How to Grow a Service Business

How to Grow a Service Business

The previous article on IVY (Ideal Vision of Yourself) provides a good lead into this article.
If you have 10 minutes, give it a read.

Growth Struggles

As a service company tries to scale up, barriers to growth are encountered. Faced with these barriers, companies often drag out the usual suspects:

  • A lack of sales and marketing
  • A lack of desire among staff to improve quality and response times
  • Difficulty in hiring the "right" workers and the "right" managers
  • The need for more team building to correct "cultural" issues

Working harder on these usual suspects will rarely have a lasting positive impact. Most companies have already been trying without success, yet remain convinced that if they could just try harder, then eventually success will materialize. The struggle seems endless. Without any other option, they keep at it, day after day. What else can a company do?

To understand the true barriers to growth, it is helpful to first understand what growth looks like.

Understanding What Growth Looks Like

As companies increase in size, they transition through periods of slow growth and periods of high growth. This is a non-linear path. Instead of improvements happening incrementally over long periods of time, growth occurs in spurts, followed by periods of relative stability. These periods of stability are normal. However, they can become stagnant if permitted to last too long. Instead, the stable periods are opportunities to solidify the changes from the previous growth spurt, and to act as a staging platform for the next level. They should not be permitted to become the new status quo. In other words, while the resulting growth curve is non-linear, the growth effort should be continuous. Knowing why growth occurs in spurts, and understanding the barriers preventing the next stage, is key.

To help understand company growth patterns, the IVY methodology details 5 distinct levels on the growth curve, with entry into each level blocked by a set of well defined barriers. Companies are stable at any given level, but not as they transition between levels. During a transition period, as a company moves from one level to the next, the team risks sliding back, else it succeeds and reaches the next level, which becomes its new stable point.

PEARS is an acronym that provides a name to each level, which reflects how an employee feels working in a company operating at that level: Programmed, Educated, Autonomous, Respected, Spokesperson.

Five Operating Levels

Five Operating Levels

The graph above illustrates the PEARS growth pattern. The Y-axis represents growth and profitability, while the X-axis represents an increase in distributed decision making or empowerment. The more empowerment, the more profit. However, a deeper understanding is to view profitability and empowerment as natural consequences of something much more fundamental: IVY Alignment and IVY Opportunities. In short, IVY is an Ideal Vision of Yourself, and it is what everyone in a company is working toward. (No, their IVY is not to make your business grow and be profitable, not unless you have motivational alignment) See the previous article for a detailed explanation of what IVY is. In this view, the Y-axis is IVY Alignment and the X-axis is IVY Opportunities.

LEVEL 1 Programmed

Most companies operate in the Programmed level. It is similar to a command-and-control military mindset. The organizational structure is very hierarchical, and the resulting culture is one of fear and complacency. The belief is that people higher up in the hierarchy are smarter, and care more about quality, responsiveness, and customer care relative to people lower in the hierarchy. IVY Opportunities and motivational alignment are close to nonexistent at this level.

LEVEL 2 Educated

At this level, through increased trust, workers start being given access to previously siloed information. They are able to see the big picture and learn how their actions affect the whole. Information asymmetry and its negative effects are reduced. Frontline workers start to experience basic IVY Opportunities. Motivational alignment increases. Profit margins increase.

Level 3 Autonomous

Workers are now given sufficient tools and autonomy to make customer decisions without always requiring management's approval. The organization's hierarchical structure starts to flatten, and this changes the culture where previously management had a monopoly on decision making and customer care. IVY Opportunities become significant for workers and start to increase for management also. Motivational alignment starts to take hold. Growth accelerates as more and more employees start moving in the same direction.

Level 4 Respected

At this level workers have been elevated to being respected professionals in their fields, and are regarded as equal partners in making business process design decisions. The business process evolves without mandatory management oversight. IVY Opportunities and motivational alignment are at an all time high. Not only does growth and profitability continue to accelerate, company innovation, evolution, resilience, and adaptability are now an inherent part of the business. How the company does things becomes more important compared to what the company does.

Level 5 Spokesperson

Level five is truly extraordinary in that most everyone in the company are able to represent, promote, and share the unique views and culture held within their company. The employees are regarded as industry experts within their respective fields. The company is viewed internally and externally as an ideal source of IVY Opportunities for personal growth. Some employees are loyal for decades, others come in, grow, and move on, promoting the company as an ideal place to learn, to grow, and to purchase quality services from, second to none. Why the company does things becomes the focus.

Consider the following:

  • Responsibility isn't commanded, it is given.
  • Quality increases because the workers feel personally connected to the work they do, not because management says it must.
  • Response times improve because workers do not want to keep their customers waiting and not because management measures it and demands improvements.
  • Workers treat customers with respect, if they themselves are treated with respect.

In order for people to believe in you as a leader, you must believe in your people. Trust is a reciprocal relationship. Employees want the same things people in management want:

  • To have responsibility
  • To be heard and listened to
  • To have the opportunity to learn from success and failure
  • To be treated with respect
  • To have the opportunity for personal growth

Collectively, delivering the items above creates an environment rich in IVY Opportunities. This is the X-axis on the PEARS chart, and it enables companies to move up along their growth path.

Limited Growth

It may seem counter-intuitive that spontaneous, seemingly effortless growth is a side effect of the latitude you give your team. In other words, less effort gives more results. On the flip side, we all know that more effort can provide more results, however we often find these results are limited and short-lived. If growth and profit are forced, then these are capped by how much of your personal life you are willing to sacrifice for the business. It is an even trade at best, and more often a miserable existence of servitude. Ask yourself: Do you own your business (or your job position), or does your business own you? Are you able to walk away, and come back months later to find the business not only running as smoothly as before, but also running better than when you left?


PEARS, and the fundamental force underlying it - IVY - provides a clear path toward growth and profitability, without increasing measurement, control, discipline, enforcement, punishment, or ill conceived bonus systems. As a savvy business manager once said after success with PEARS "I've come to learn that this is more about letting go than anything else."

"I've come to learn that this is more about letting go than anything else."

The five distinct levels of PEARS provide an advantage because it enables us to focus on only the set of barriers between the level your business is on and the level you are trying to reach. Having a road map makes the journey easier, and avoids getting lost along the way. Each level on the PEARS road map becomes easier and easier to implement because each level frees up more and more time, and because all levels build upon the same fundamental concept: Creating an environment that allows people to become who they want to be – to achieve their IVY - inherently structures a business to run itself.