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Managing Scaling Challenges in Your Startup–Do you need Professional Managers to help expand?

Last week my wife switched job from a mid-sized, structured organization to a total start-up. During the usual “my-day-your-day” sync up evening session (apparently the core ingredient for any successful working professional marriage… wish iPhone had an app for that one!) she was beaming after day 1 at work. She went on telling me about how the new office is full of people ready to help in things beyond their usual deliverables. No one had structured performance benchmarks and everyone was expected to contribute to everything.

The Art & Science of Scaling
The Art & Science of Scaling

And I mumbled to myself… “Wait n watch honey wait n watch”. I’m not exactly a cynic. On the contrary, I’m more positive than ideally one should be (entrepreneur’s curse??). But having been part of an organisation that started as a 5 people hang-out into a 450 strong (including the subsidiaries i.e.) unit today, and having done that more than once, we have seen some very interesting times. It’s always been the same – the initial days a.k.a. the honeymoon, when everything was everyone’s job (it doesn’t matter who makes the bed and who does the laundry eh!); the dark ages – when the critical mass kicked in and the demons of “KRA”, “KPI” (and a host of other acronyms!!) kick in; and finally the structure – which comes as a dawn, a new beginning, when the dust settles, and if you have done everything (or some things) right to keep the best talent and values, you come out victor with a lot of pride for your work and place, a peaceful co-existence between teams (read “no hot potatoes between sales and ops!”) and a clear vision of where you want to be as an org. If you think this is very melodramatically put, then you haven’t seen the real execution of it J

So what happens when the dark ages move to the dawn of glory? Do you think you can pull it all off alone? So here’s a bunch of pointers on what we felt worked for us (or so we like to think) and hoping it makes some sense to you. Not trying to pen an ‘algorithm for scaling a team/business’, but just a few real-life learnings that might come in handy when you see the little home office moving into the 20,000 square feet compound.

First things first – Why do you need professional managers for your organisation?

Quick back ground check. Are you Super Man? Are you the ‘alpha’ male who understands HR and finance and operations and sales and product development and technology? Are you Super Man? (Just re-checking). If the answer to any one of the above is NO, then you as an organization need external assistance to scale.

So now you are at a point, when your model has clearly worked, business is growing, the enterprise is performing, the IP is getting built every day (note to self: thank god I lived to see the day when I am talking to an Indian entrepreneur audience in terms of Intellectual Property and not in terms of $ per man-hours), and the model’s been around long enough to prove that there are no issues on scale per se. At that point, you have 2 options. First, grow at your pace. Learn from your experience, implement it, make mistakes, learn from them, re-implement OR get a guy who’s been there done that (and has a t-shirt to prove it).

So if you still have it about doing it all yourself, give yourself a break and do the right thing. Get the Experts. They’ll help you grow faster. In short, Invest money to acquire the right knowledge set, rather than invest time to learn it.

Have you figured out the gaps?

Remember the time you had gone out to buy pants and came back with a shirt. And it left you with 3 shirts and no pants to go with any of them! Well before you go out there to seek the right people, please be very clear you are seeking the right people to do what?

Don’t ever fall in the trap of dressing up the organisation (unless there’s a particular reason to). Focus on the needs. Frankly, most of the time answer will be right on your face. Trends of chaos will start showing in the department where the infra is not adjusting to scale. You just need to be smart enough to read the signs to fix it before it gets to a point of redressal. Of course, bringing in professionals to set up new businesses will be completely based on your vision, with no in-house feelers to guide you.

I’m too small to woo this giant!

Back to the rhetoric – great people make great organizations (before the reverse cycle begins). Hiring the best talent is always the key and the biggest challenge, especially for young/adolescent companies. Beatles gave you the deepest corporate secret on organization building when they proclaimed “money can’t buy me love!” Great people, especially ones who’ve achieved a level of seniority, move not (just) for the money, but for the big picture. Show them the 70mm magnum opus you believe in. If you have faith in your baby, you’ll sure find the nannies! We survived the boom time hiring frenzies all around, by focusing completely on selling the vision to the people we identified and felt could add real value. Once you get the right guy, go bonkers. BRING HIM IN.

How do you know, who’s the best guy?
Unfortunately, there’s no rule-book for this. Only key is to interact. Chat-up, meet-up more and more. One thing we did right about hiring senior management was to have them take sessions with existing teams (who are supposed to report to him eventually), as part of the interview process. This serves 2 purposes. You learn about the comfort level of your team with the individual, which is super critical. Secondly, there’s a lot that can be learnt about people when you just observe them about how they act with their teams to be. Even if there’s pretence, some basic traits are hard to disguise. Reference check is another very important key. We went ahead to check facebook profiles, linkedin and other social tools to understand tiny little things about the individual. These small little details form the bigger picture, which eventually help you make the big decision.

