Scaling a Startup = Scaling Empowerment

Entrepreneurship is a journey of challenges.

The bad news is that the challenges don’t disappear with growth. Just when you feel like things are taking off — your company is achieving product-market fit, has a strong vision and is clearly scaling — you’re suddenly faced with new issues and this time on unfamiliar terrain. Whereas you were once able to fit your whole team around a single table (or screen) and discuss problems openly, roles have suddenly become more specialized and teams more segmented.

The good news is that virtually all entrepreneurs face the same issues, and it is entirely possible to maintain strong lines of communication and ensure that your company grows in a sustainable and positive way. Here, Real’s Entrepreneur-in-Residence, Andrew Sider helps you do just that by sharing his key learnings from scaling his own startups and helping others with their growth.

Framing the challenge

As an early-stage company CEO, you’ll likely spend the first few years using a very small team to figure out product-market fit, validate your core value proposition with every customer and put out all the fires that inevitably come up. When you’re in that mode, the team works cohesively — you’re small and lean and everyone is working toward the same goals. But success and growth bring new challenges that you need to be prepared for — you’ll need to shift your mindset and priorities as a founder and leader.

If your company is on the path to doubling its headcount in the next 12 months, that’s fantastic. But there are a few major challenges you’ll need to master first:

• How will you structure your organization to optimize results and flow of information across the company?
• How do you select the right people to manage your teams now that you have too many direct reports to lead on your own?
• How do you maintain the cohesion that’s helped your team achieve the success it’s already had?
• And what are the best ways to make sure that communication remains strong both within and across teams?

These items — structure, management, cohesion and communication — are vital for the health of any company at any stage and it’s ideal to tackle them head-on as early as possible. They will also require an immense amount of time, commitment and persistence to master if you haven’t done so before.

Design, define and refine the org chart

Before jumping into hiring, you’ll need to revisit or design your org chart if you haven’t already done so. This will force you to understand how responsibilities, competencies, delegation, processes and information flow across the organization. The more lines that connect the dots on the org chart directly to you, the more painful scaling the organization will become.

Because your business is scaling so fast, your org charts will need to go a level deeper than in most traditional companies. The most effective way to do this is by jotting down the core KPIs under each departmental leader. Revisit your financial and assumptions-driven model to make sure there is continuity and clarity between the forecast/business model assumptions and the KPIs for each leadership role vacancy. Often, the biggest challenge in building out a leadership team is having opaque objectives and responsibilities that can overlap between one leader and another, as well as existing key team members. Running through this exercise helps you to clearly understand the “why” behind your future hires before you embark on the hiring journey.

Sitting down with core members of your team and presenting this org chart can also reduce the anxiety your early hires may feel regarding the uncertainty of their roles as the organization expands. This allows for a clear and rationale-driven conversation that gets the existing team on the same page and that aims to avoid conflicts down the road when new hires are integrated.

Identifying what your management team should look like

It’s clear that you will need to hire or promote team members to leadership positions, but how do you select these leaders? While a common approach is to simply promote top performers, this doesn’t always work out. Despite what many people think, becoming a manager isn’t simply the next step on a career path: it takes a completely different skill set from being a stellar individual contributor.

Be proactive. Based on your org chart, define the roles with job specs that match the business’ goals and objectives. Then define what it means to be a manager in your company. What are the values, traits and skills that a manager must possess? What are the expectations of the role? What do one-on-ones look like? How do you coach a poor performer? How do you coach someone who’s misaligned with values?

This exercise should force you to distill the tactical and strategic skills each candidate needs to possess to achieve to their core KPI responsibilities outlined in the org chart. Overloading your job specs with super-human capabilities and too many requirements can not only result in lengthy and expensive searches but also threaten to derail the clarity and focus you worked hard to define in your org structure.

Because you designed the core competencies for leadership at all levels in the org chart, you can then take this list and define what it means to possess each (i.e. communication) at the Team Lead, Manager, Director, and VP levels. This allows transparency around development for the company and the employee. Further, by creating a simple handbook that includes the qualities and skills that leaders should possess along with the things they should do in addition to their operational responsibilities, you will have an assessment tool and a set of clear guidelines with which to set expectations.

