Each year for nearly three decades, the Metropolitan Milwaukee Association of Commerce has honored 50 companies in the seven-county Milwaukee region that have experienced rapid growth.
And this year, eight of them are alumni of the same Milwaukee-based growth training program.
Scale Up Milwaukee’s Scalerator is a six-month training program that teaches business owners how to position themselves for future growth.
It’s an initiative of the Greater Milwaukee Committee and although it’s only been around for three years, it’s already making a tangible impact on business growth in the Milwaukee area.
Of the 50 companies in southeastern Wisconsin honored by the MMAC in 2016 for their rapid growth, Able Access Transportation LLC, Clearpath Connections, Diamond Discs International, Hurt Electric Inc., RSP Inc., Scathain LLC, Superior Equipment & Supply Co. and ZMac Transportation Solutions all went through the Scalerator program.
“We are trying to make people louder about celebrating growth,” said Elmer Moore, executive director of Scale Up Milwaukee. “We think about making the region more ambitious and growth-oriented and part of that is formalizing and enhancing the access to resources, as well as the communication, between stakeholders in the ecosystem. It’s also working directly with businesses through programs like Scalerator to train them to grow. Our approach relies on the fact that companies and stakeholders within the region will advance growth when they recognize that they all have an opportunity and capacity to encourage growth in others.”
Two of the first questions Scale Up asks companies in the Scalerator program are: “What do you need to unlock growth for your organization?” and “What can you provide to generate growth?”
“We’re teaching companies to operate with a mind towards growth,” Moore said.
And that can manifest in many ways.
For example, when it comes to hiring, Moore said Scale Up teaches companies to seek out potential employees who will meet future needs, in addition to current needs.
“What typically happens for a company with $1 million to $10 million in revenue, they identify a gap in their organization and they hire someone knowing they could’ve filled the gap months ago. They hire that person without knowing whether they’ll be an asset in the future,” he said. “Hire for growth. If you’re a $4 million company, you don’t hire someone with experience in a $4 million company. You hire someone with experience in an $8 million company.”
Scale Up is built around a model developed by Daniel Isenberg, an author and founder of the Babson Entrepreneurship Ecosystem Project at Babson College in Wellesley, Massachusetts. Isenberg championed the idea of emphasizing growth and entrepreneurship among existing companies, not just startups, and creating a collaborative ecosystem of businesses in a region that are all aiming for growth and helping one another grow along the way.
Surveys completed by Scalerator’s most recent group of 18 graduates indicated the companies averaged a growth rate of around 19 percent from 2014 to 2015, the year before they entered the program, Moore said. While participating in the program from October 2015 through March 2016, however, those same companies grew by around 33 percent on average.
“That’s significant,” Moore said. “When we look at the aggregated numbers for the 45 companies that have gone through the program, since January of this year they have hired over 180 employees. That’s huge.”
One of those participants, a company called Scátháin that makes custom furnishings with metal, wood and mirrors, has already grown by 50 percent this year and expects to grow by another 50 percent next year.
Scátháin has a growing list of impressive clients, including Lambeau Field’s 1919 Kitchen & Tap, Harley-Davidson Inc. and Milwaukee Tool. Right now, Scátháin is in the midst of doing work for the new Milwaukee Bucks arena and a crop of hotels opening in the area.
Angie Kobernik, Scátháin’s business manager, said the Scalerator program helped the company patch up missing elements in its business strategy that would position it better for growth. For example, before going through the program, she said Scátháin wasn’t doing any marketing.
“Everything we were doing was word-of-mouth,” Kobernik said. “Doing that course, it forced us to look at where we wanted to be, and that was a major tool to get us there. It sounds goofy and ridiculous now (that they weren’t marketing), but when you’re in the middle of the mayhem of what you’re doing, it helps to have someone smack you in the head and say, ‘Hey, how about you look at the basics?’”
The program has helped create relationships with other companies in the Scale Up network that have been mutually beneficial for growth.
“We met this other company,” she said. “They needed to get rid of crates and we needed crates to ship (our products). And we’re getting crates for free now. Little things like that can make a world of difference.”