I was having lunch with a friend today, and we were discussing how does someone know when a person is scaling or not. Who will scale as the company grow and what stops someone from scaling further?
Some companies have early members scaling beautifully as the organization grows, while some don’t. A lot of smooth scaling happens typically when the company is growing organically and the growth rate is relatively modest (< 50% YoY). When a company is growing > 50% YoY, and in some cases, doubling or more, it becomes incredibly difficult for people to keep up with the scale of the company, as humans grow linearly, yet companies grow exponentially.
Below are a few questions to ask yourself to check if you are scaling with the growth needed and some tips and strategies to continue on the fast growth trajectory.
1. Am I “going horizontal?”
I came across the concept of “Going Horizontal” during 10xCEO program and we discussed extensively on how to make sure the executive team is continuing to scale at the right capacity level for the growth needs of the company.
The team internally might already be “over capacity” if the company’s growth rate is modest and the team is experienced. But if the needs for the leadership capacity emerging from growth out weigh the current capacity, then it will hurt the growth rate and the potential upside of the company as long as the leadership team is not fully built to handle the needs.
So we need to constantly ask ourself if we are going horizontal or not. So how do we know if we are going horizontal? Let’s continue to ask a few more questions listed below.
2. Am I able to unlearn and fire myself every 6 months?
Unlearning is such a powerful skill that all aspiring leaders should acquire. It gives you the freedom to adapt to the ever changing organization, with new people, new processes, increasing complexity, evolving culture, and changing roles & responsibilities.
I found this skillset to be repeatedly valid after interviewing a series of CEOs and executives, and especially the ones that scaled from the early days all the way to the IPO or late stage.
I asked the question “what do you think made you able to scale with the fast growth you’ve seen at the company, and not the other members?” The answer came back almost always along the lines of “I was unlearning constantly” or “I fired myself every 6 months” or “I had to re-write my own job description so many times over the years.”
They weren’t dwelling on their past successes, or best practices that made them successful to that stage. They did not repeat their playbooks once they got to the next level, and was able to innovate themselves with the new set of thinking and the skillsets that were needed at the next stage of the company.
“What got you here won’t get you there.”– Marshall Goldsmith
Don’t get complacent. Don’t repeat your play. Don’t let your ego get in the way of your potential. Fire yourself and restart from day one.
If you were to join the same company today, but with a fresh set of eyes and mind, free from all the curse of the previous success, what is expected of you at this role and what do you need to learn now to be successful?
3. Am I becoming the bottleneck or am I able to let go of things?
One thing that’s particularly hard in the beginning of the transition, especially if you were a highly contributing member of the team, is going from ‘knowing and being part of everything in the company’ to having a narrower (or shallower) visibility and control/influence. You may start out owning and doing a bit of everything, but as the company gets to the next stage, there will be a lot of many more things that needs to be done.
As we discussed earlier, the capacity of any individual will almost always be smaller than the need of a bigger organization. So as companies grow and each part of the business becomes more complex and requires deeper level of expertise, work start to become more specialized, and people end up owning (or influencing) more of a fewer things.
In the beginning, an early member would be selling, building, hiring, and fundraising, but as the company grows, some part needs to be let go and delegated/empowered to someone with more experience and expertise. Sometimes you need to work with someone even more junior than you and help them ramp up to delegate to them as well.
This can initially be extremely difficult, as you feel emotionally attached to those things and it has become your raison d’être. But if you need to be part of every discussion of a certain areas of business, you have essentially become the bottleneck of growth, and you’ve started to go horizontal.
4. Am I able to navigate between the abstraction layers?
As we’ve seen from the previous post on the 2nd management framework of abstraction and reduction, as the company scales, learning how to navigate between different levels of abstractions becomes crucial.
What’s even more challenging is the level of abstraction varies between the different parts of the business. Less leveraged teams (e.g. a team where headcount grows linearly with # of customers or revenue, such as sales) will see faster and higher scale of abstraction being introduced quicker due to introduction of management layers, whereas highly leveraged teams (e.g. marketing, product management, etc.) will see less level of abstraction due to fewer headcount, but the level of interactions per person within the company grows steeply.
So navigating the different levels of abstraction based on your team, and the other teams you collaborate with, will become more complex. And this skill will become increasingly more important as you scale.
Many people in their first-time scaling experience will often get lost in the level they need to operate in, either flying too high-level, when the important details are needed and processes need to be implemented on the ground, or staying too low-level, when a higher-level thinking and strategic discussions are needed.
5. Am I increasingly focusing more on myself than the overall company?
Here’s a great article about the emotional experience that someone may go through if they are not scaling with the company. The experience of these changes can be deeply personal and emotional, and unless you have experienced something similar before, there’s no shortcut to overcoming this quickly.
I often call this a “psychological injury,” and similar to how one feels after spraining their ankle or having a splinter in their finger, your attention and focus is all on yourself’s well-being and your aperture of the worldview narrows, and it takes time, conscious effort, and patience to overcome, and until fully recovered, you can easily get hurt again and go back to square one.
This is a natural reaction to any form of a strong pain, whether physical or emotional, and it’s deeply ingrained in our brain to help us survive.
As soon as one gets into this state of psychological injury, the person’s prefrontal cortex start to deactivate and your mental state traverses through limbic brain and stem focusing all of your energy towards self-preservation.
It’s very hard to see the world clearly without distortion when one is in this state, as all of the high-level thinking, reasoning, and self-awareness is deactivated and your entire energy and focus is spent on the survival of your (professional) being.
It’s important to have a trusted advisor (whether your mentor, coach, or psychiatrist) to help you get back up and bring back your best-self, and continue to invest in self-awareness and humility to regain a healthy and holistic view of the situation. This process can take months if not years, and it’s certainly character building.
6. Am I able to run through the old walls again?
This was a unique insight by the friend. Once we have been working at a company for sometime, we start to take the paths well understood, which is often beneficial to the company. These paths are based on the specific context of the company and its business.
Cognitive science has demonstrated that gaining ‘expertise’ in brains lowers the total amount of neurons used to do certain tasks, allowing you to stop wasting time on futile efforts and to operate in a near-autonomous way, so that your brain can run a lot more efficiently and you can make decisions based on habits and best practices that work extremely well in a specific context.
The problem rises when your company has reached the next stage of the company — usually triggered by number of employees and management layers, scale of revenue and budget, geography of operations and customers, and the growing complexity of the business — and sometimes these assumptions need to be revisited and the best practices need to be changed.
This can be quite difficult as the team is probably already used to doing things and collaborating in a certain way over the years, so you need to approach this from a change management process, but as an individual, it can be extremely stressful. It goes back to the lesson #2 above — you need to unlearn your previous practices and be able to run through the old walls again.
But this time, you know the wall is there and you’ve experienced the pain already, but you still need to do it again, and reach a different outcome based on the changes in the organization.
Most people who’ve been at the organization long-enough will either have lost the motivation or morale to do it all over again, so will often become resistant to change. And there’s a saying “change, or be changed” applies here.
All in all, there are many hurdles to scaling oneself, especially in a fast growing startup, and hopefully some of the questions and ideas listed above will help you navigate this extremely challenging, yet rewarding journey!