Why your heroics won't scale

Who doesn’t love a hero? ?When you're in dire circumstances they appear out of nowhere and save the day.? In the tech industry, like every other, there are heroes in every function.? There are sales heroes who find a way to close that big deal on the last day of the quarter helping us make the number.? There are IT heroes who find the needle in the haystack that was causing the outage affecting customers.? There are finance heroes who discover new funding methods to facilitate a strategic investment that was being shelved.? These heroes appear when we are near the end of our rope and they rescue us. Heroes exist in every function in every company and we love them.? However, if you are celebrating them and creating a culture of heroism, don’t be surprised if your efforts to scale your business through the growth phase fall short at some point.??

Why don’t heroics scale?

1. They aren’t repeatable and predictable.? Imagine a Chief Revenue Officer reviewing the forecast with the Board and showing the last 30% of the plan to make the plan coming from a hero because “someone usually closes a big one at the last minute”.? That’s not sustainable.
2. They can’t be taught to others.? The reason most top salespeople are not great sales leaders is because they possess a unique set of skills and instincts that drive them to meet and exceed their goals regardless of the obstacles in their way.? They often struggle to lead others who don’t have their natural abilities.? There is something innate in their being which they can’t explain, document, or teach to others.? Heroes don’t multiply.
3. Heroes are in limited supply.? Anyone who has been a hiring manager knows how rare it is to find that “Rockstar” or real “A player”.? There's a limited number of them in every role.? So, if you’re going to build a team, you will unlikely be able to fill all of it with Avengers.? You’re going to have to find strong performers who can be coached up to the portions of hero activity which mortals are capable of and which are repeatable.
4. They aren’t efficient.? What heroes do, by definition, isn’t predictable.? However, their use of supporting resources is.? They tend to consume any and all of them that they can, in a fire drill manner typically, to rush in and save the day.? If you were to field a team of Avengers, your CFO is unlikely to be your best friend when it comes time for funding the number of resources your heroes need to save the day.

The importance of sustained revenue growth.? McKinsey & Co. writes a thought leadership series called Grow Fast or Die Slow, originally published in April of 2014.? The foundation of this series is the detailed research they performed of 3,000 software and online services companies from the 1980s to modern day to find what the keys to value creation were.? The study had three key findings.

1. Growth trumps all.? It matters more than margin or cost structure.? Super growers (40%+/year) were eight times more likely to make it from $100M to $1B.
2. Sustaining growth is really hard.? Only 17 of 3,000 companies made it to >$4B in annual revenue.? One half of one percent.
3. There is a recipe for sustained growth.? It changes throughout the phases of a company’s lifecycle.

If you’re trying to grow and scale your business, COVID-19 era or not, I encourage a detailed review of this study and its ongoing updates.??

Aligning heroics to the right stage of your business.? If we agree that sustained revenue growth is the key to long term value creation and business success, as McKinsey has demonstrated, then it’s important as executives that we constantly think about: 1) how we are enabling that growth, phase by phase, and 2) what we are reinforcing as part of our culture.??

In the early days of a company’s existence, the launch phase above, heroism is a fact of life.? Every customer landed, every outage restored, and every customer saved is unique because there are no predictable processes or patterns.? Those come as you get more experience, more prospects, customers, employees, and partners.? It makes sense, then, that as you enter the growth stage, there are plenty of patterns observed across all functions of your business.? These patterns reveal what success and failure look like in sales, operations, finance, manufacturing, and more.? These patterns can be documented, packaged, taught, repeated, and even automated in some cases.? It’s this time, when your business begins to scale, where a culture shift from hero-culture to a scale-culture is most impactful.? Over time those patterns evolve or shift so a continued focus on process and improvement are required to ensure your business thrives for a long time from growth to maturity.

Ultimately, the heroes that are responsible for the long-term growth and scaling of businesses don’t wear capes or suits and they don’t save any one particular day.? They are in the background constantly watching for patterns, documenting success and failure, measuring productivity and performance, teaching others best practice methods, and innovating to remove friction from every part of the business in scalable, efficient ways.? When they roll out a new process or module to help the business, they deliver what growth-minded executives should celebrate.? Scalers are the heroes over the long term of the business lifecycle as value is created over and over again for shareholders and customers alike.

You are what you celebrate. If you’re in the growth or later phases of your business and want to effect a shift away from the hero culture, think about how you respond when a salesperson closes a deal not on the forecast, when they close it at a significantly higher amount than the forecast showed, or when they did it not following key parts of the process.? Is that the behavior you want people to emulate?? How you respond will send clear messages to all.? How will you respond when a leader is creating dependencies for their team to complete something, making themselves “gatekeepers” vs. attempting to simplify or automate it for others to do themselves?? If you celebrate these heroes in your culture, don’t be surprised if sustaining high growth becomes a challenge along your journey.

I’m not saying that we don’t need heroes.? Everyone is a hero in the launch phase of a company.? And, yes, there are many times along the journey even in the growth phase where we, in fact, need saving despite all of our best efforts to scale.? I’m just saying don’t count on the hero once you’ve entered the growth phase.? What if they don’t show up to save the day?? What will you do then???

I want to thank all of the leaders, mentors, and talented people I’ve worked with over my career.? You taught me what heroes are at $0 in revenue and how process and scale become heroic through the journey of growing a business to $2 billion.? I’ve learned the value of helping to make things move faster and more efficiently, what repeatability can do for scale, and how sustained high growth can drive both company and personal valuation.? These people know how to scale.

Mike Duffy, Lou Shipley, John McMahon, Carlos Delatorre, Jim Baum, Chris Reisig, Steve Papa, George Kassabgi, Tom Murphy, Patrick Morley, Kim Ann King, Tom Pisello, Bart Fanelli, Tom Schodorf, Godfrey Sullivan, Doug Merritt, Dave Conte, Susan St Ledger, John Sabino, Christian Smith, Dan Miller, Dave Caradonna, Andy Hershey, Chris Gilbert, Kevin Meeks, Anthony Palladino, Richie Berg, Scott Lewis, Kym Wood, Cody Harris, Wendy Wise, David Jenkins, Julia Kato, Gavin Edgley, Chris Rapaport, Rory Patterson