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How to manage explosive growth without the wheels coming off

T N Hari
22nd Feb 2016
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Some organizations (mostly start-ups) are fortunate to be at the right place at the right time where a service or product on offer witnesses a virality in demand. These are do-or-die situations, because if handled well, the rewards are disproportionate, and if handled poorly, a great opportunity is frittered away.

I have been a part of three organizations where the demand for an offering went viral and the scaling issues were well managed.

Here are some of the lessons I learnt:

Leaders of teams (including function heads) are often so obsessed with fixing mission critical issues that they just don’t seem to spend any time on creating capability and capacity.

As a result of this, they move from one crisis to another. Leaders who otherwise come across as smart, experienced and mature also don’t seem to get this. If left to themselves, they never get it or they get it too late. They move around like overworked zombies, completely stressed and burnt out. I’ve seen this so often that I can recognize this symptom well before it becomes an issue. You need to spot and flag such issues in teams. You need to relentlessly articulate why capacity creation is crucial in such a situation. You need to be ruthless in forcing function heads to step back, think of how their team should look like to handle the highly demanding requirements, identify the gaps, and then maniacally meet candidates and woo them to join. I have seen engineering and other function heads who are so deep into managing the tactical and mission-critical stuff that they do not even have the time to interview! Leaders who are in such a situation need to be coached to stop what they are doing, let a few things drop and have a razor sharp focus on building capability.

The lesson here seems pretty elementary on paper, but then most management lessons ARE elementary on paper. They only seem obvious in retrospect!! The fact that this issue is rarely recognized as a bottleneck for rapid scaling and rarely acted upon until after major mishaps is what makes it worthy of note.

The second lesson is really about the level at which you need to hire. Sometimes you need to hire below a current incumbent to create capacity and sometimes you need to hire above the current incumbent.

  • This is a crucial decision. Make a mistake here and the wheels could come off your growth story. You may have an operations head in your firm. Maybe the ops head has the inherent capability of continuing to lead ops into the next phase of the company’s lifecycle, but just needs to build a stronger team. It is equally possible that the ops head IS the bottleneck and does not demonstrate the ability to lead ops in the next phase. In such a case, you need to get a Senior Vice President of Ops or someone above this incumbent, and carve out a role for the incumbent in the new ops structure. The communication to the incumbent is crucial. Maybe she has rendered invaluable and loyal service during the prior phase. Maybe she will accept the situation for what it is and take a new role. Maybe even after all the communication and feedback, she will choose to move on. In any case, the hard decision needs to be taken.

I have seen companies struggle with this. There are some that do a better job of this than the others. These are the firms that invariably are able to capitalize on the opportunity ahead of them much better.

In a high growth (and often chaotic) environment, getting an enduring solution to any problem can be an excruciatingly painful process especially if it involves interfaces across multiple teams or functions.

  • You can work hard and find a solution, but the moment you take your eyes off it and start focusing on something else, the problem resurfaces. Therefore, another challenge in a rapidly scaling company is: How do you hang on to the gains you’ve made with such difficulty? The operative phrase here is “rapidly scaling”. In a company where scaling is slow, this is not a major challenge. Here are some lessons on how to do this:Simplify: The foundation of good execution is “clear and simple thinking”. The difficulty of execution increases exponentially as the complexity of the solution increases, and therefore, the tendency to regress is directly linked to the complexity of the fix that was put in place. The power of simplicity is never taught in any business school, and hence it is learnt the hard way. Most actually never seem to get this, ever. Minimize hand-offs and minimize processes that generate friction (and unnecessary activity – submission, authorization, verification, approval, etc.), however perfect they may appear on paper. Thinking simple, in my experience, is one of the rarest skills. And it has nothing to do with conventional intellect. It is about the ability to see the few things that really matter in any situation and relentlessly ignore the noise created by the many things that matter just a little.
  • Figure out if a problem is caused by people, process weakness or lack of automation support: Be careful not to fix a people problem with a process tweak or vice versa! This is fairly common. I can provide n number of examples, but I am sure anyone could relate to this with their own examples.
  • Structural changes are not sufficient: Consensus on structural changes does not necessarily mean that everyone involved has clearly understood the reason for the change (or feels deeply that this change is absolutely essential) or clearly understand what changes to their operating style they need to make for the new structure to take root. As a result, key stakeholders continue to do things that undermine a new structure. For example, a company moved away from a structure based on business verticals to a regionally integrated structure. The role of the business vertical heads under the new structure was purely strategic. They were no longer to be involved in the operational stuff that integrated at the region level. However, some of the business vertical heads continued to involve themselves operationally, as a result of which the regions found themselves a bit constrained and did not take complete ownership (which was really the intent of the new structure). Hand-holding and overseeing the behaviors of key stakeholders for a new structure to take root is a critical task for executive leadership.
  • Audit if the new process is working: Once a problem has been solved, ensure that there is an audit process that tracks this process. Some activities (especially those related to compliance and risk mitigation) are inherently boring and sometimes heavy. As a result, they need to be enforced through periodic audits. Some of these processes become super critical as an organization scales and comes under greater scrutiny, internally and externally.

Like most lessons in management, one learns them only by making mistakes or by seeing some of these situations first hand. Sometimes, knowing and recognizing some of the symptoms may be a little helpful. I hope these provide that little bit of help.

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