Scaling Challenge #1: Passing the Hat
AS a start-up, executives need to be prepared to wear more than one functional hat to be successful. As you scale, however, you must carefully oversee the process of passing those hats to new executives and managers that join the team. This looks easy on paper (just draw up the new org chart), but it can prove extremely challenging in practice. While it is easy to pass the hat in form, it may not be easy to pass the hat in substance when the on-boarding of the new hat owner is arduous, i.e., big learning curve, lots of important internal relationships, and so forth.
As long as the old hat-owner offers greater knowledge and effectiveness in the relevant ...view middle of the document...
Depending on the business model, there may be other functions along the way like business development, partner marketing, channel management, etc. It all sounds very logical and straightforward to the seasoned executive. However, it can come as quite a surprise to less experienced staff who have never seen, heard or worked with this new function.
If you’re a junior engineer who has never worked with a product manager before and you’re used to taking instruction directly from the CTO, you will have all kinds of questions and concerns about this new species of co-worker. It can even be quite confusing to the new product manager as the product management role at this company differs from past experience.
When you introduce a new function, don’t assume everyone understands what you are doing and why. Don’t even assume that everyone knows what it is. Some may think they know from past experience, but they still may not know what it is at your company. Every new function should come with clearly defined roles and responsibilities and these should be broadly and consistently communicated to everyone in the new function and everyone who must work with it to make the transition a success.
Scaling Challenge #3: Moving from People to Process
Passing of hats and the introduction of new business functions are natural consequences of growth and the increasing division of labour required to manage a larger organization. The result is that work that used to be done by individuals and small teams must now be done by cross-functional groups. This is one of the most subtle and treacherous scaling challenges. Subtle because it sneaks up on you. Treacherous because the problem and it’s potentially damaging results are always underestimated. You design your org chart, hire your new people, get the new team together and quickly discover that they have no clue how to work together effectively.
Take the simple process of creating a single Web page that describes your product. Whereas before a multiple-hat-wearing marketing director might write the content, create the design and even mock up the HTML before sending it over to your only Web engineer for implementation, your scaled up firm now has a product manager internally communicating the value of features and functions, a product marketer producing content for external consumption, a designer creating Web graphics, a Web team manager receiving these requirements, and a team of Web engineers from which to choose to assign the task, all of which are new and don’t fully know the code base yet. Just for fun, let’s say this transformation occurs over a one month period.
Moving from many individual contributors to cross-functional teams is an essential aspect of scaling. Teams produce more for less when they are working to a well-defined, well-understood process. You can’t just throw a bunch of new people in a room and hope that they will figure it out, no matter how talented they may be. And, you can’t define...