Growth is addition. Scale is multiplication.

“We’re not that.”

That was the answer I got years ago from a practice leader when I suggested we put two practices together.

We had an advisory practice built around one industry — real estate. We had another advisory practice built around a completely different industry — public sector.

Two industries. Two client bases. Two leaders. Two P&Ls.

And yet one core competency sitting at the epicenter of both: corporate finance. But at the level where the work actually got done, it was often the same skill set and sometimes even the same person doing the work.

So I suggested putting the two practices together.

“We’re not that. We’re an industry practice. We’re not a corporate finance practice.”

The leader couldn’t get there. And I know why… they wanted to run their own thing.

So we ended up with two smaller practices, neither of which advanced anywhere close to as fast as they could have. It cost us growth… but I learned a more valuable lesson through that experience:

The importance of scale.

What does scale look like?

Scale does not mean getting bigger.

Scale is what happens when you stop running things like separate pieces and start running them together. It’s putting practices, service lines, and offices side by side and asking what could be gained by combining them into one thing.

Growth is addition. More people, more offices, more services, more revenue. It’s linear.

Scale is multiplication. It’s structure, systems, and engines that let the same effort produce more than it did last year.

Scale is not an action. It’s an outcome — proof that your growth is repeatable and doesn’t depend on who’s sitting in a particular seat.

Why scale matters.

Scale results in two things: financial capital and intellectual capital.

Financial capital pays for the future — talent attraction and retention, and M&A down the road. Intellectual capital is the talent bench — enough great people generating great ideas and outcomes that compound over time.

A practice can only fund what it earns on its own. So people investments get deferred another year or work is declined because there aren’t enough resources available. I’ve watched offices sit on an island for years, too small to fund their own future.

Combine like practices and you get more people who can take on new opportunities.

Combine P&Ls and you get more profitability to make investments.

And you get real capacity. When everybody in two separate practices is running at 70% productivity, you have excess capacity sitting in both. Put them together and you actually use it.

The same people get pulled onto bigger work instead of sitting underused in two places. That’s where the profitability comes from — and how somebody in a smaller office ends up on work they’d never have seen. Building scale isn’t about reducing headcount or resources, it’s about creating more synergies and benefits that come from more collaboration.

The result of all of that? Growth.

The objections you’re going to hear about building scale.

“If I don’t have my own practice, I won’t be seen as a leader or subject matter expert.”

That’s a big leap, and from experience, it doesn’t track.

The market does want to see industry specialization. No question. But clients don’t care whether the person serving them worked exclusively in their industry or simply knows it cold and possibly works on something else. They just want the expertise to be there.

We need special knowledge. We don’t need a separate practice. And we certainly don’t need a separate P&L.

“I’m better because I run my own P&L that serves your industry.” The marketplace doesn’t think that way.

“I won’t be able to make my own decisions.”

Everybody likes to run their own shop and be the boss. Nobody has to say it for you to know that’s what’s driving the resistance. But the focus here needs to be on what’s gained by combining offices, practices, etc. in order to build scale.

Offices get access to the firm’s whole talent bench instead of whoever happens to sit near you. Practices get the benefit of collaborating with other talented leaders working on similar projects. Everyone gets the benefit of more financial resources to make investments in systems and technology.

It’s a team sport and the collective “we/us” has a lot to gain.

“I need people from my office. Plus, their culture isn’t ours.”

The office 30 minutes down the road isn’t a different world. In the technology age, everyone can collaborate just fine.

And look, I get that cultures differ if we’re talking about different regions or parts of the country. AND that’s a reason to do the work of integration, not a reason to think smaller.

From my experience, these sorts of objections are often unfounded. Sure, leaders in Wisconsin have some cultural differences from those on the East Coast. AND they still shared expertise, a desire to serve clients, and a desire to be successful.

Those values are more important than cultural differences or the physical location where someone sits.

How you actually build scale.

Take inventory. Go looking for like things in your organization. Same core competency, different wrapper. Same capability, different zip code. Similar offices serving similar clients in the same area.

Ask the market question, not the internal question. Stop asking “how are we organized?” and start asking “how does the market see us?” If the market can’t tell your two practices apart, you have one practice with two names.

Combine the structure. Keep the specialization. Putting practices together doesn’t mean you stop going to market as an industry specialist. In the case of the story I’ve shared, we were still going to attack the market by industry. The team behind it was just going to be one team instead of multiple.

Structure is not the reason you’re successful. Subject matter expertise is.

Redeploy what you free up. The whole point of building scale is to free up capacity and increase profits in order to invest back into the business and generate growth. That’s when you see the benefits of scale really show up.

The bottom line

Scale is a wonderful enabler.

But people get so focused on “what I run” and “what I lead” that they miss the forest through the trees.

We’re using this principle heavily at Nichols Cauley right now — finding ways to put things together to build scale, so we can accelerate investment, collaboration, and workforce planning.

It’s uncomfortable at times, I get it! And that’s why most companies won’t do it, and exactly why the ones who do will gain relevance and sustainability.

Go look at your organization this week and start searching for two things that are really one.

My question is: What would you gain by putting them together? And what will it take to do so?

That’s how you build scale that leads to growth.

With intention,

Alan Whitman
CEO at Nichols Cauley

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