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Starting an ongoing thread about common mis-steps in scaling organizations. Planning to write as they come to me so they won't be in any particular order. For example the first one isn't the most important, it's just the one that came to me first.
These observations come from my consulting work in org strategy + coaching tech executives as well as from being in the industry a long time. They're trends I've seen, not singling out a particular person or company. If you think I'm talking about you, I'm not :)
Common scaling mis-step #1: Waiting too long to hire folks w/ experience in People processes and org strategy (culture, change mgt, etc). Hire much earlier & more senior than you expect. These folks will help you avoid costly People/culture related mistakes and scale more easily.
Common scaling mis-step #2: Seeing the org as static rather than a dynamic, changing entity. What’s good at the startup phase won’t necessarily work once you begin to scale. You need different processes. You might need new leaders. Change is the one constant in startups.
Common scaling mis-step #3: Not realizing that change has tangible + intangible impacts. It's not just the things you can see: new teams, policies. It's how you communicate changes, how people perceive them, etc. That "messy" people stuff really matters when it comes to change.
(cont) Change is most successful when both are addressed. It's helpful to see change as a transition. While change tends to focus on the tangible, transition takes emotional aspects of change (intangible) also into account. A fab book on this is Transitions by William Bridges
(cont) That book focuses on how individuals make transitions emotionally, not just the physical differences we tend to think of as the change. His book Managing Transitions can help in managing change at the organizational or team levels.
When making a change remember that a company is made up of tangible parts (the change) and intangible parts (how people process change). Addressing both will make the ride less bumpy and stressful for everyone.
By the way, DMs are open if you want to talk about these trends or share what's going on in your company privately.
Common scaling mis-step #4: Avoiding the hard(est) topics. A team won't be truly effective unless they can talk about the hard things. To scale effectively the team has to be willing to ask hard questions, even and especially the kinds that might involve egos and biased thinking.
Being able to ask hard questions means there's trust. A team that feels like they can't ask is a symptom of an environment that lacks safety. If people don't feel safe they won't take risks to avoid making mistakes. This can be deadly for scaling companies.
Common scaling mis-step: #5: Not recognizing implicit power structures. So common in scaling companies. It's important to dismantle outdated hierarchical structures that shut down rather than empower people but be wary of no or very little structure. It can lead to implicit power
Power structures that aren't explicitly stated influence how decisions get made. When they're unspoken it's like an invisible hand influencing the business. It can slow down product development, growth of the company, sow distrust and wreck your culture.
Worse, implicit power structures make people feel disempowered and gas lighted. (You tell them they have a say when they don't really). Over time it takes an emotional toll on your folks. This turns to apathy which is deadly for scaling companies.
Lack of structure at a small startup is normal. The risks of implicit power structures grow as the company begins to scale. If you're a company of 25+ and it's unclear how decisions get made or there isn't clear communication about them, implicit power may be a hidden influence.
A must read article that describes the impact of implicit power structures is the Tyranny of Structurelessness http://bit.ly/2ZfwYiQ
There’s so much to say about implicit power and decision making but I’ll leave it there for now. 
Common scaling mis-step #6: Not using your phase of business as a data point in your hiring criteria. Your culture isn't just about the norms, it's also includes the phase of business you're in. Each stage requires different kinds of skills and mindsets.
For example, people who thrive in the chaos of early stages may bristle against structure once you begin scale. If still finding product market fit, folks who need structure provided will be more likely struggle in that environment.
Another example I see a lot. Hiring folks who are excellent at delegating tasks (a skill often needed at large companies) for a role that requires more hands-on work.
They may be a great candidate...for a company at a different phase of business.
They may be a great candidate...for a company at a different phase of business.
Scaling startups can avoid mis-hires by codifying the skills, experiences and mindsets needed to help a person be successful and allow the company to get to the next phase. Do this before you start hiring!
Codifying this doesn't have to be a massive formal document that takes months to create. Have a conversation with the team to clarify those skills, experiences, mindsets needed at this time. Use that as a checklist of sorts in your hiring process.
Going back to mis-step # 2. Remember that orgs are dynamic which means constant change, especially for scaling startups. You can't just set and forget. Reviewing the criteria every quarter or two means your hiring criteria stays aligned with the current needs.
Some characteristics you might focus on in hiring:
- What happens when they’re faced with ambiguity
- How they deal with chaos
- How they handle rapidly changing situations
#scalingstartups
- What happens when they’re faced with ambiguity
- How they deal with chaos
- How they handle rapidly changing situations
#scalingstartups
Ask questions to bring out this information.
Ex: “How do you handle chaos?”
If it were me, I'd lean in and quietly say "I kinda love it." Then talk about how I love making order out of chaos.
That's what someone who deals well with the chaos of scaling companies might say.
Ex: “How do you handle chaos?”
If it were me, I'd lean in and quietly say "I kinda love it." Then talk about how I love making order out of chaos.
That's what someone who deals well with the chaos of scaling companies might say.
Instead of culture fit, focus on business phase fit. Assessing for this kind of fit makes hiring more effective, efficient and reduces mis-hires. Scaling is so much harder when you don't have a strong hiring process.
#scalingstartups
#scalingstartups
Focusing on business phase fit can even reduce bias in hiring. Rather than looking for someone they can "have a beer with" (often a sub for culture fit), the attention is focused on the mindset of candidates (ok with ambiguity, find chaos interesting, etc).
