A Sense of Urgency in the Expansion Stage
Now that you have raised your first multi-million dollar institutional venture funding round, you are rounding out your team from the top to the bottom. Your helpful VCs and advisers suggest no-brainer strategies to capture the massive market opportunity that your product and funding are now able to capture. Yet suddenly, all around you, you sense a gradual but unmistakable infusion of inertia throughout your organization. This comes in many flavors:
- Simple projects require many more participants and stakeholders, and thus take longer and become more contentious
- Simple decisions require many more approvals steps and double-checking and thus take longer to be made
- Your managers are not as willing to take risks as before; they make fewer decisions, deferring more of them to their superiors
- Some new employees appear to be just riding along, either lost or indifferent, unless you spend the time to harangue them on company’s values
- Your product is not evolving as fast as it was – the development team is always complaining about technical debt, customization and customer support calls
In short, what used to characterize a fast moving, agile technology startup starts to fade away, and the organization as a whole seems to have lost its innate sense of urgency – an urge to capture the market opportunity, win over the customers, and build something great in as little time as possible.
Of course, I could be rather extreme here in listing out all of these issues and giving a dire prognosis for a company entering the expansion stage. But this is not because the company or its people have gotten worse in any way. Indeed, I think most companies do a really good job of maintaining their culture, core values and the customer focus they had when exiting the startup phase and entering the expansion stage; when they build out their processes, their economic model and get ready to scale these up.
However, there is a logic behind the pessimism, and again, it really is very simple, even though its impact is stated in such dire terms mostly to grab your attention. Turns out that when your company enters the expansion stage, it needs to double up on its energy levels, work extra hard on its agility, and put twice the focus on having the sense of urgency. The growth in organizational size and complexity as the company grows is an important factor in this. With more employees and more layers in the organization, messages, ideas and execution take more time to percolate through. With a larger and growing customer base, of course it is getting harder to please the increasing number of requests and complaints. Your trusted associates, many of whom probably helped found the company, are now being asked to manage people instead of doing the work themselves, and for many, it will be a difficult transition because they might have never needed to delegate.
Moreover, decision-making slows down because decisions now seem to matter more, because more money is at stake, more livelihoods are put at risk, and more outputs are expected.
Even if each person and department in the your company is instinctively slowing down by a little bit because of the new scale and complexity of the organization, the cumulative outcome can really take the winds out of your growth sails.
Again, it is not going to be solved by just blaming the employees and the loss of the culture of the organization. To counter the growth of inertia, the best solution is to emphasize even more the important of having and demonstrating a true sense of urgency. The leaders of the company need to demonstrate it themselves and steer the organization along this, using the following.
5 Pillars of a True Sense of Urgency
1. Organizational alignment and commitment
Despite its growth, the whole organization needs to always fully internalize and commit to the mission, vision and values of the company. Very importantly, agility needs to be part of the values, as we further explain below.
2. Business impact focus
All employees have to think about business impact in all that they do at work, so that they can constantly prioritize and re-prioritize their activities so that maximum impact is achieved that align with the organization’s vision and goals. A focus on business impact also prevents long, drawn out projects that run away because there are too many cooks in the kitchen, or because the goals are unrealistic, because it brings into focus the diminishing returns of additional resources on the projects.
3. Agility, or “scrappiness”
The company needs to still think and act like a startup in many ways, especially when it comes to dealing with customers, or developing new products and services. The leaders need to constantly emphasize this attitude, and reward employees who continue to demonstrate flexibility and agility in dealing with new situations.
4. Risk taking
A startup is constantly taking risks, and by taking calculated risks, your organization is where it is now. The expansion stage is still too early to be risk-averse, and you need to reward decisive risk taking behaviors at all levels within the organization, as long as the bets are taken with robust, logical supporting arguments.
5. Recognition of demonstrated sense of urgency
To really build a robust culture that values agility, impact and experimentation like described above, it is essential that these qualities are recognized, reinforced and rewarded. Not only do leaders need to show these values, but they need to learn to recognize them in their subordinates and single those instances out to inspire the rest of the organization.
Further reading: I have also written on a more specific aspect of this in my earlier post on keeping the innovative culture alive as your company grows.