarajah, Founder of PreScouter

Dinesh Ganesarajah, Founder of PreScouter

How does one successfully scale a business?

You must master the art of moving away from being an individual contributor to being a manager. You have to move away from you being the sole person that does all the work to getting other people to do the work for you.

The better you are at getting other people to do the work, the more scalable your business is. The challenge in getting other people to do the work is ensuring they are going to produce work to the quality standards that you need. If they are not able to do that, either your business will suffer or you suffer. The business can suffer when clients recognize that the quality of the work is suffering and these clients will take their business elsewhere. You can suffer, realizing the person you have is not performing to the level you require, and so you compensate for them, taking on responsibilities that you hired them to take on to begin with.

So how do you effectively manage people to get the performance you need from them?

According to Dick Grote, who wrote the book “Discipline Without Punishment," one of the core techniques is “describing the gap.” Describing the gap is as simple as it sounds: as a manager you have to become very accustomed with routinely describing to your team members what you want exactly; setting expectations with them. If they do not meet these expectations, you have to be able to describe the difference between what you got and what you expected.

These conversations (where you describe the gap) become effective ways to continue to coach team members. They push team members to improve their skills and become more capable. This is because these conversations focus on very specific incidents or pieces of work and are focused on improving what happens next time (e.g. “I expected this to be done by Friday, but on Tuesday it was still not done”). These conversations are not about making judgements about a team member’s work values (e.g. “You are lazy”).

In addition, it is also important to explain to team members why what you are asking of them is important (e.g. “We need to have work done on time for clients to trust us and want to continue working with us”). It is also a good idea to gain team members' commitments that they will approach the work differently next time (e.g. “Will you to keep to deadlines in future"?).

What happens if the team member does not change?

In Grote's book, the author presents an escalating series of actions for each time a team member continues to make the same mistakes or fails to perform. Essentially, it is important for the team member to recognize that the second such incident presents a situation where the team members is not only performing inadequately, but is also not living up to the agreement made with you, the manager. Third and successive incidents call for more formal disciplinary action, such as write-ups.

Managing individuals' performance against expectations is not the only aspect of successfully managing team members. You must also be able to hire the right talent to begin with, motivate that talent, and coach and mentor that talent. However, performance management tends to be one of the most difficult parts of managing others. “Discipline without Punishment” provides a simple guide, and a set of ideas, for how managers can think about performance management problems.

PreScouter helps clients gain competitive advantage by providing customized global research. Over the past seven years, PreScouter has established a global network of aspiring and accomplished scientists, engineers, economists, analysts, and developers who share a common ambition: to apply their academic knowledge and problem-solving skills to challenges faced in industry. Dinesh Ganesarajah, a British entrepreneur and Founder/CEO of PreScouter, is working on building a platform that enables business professionals to get things done, utilizing their global network of Scholars at top universities.