How do you manage explosive growth without the wheels coming off?

Some organizations (mostly start-ups) are fortunate to be at the right time and right place where a service or product on offer witnesses 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 which 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 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 & woo them to join. I have seen engineering and other function heads that are so deep into managing the tactical and mission critical stuff that they do not even have the time to interview! Leaders that 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 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 a major mishap 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 SVP 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 & feedback, she would 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 are capable of capitalizing on the opportunity ahead of them much better. 

• In a high growth (and often chaotic) environment, an organization quickly feels the pangs of going from being a “big-small” company to becoming a “small-big” company. In this process, getting an enduring solution to any problem can be an excruciatingly painful process especially if it involves interfaces across multiple teams or functions. Pile-ups, process failures, frustration, two steps forward-three steps backwards are all common. You can work very hard and find a solution, but the moment you take your eyes off and start focusing on something else, the problem begins to show up again. 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 is “rapidly scaling”. Here are some things you should consider doing:

1. 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 skill. And it has nothing to do with conventional intellect. It is about the ability to recognize the few things that really matter in any situation and relentlessly ignore the noise created by the many things that don’t matter a lot. 
2. Figure out if a problem is caused by a people problem, 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. 
3. 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. 
4. Audit if the new process is working: Once a problem has been solved, ensure that there is an audit system that tracks this process. This is the most crucial mind-set change an organization needs to make when it is growing up from being a “big-small” company to becoming a “small-big” company. Some activities (especially those related to compliance and risk mitigation) are inherently boring and sometimes heavy. As a result of which 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. Large corporations do this well – so well that it engenders fear in the organization. Start-ups are at the other extreme where the concept of enforcement through audit is totally alien. A basic audit and review process needs to be quickly put in place when the start-up begins to witness explosive growth.

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