(That said, selecting for business phase fit is a tiny step to reducing bias in hiring -- it's not sufficient on its own. There are so many other things you can do. That's a tweet for another day, just wanted to mention while we're on the topic.)
A candidate's job history isn't a sufficient test on its own. Some folks w/startup exp aren't actually suited for it while others w/ a corp background may be. To assess business phase fit, ask questions to determine if their mindset is a match for the current business environment
Common scaling mis-step #7: No (or little) budget for leadership development. This happens so often even when companies have funding.
To scale a company you have to scale the leaders too.
Set a budget for exec coaching, exec team facilitation, etc. It's a critical investment.
To scale a company you have to scale the leaders too.
Set a budget for exec coaching, exec team facilitation, etc. It's a critical investment.
Leadership development is essential, especially for scaling businesses. Focused support allows leaders to scale themselves so they can take on additional responsibilities, team members and priorities -- without burning out.
Exec teams in scaling companies can be equally as tricky. Facilitation supports the exec team be more effective in communication, addressing critical issues & avoiding decision gridlock. The impact is felt by the entire team so it needs to be a priority.
Supporting leaders allows the company to be proactive
so it can scale more effectively and avoid culture/ other issues that arise when execs don't get enough support. When it comes to leadership development: be proactive not reactive.
so it can scale more effectively and avoid culture/ other issues that arise when execs don't get enough support. When it comes to leadership development: be proactive not reactive.
This mis-step is starting to reverse a bit. I'm seeing a trend of companies getting exec coaches after receiving Series A funding, often recommended by VCs. This is sound advice.
I know development for execs might seem elite but its beneficial for the whole team. Having more effective leaders means communication improves, collaboration is enhanced, the team has better management and a better overall experience.
Common scaling mis-step #8: Focusing on technical skills over intrapersonal & interpersonal skills during the hiring process. We think the biggest problems are technical, but often the bigger challenges are people and org related.
Scaling startups are a very specific environment. They can be stressful and are not for everyone. Being effective in these situations requires skills of working with others, managing stress, collaborating across the company, handling ambiguity and high rates of change.
Collaboration, high rates of change and an ambiguous environment all require strong intrapersonal and interpersonal skills. Technical skills alone aren't enough in scaling startups. Folks have to be able to deal with the stuff around the technical problems.
This mis-step is similar to #6 but this one highlights another aspect of hiring which often puts evaluation of tech skills over intrapersonal and interpersonal skills. At a scaling company these should be more equal. Yes, even for engineers.
Oh! Be wary of over indexing technical skills to the exclusion of more people related ones at all levels of org. If you want to give opportunities for growth and have an internal management pipeline be sure to interview for people skills when hiring individual contributors.
btw, research shows that having interpersonal & intrapersonal skills like emotional resilience, adaptability, collaboration, etc can also improve your overall work performance. This fab article by @anthilemoon has more details on the research and benefits http://bit.ly/396rsnO
When I say technical skills I don’t just mean engineering though that’s a place where it frequently happens. You can just as easily over index for technical aptitude in other roles like marketing, accounting, operations, etc.
Common scaling mis-step #9: Seeing the business as primarily about the code and those who create it. This leads to chronic under-investment in areas that can turn technology into a sustainable business: people ops, marketing, sales and operations.
The technical solution and devs are super important. It just shouldn't be to the exclusion of other areas that can help the business scale.
An example that illustrates this common mis-step http://bit.ly/2tvsOci
Common scaling mis-step #10: Promoting ICs into management roles without providing training. This causes stress on the new manager as they try to learn an entirely new job without support. Worse, the team feels the pain of this acutely.
It's so important to remember that being good in a technical role doesn't mean you'll be good at one that's more focused on people, organization and business. I know this isn't new and yet, it still happens all the time. You all tell me stories about it in DMs and email.
Another issue is whether folks promoted into management actually want the role. Being thrust into a role like this can radically shift someone's career path to place they don't want. Just because they're competent or show leadership don't assume that they want to manage others.
I was promoted into management because I started creating tools & processes to help the department get organized and was mentoring my teammates informally. Luckily I wanted to be a manager. Still, I didn't receive any training but it would have been so helpful.
Having training as a first time manager would have helped me know how to handle performance issues, have effective 1:1s, manage conflict more effectively and recognize common pitfalls to avoid -- reducing my mistakes and causing less distress to the team.
Common scaling mis-step: SPECIAL EDITION
A lack of information about company financial results especially after being open. This is especially relevant right now. There's a good chance they already know. Not being upfront can signal a lack of trust and sow doubt.
A lack of information about company financial results especially after being open. This is especially relevant right now. There's a good chance they already know. Not being upfront can signal a lack of trust and sow doubt.
While it might be hard for the team to hear tough financial news, they'll appreciate the transparency. Some will panic, but many others will turn to finding solutions. Instead of a few people around a table trying to make decisions you'll have a whole team working on solutions.
Right now, it's more important than ever to have open and transparent communication. I know what I'm saying might be difficult. It's worth it. There's so much uncertainty right now, removing even a little bit of it by sharing openly can help.
By the way, I am hearing lots of companies doing this which is so heartening. This is just a gentle reminder.