This exercise will help you avoid scenarios where early hires become upset about managers being brought in above them. You can celebrate individual contributors for their great work, and help them understand how leading a team actually requires a different skills set than their current role.

Building cohesion among the management team

Once you’ve hired (or promoted) your leaders, it’s crucial that you onboard them to succeed and act like a leadership team. You need to share the same values and communicate effectively as a group before you can send managers off and expect them to succeed with their direct reports.

One thing you can do is require your managers to read certain literature as a group and foster a dialogue around the content — align on how you deal with different issues and improve the way the group thinks about best practice management. This both strengthens ties internally and ramps up the performance of the whole team. You can provide your managers with frameworks to evaluate their reports in alignment with the company’s values when you are out of the room. A great reference is the values/behaviours vs. results matrix, a simple tool your managers can use to decide when to coach, promote or fire someone.

As their leader, you will also need to model desired behaviours. Using a strong feedback model with your managers, which they, in turn, can use with their teams, will help ensure that leaders understand how you want them to interact with their direct reports. You can assess their success in this by holding skip level meetings — where you meet with your managers’ reports to better understand how they’re performing as managers — or simply sit in on meetings as a fly on the wall and give your managers direct feedback in private afterwards.

Finally, you can also create a managers’ roundtable — a forum for peer learning, best practice sharing and problem-solving. You may choose not to be present at these meetings in order to allow the group a safe space to share vulnerabilities and fears and talk about best practices. These can be formal presentations or open discussions during which one of the team members (possibly an HR manager) can challenge the team to ensure alignment with the company’s values and how HR best practices should run in a functional company.

Communication is the key to alignment

Once you have grown above 30 people, the CEO can no longer be the sole voice of truth in the organization. Your managers will spend as much time with their team members as you used to spend with your team of 10, so they need to be your key communicators and live and breathe your mission, vision and values. Alignment, clarity and connectivity with that group of managers become key to amplifying your vision of the company and its culture as the CEO.

Coming up with a clear communication rhythm is vital. Consider creating a communication calendar including guidelines about meeting structure and objectives, and sharing this company-wide so that the team members know how to communicate what, when and how. Doing this early sets the foundation for continued future growth. For example, company strategy can be discussed at town halls on a monthly/quarterly basis. Events can be shared via Slack as they arise and added to the event calendar. Team updates can be provided at weekly town-halls and department office hours.

A meeting schedule could look like this:

• An all-teams-stand-up where each team reviews their objectives for the week every Monday
• An all-team or per-team 15-minute stand up every morning to review progress and blockers
• A demo on Fridays where people who completed products show them off and disseminate learnings and information to the whole organization and where you also celebrate shipping
• A Friday afternoon management meeting with your core group so you know what was accomplished during the week, what wasn’t done, and where you can recalibrate objectives and plan for the next week (which are then presented to the team on Monday morning)

By creating this kind of cadence, all team members will understand what is communicated when, as well as who is involved in each meeting. It sounds simple but this can create transparency so that issues don’t get lost and team members don’t wonder when it’s appropriate to have a conversation. Having a long view also helps the team make mental space for what’s coming up, and will give your managers the time to socialize plans and prepare their teams. And for any important messages, whether reinforcing a big goal, a shift in strategy or core cultural belief, repeat them often and everywhere. Repetition of a few key messages is critical to building organizational alignment with staying power.

Closing thoughts

Being proactive and thinking about the changes coming to your growing company will save you and your team a lot of headaches. By clearly defining your org structure, hiring or promoting the right people to manage your teams, and building alignment through tight communication, you can ensure that your employees have the information they need to be successful and know what other arms of the organization are doing. This will not only help avoid any “us vs. them” scenarios between your teams, but by focusing on building cohesion among your managers, you’ll also create a culture where everyone is in it together, working toward the same goals.

Remember: scaling a startup is crucial but it’s hard. By taking a long view, planning ahead, and building a united team working toward the same goals, you can ensure that your company is ready to tackle any challenge that comes your way.

This article is based on a conversation between Lauren Jane Heller and Andrew Sider.

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