Navigating The Scale-Up Environment
The saying goes that the most efficient team size is 7. When the start-up reaches the size 7 x 7 (7 managers leading a team of 7) things seem (relatively) stable: there is not much structure in place, and the company operates on shared mental flows rather than hefty documentations but the machine seems well-oiled. It is somewhere between 7x7 and 7x7x7 that all hell breaks loose.
New people join to help with scaling up - sometimes from corporate environments - and immediately disrupt the shared mental flow ecosystem. Output speed increases dramatically and without the rigor of project management, clean data and centralized reporting things start to get out of hand. The old company essentially takes on a new identity but nobody is able to verbalize it; this affects both current employees and new joiners. Some employees that have been in the business for longer start leaving and with that historical knowledge gaps pop up. Commercial pressure comes along and some sub-optimal decisions are taken in the short term to make ends meet. Doom’s day scenario? Perhaps, but it happens more often than you think.
Meanwhile, middle management bends over backwards to meet targets without being able to provide clear guidance to their teams because the what and the how are not fully laid out. Mid-range chaos and the occasional burnouts occur. Employees in the operational trenches experience frustration. Output quality declines. The good news is that a number of books have been detailing how to cope with the growing pains of a scale-up, the most noteworthy being Scaling Up: How a Few Companies Make it … and Why Others Don’t. This is my official pledge to anyone joining or operating in a scale up to read it. The book fits software engineering start-ups like a glove, but its principles are applicable cross-industry.
If you’re operating in this transition between a start-up and a scale-up, don’t underestimate the power of OKRs that are cascading from the very top to the very bottom. This will create a sharper focus, will get everyone’s efforts aligned with the key objectives and will surface and address a lot of unclarity in between. Because the company operates in dog’s years speed (faster than a corporate mammoth would) OKRs might need to be defined quarterly or even monthly. Yes, read that again. Sure this takes a lot of time and alignment but better that than not being able to deliver on your goals.
Projects sit in a million different files across a range of platforms and nobody is able to explain any given topic end to end without pulling 10 different spreadsheets. Sounds familiar? Finding one good project management software, training your entire team on how to use it and the basic underlying principles and starting to centralize process flows will get you out of the gutter for a long time. All of a sudden the organization becomes transparent.
“In God we trust, but for everything else we need data. ”
You’re probably sitting in meetings debating which numbers reflect reality. Departments point at each other for inconsistencies and spend a lot of time and energy attempting to reconcile different versions of the truth. Investment in a robust data set, tools to maintain and query it and a team of experts to tie everything together is absolutely paramount at this stage. In fact, hiring a team of data engineers and data scientists (even if interim) to sort out this area while the company is still agile is probably the investment with the highest ROI. Good luck addressing this topic once the company has huge operations in place and you’ve pivoted in the wrong direction more than once. In this day and age, nobody affords not to invest in clean data, data tools and data professionals. In God we trust (not me), but for everything else we need data.
There is no company stage at which you don’t want to hire top talent and empower them. But in a scale up environment this a matter of life or death. With clear OKRs, widely implemented project management tool and a robust data set, you should focus on hiring for resilience, resourcefulness and versatility on top of subject matter expertise. Ask yourself throughout the interviewing process: Would I trust this person to run the show if I go on holiday for a full month? Will they be able to pro-actively check-in with me instead of me checking in with them? If the answer is no in both situation you might be setting up yourself for failure even if the candidate has a great set of topic-related skills.
The most underrated task is probably that of creating a clear set of company values. But how are the rockstars that you hired going to behave when you are not looking? Shouldn’t there be something guiding them just before they make a compromise, apart from their own common sense? And what is guiding them should also probably not be a generic: “do your best”, “act like a great team-player” or “be growth oriented”. You want to make sure everyone knows that you expect that decisions and debates are anchored in data. Or you want your employees to put your customer first at the expense of short term profit. Whatever it is, make sure it is precise and you repeat over and over again.
I don’t like it when people use phrases such as “surviving in scale-ups”. This suggests that scale-ups are about constant struggle and pain. However, scaling-up is the most exciting phase that a company goes through. Never in a company’s life, can you make such a wide impact and affect the entire future of what can be a hugely successful venture. Yes the workload is high and at times there is unclarity, but a few simple systems to govern it all can ease the way.