The five tenets of building organizations for scale
In the virtual conference organized by People Matters, T N Hari, the Head HR at BigBasket shares little nuggets of critical insights for scaling-up.
1. Create a High Performance Culture:
a) Create a sense of speed and urgency: Set the pace, direction, and expectations in every interaction. The consistency of messages you communicate and the consistency of the expectations you share in every day interaction trumps vision anytime. Here are two messages (amongst others) that I have seen leaders obsessed with execution emphasize and repeatedly reinforce in every interaction.
- Get things done without follow-up. If you are responsible for getting something done, I don’t need to worry whether it would get done or not. If you can’t meet a deadline or a promise, come up and say it well ahead of time and ask for help.
- You will be held accountable even if everything is not in your control – because usually everything is NOT in your control. Request, collaborate and escalate, but don’t show helplessness.
b) Conduct Insightful Reviews: Of all the levers that impact execution, the most powerful one is doing insightful reviews. These are some of the 5 things that the best reviewers do.
- Love data, but data isn’t enough! Demand insights. How do the Insights translate to specific Actions? Who owns these actions? And what are the timelines?
- Share the Bad News! Always. The consequences of bad news being discovered later are far worse than if shared transparently upfront.
- Separate the short term corrective actions from long term fixes. Treat the two with equal importance.
- Identify the difficult problems and takes personal ownership for solving them.
c) Make Feedback a Way of Life: Say it if you like it AND say it if you don’t like it. But, the climate you create should be totally apolitical and transparent, so that the candor is taken in the right spirit.
- Feedback should be an easy and effortless process. Every feedback does not need a formal setting nor does it need to always be scheduled.
- Feedback should never be sugar-coated. Feedback should be so unambiguous that it must result in only one of the two things, namely, a) change or b) an acknowledgement from the recipient that she needs help in making the change.
2. Understand that there is an Intangible Cost of Under-sizing Roles
In a company I once worked for, one of the businesses grew much faster than we had anticipated. The complexity of operations and management increased multi-fold. We noticed that the operating and customer metrics were gradually beginning to suffer. Breakdowns and escalations became a regular affair. Senior management involvement increased significantly in the day to day operations. It was evident to me that the business head and his entire first line had suddenly become undersized and were struggling to cope with the complexity and scale. The business head thought that the fault was with some of his first line managers who he thought were unable to cope. Yet, he was doing nothing to either replace them or coach them intensely. For a long time the senior management too found it convenient to accept the argument that the problem was with the business head’s first line. One or two changes were made, but the changes were half-hearted and limited by the ability of the business head to assess and select the right candidates. Things did not improve. Customer complaints kept increasing and there came a point when it was becoming clear that replacing the business head was important for cleaning up the mess. This is a pretty standard symptom in high growth organizations – roles outgrowing good incumbents. Yet organizations take a long time to figure this out. I call this a “mature company syndrome” – in mature companies, roles rarely outgrow incumbents simply because the complexity does not increase faster than an incumbent’s ability to learn to handle additional complexity.
Right sizing a role is not about getting the right person for a role. Right sizing the role is about deciding the caliber of the person you want for the role based upon an intelligent evaluation of the kind of problems that the role holder may need to deal with based upon the anticipated growth and competitive scenarios.
To understand this in depth, read the following article: The intangible cost of under-sizing roles in high growth organizations.
3. Managing Phase Changes as the Organization Scales
A high growth start-up goes through rapid, and distinctive, phase changes. Different phases of growth present entirely different sets of problems. The relationship between the nature of the problem and the phase of growth isn't evident. There is no need to reinvent the wheel. This is a well researched topic, and this article by Larry Greiner beautifully explains it. You won’t fully appreciate this till you go through the experience yourself, but if you have read the article, the pieces of the puzzle become obvious when the early signs begin to show up. Making the transition for a founder is about learning to be an empire builder from being a creator/conqueror, without losing touch with the skills that can create and conquer!
Read this article for a deeper understanding: How a founder can bridge the gap growth without pangs
Some of these skills can be learnt. Sometimes, the founder might take a call that she is not the right person to lead in the next phase even though she may have done an outstanding job in the first phase and hand over the baton to another person and take on a different role in the organization. While the first three phases combined is broadly about creating and conquering, the next phase is about empire building.
4. Managing the “Disrupter – Stabilizer” Conundrum
There are two types of peoples in this world, namely disrupters and stabilizers.
- Disrupters: they are constantly challenging the status quo, even if means breaking eggs. In mature companies, some of the disrupters may even be seen as not being team players.
- Stabilizers: they are happy with incremental change and realize that disruption is a high risk game.
In the early to mid stage of startups, the disrupters dominate. The purpose and energy of a startup is derived by this motive to disrupt. The founders represent this culture of disruption. It is at the mature stage of a business that the stabilizers, mostly represented by professional managers, have a role to play.
There is something I would term as a Disruption Quotient:
The disruption quotient indicates the extent to which disruption is the key driver of a business. In the early stage it would be very high (may be 90 on a scale of 100). The ideal number to my mind at a mature stage is 50. If it continues to be well above this, I suspect that the centrifugal forces that create strong imbalance and instability will hurt the firm badly. If it drops well below 50, then the firm would have lost the ability to stay at the cutting edge of innovation.
If you want to understand this better, read the following article: Do founders have a role play after startup gets maturity?
Companies that can manage the disruption quotient, in my opinion, are bound to do well even after scaling. Founders do not live forever. Hence it is important to institutionalize a culture where disruption and stability are in beautiful harmony. I think Amazon has cracked the code on this.
5. And lastly (could have been the first), build an Awesome Team!
Due to a limitation in word count, I would recommend reading this short article. Five tips in building your awesome team
Seamless scaling isn’t easy. What I have shared in this article carries a lot of personal conviction, because I have been intensely involved in scaling and helping four start-ups exit successfully. And, this BigBasket is my fifth. A lot of what I have written has been learnt the hard way – making mistakes and seeing what has worked, and what hasn’t. I hope, my reader, you find this useful and can add a few tenets of your own!