Just an after-thought, it’s usually birds of feather flock together. Most of the time, you end up attracting people who are somehow quite similar to yourself.

Managing the current team…
You don’t bring Sunny Leone to the Big Boss’ house without making the hot bunch feel insecure! Your team has been with you through good times and bad. Techies have handled the admin roles; content has managed operations; Operations have made sales house-calls in time of need. You can’t discount those efforts all of a sudden and get a daddy on their head. That’s clear unfair. For someone who has been so close to the organisation, but in the process has somehow “marked his territory” around a few departments, it can be tricky to introduce a new show-runner. You have to be highly sensitive to the individual’s aspirations. A dialogue helps. Pitch is simple. We are a growing organisation which needs to scale. For that we need experience. If the person is aligned, has full support (and assurance) from promoters, and is given enough incentives (read stock-ops) to have vested interests for business scale, this should be doable (if not a cake-walk). For trickier cases, an option is to identify small units which they can still run as heads. Whatever you do, do not de-sensitize the old-employee comfort issue. As someone awesome had once told me, how promoters deal with their old employees is a key factor for the new employees to decide if they would put their soul into the organisation or not.

Get someone sensitive to the ‘stage of evolution’ of business
I’ve seen enough cases in life when process masters came, tried to build an Infosys structure in a lean-mean sprouting org and did more damage than good. Basic mechanics – bend a stick beyond its yield point, and it will break. So while zeroing on a key-man (/woman), one prime criterion should be to see if he/she has the understanding of sensitivities of early stage orgs. Usually, someone who has done it before is your best bet. This one is very critical. Best intentions fail to deliver just because the right things are done with wrong timing.

Getting someone aligned to your vision (SUPER CRITICAL)

It’s super critical that the person you get, is aligned to what you are dreaming of. Take your time to listen to his understanding of your plans. Getting someone who is not aligned to your business model or your plans can be catastrophic. Usually senior professionals are expected to contribute to future strategies. So Board room should not become a chariot where all horses are running in different directions! Also get someone who understands the nuances of your industry. Imagine a guy from a legacy manufacturing industry starting to contribute to an internet business. He doesn’t understand the importance of an internet enterprise. For him a facebook is an unthinkable phenomenon which is a hype that will die down. Where do you go now? Most of your energies will start going into putting points across which ideally should be an easy digestion. Furthermore, any negative vibe from senior management can do unimaginable (even if implicit) damage.

 

 

What if it goes wrong!

OK fine. I did everything right, but the new kid on the block, just doesn’t blend in. First and foremost, identify the issues. Try and fix them… in all earnest. If you cannot, get feedback from all departments to ensure it is individual issue. If it is, please redress! Fix it immediate. Part ways. Don’t hesitate because you took 100 days to close this or will waste another 100 to re-fill the position. When in doubt, I follow a simple thumb rule – Ask yourself: “what’s right for the organization?” If you are always answering that question honestly, you will never make a wrong decision.

If you get it right…

 

If you get it right, your organisation will zoom like the cars did when the nitro button was hit in “fast and the furious”! Fresh people bring in fresh ideas & fresh thoughts. They put the processes in place. They come and tell you things you are trying to solve have been figured out by industry right after the invention of basil soup! If you were somewhere hitting your local maxima and feeling good about it, the good guys will raise your benchmarks to help you aim for better. The pieces of the jigsaw start falling in place.

Organizations’ success is partially you doing the right things and partially fate. Your job is to do everything under the sun to give a 100% to the former. As for the latter, sooner or later it will have to come to your side if you are persistent enough!clip_image002

[Guest article contributed by Pankaj Vermani, Co-Founder & Chief Strategy Officer at Vriti. Pankaj is a B.Tech / M.Tech from IIT Delhi. Prior to Vriti, he was Director of Engineering at Tribal Fusion & Co-Founder / Director, Product Development at SeekNet Technolgies. Vriti is the second venture for him, the first one having gone through successful acquisition in 2005. At Vriti, Pankaj primarily leads the product strategy, retail business teams, pre-sales and customer relations. A product technologist at heart, he has multiple track records of building teams from scratch and scaling them. He is an active dramatist and performs regularly in Delhi theatre circle.]

Image credit: JMaz/Flickr

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