What to do *before* you double in size
Growing pains are an unavoidable part of scaling an organization. Curveballs will be thrown, and you’ll face challenges that are uniquely your own. But fear not, for there are common (and predictable) points where scaling an organization will hurt.
“The first one is when you reach about 20 people,” Johnathan Nightingale, founding partner of Raw Signal Group, says. “Up until then, you all can fit around a long dinner table together. You don’t really feel alignment issues because you’ve got so much shared context. You don’t feel the need for management, even though some level of management is likely already present.”
Involved in management and leadership training as he is, Nightingale sees a proliferation of exploding tech companies, and not enough of them preparing ahead of time to effectively scale their teams. That happens because so many of the problems are invisible or unforeseeable when your organization is small and scrappy.
“We’re really passionate about this industry,” he says. “But it’s run so badly. And if we don’t do anything about that, we feel like we’re complicit in it.”
Now, he and Melissa work mostly with tech companies that are scaling quickly and are facing the difficulties that come as a result. In this interview, he breaks down the common pain thresholds, explains the fundamentals of addressing those challenges, and illustrates how managers can preempt growing pains before they even arise.
The common growing pain thresholds
Part of the reason you don’t feel the early pain is that you do things that don’t scale when you’re small. Take a look, for instance, at hiring: the first people you hire are probably people you have existing relationships with. “That’s not a meritocracy at all,” Nightingale says, “but many startups choose to optimize up front for a shared brain. You can communicate fast, get work done, and have a shared understanding of what you’re trying to build.”
As you continue to scale, you’ll reach further into your network for the next hires. Many founders feel like this is merit-based because they’re pulling people whose good work they’ve seen before. But this relationship-heavy approach tends very strongly towards homogeneity.
But before long, you’ll have exhausted your network for hires, which requires you to create a new hiring process. This is where the pain of growing a company kicks in. You’re suddenly without the framework or tools necessary to hire the people you need to hire, and you need those people to jump in and ramp-up immediately.
“When you add one person to a twenty-person organization, you’re adding twenty new reasons to communicate and build trust and build safety.”
Furthermore, getting past 20 people is a struggle for a lot of orgs because it’s simply a numbers game. Brains have trouble, Nightingale notes, conceptualizing combinatorial explosions. In other words, as you add people, the number of relationships in your company expands exponentially.
When you have four people, there are six relationships to manage. Ten people, there’s 45. Twenty people, there’s 190. But by the time you get to 40 people, you’ve got 780 relationships, and at 100 people, you’ve got 4,950 relationships. Adding one person to a scaling company adds increasing interpersonal complexity to your organization.
“We have a poor ability to conceptualize that when you add one person to a twenty-person organization, you’re not adding one person, you’re adding twenty relationships that can go well or badly,” Nightingale says. “You’re adding twenty new reasons you’ve got to communicate and build trust and build safety.”
And that’s just one type of growing pain. As you scale, you’ll keep tripping over new ones. Nightingale sees companies get to 60 or 80 people, and they begin to experience the first symptoms of silos and tribalism. And those are just the common issues, because every company has its own unique challenges in addition to the standard ones.
The fundamentals of preventing growing pains
Oftentimes the first call Nightingale gets from an organization is from the founders: they’re at about 40 people and they’re experiencing serious pain around their managers’ unpreparedness. Their managers need help with the fundamentals of management.
These fundamentals are answers to questions like what is a manager’s job? How do you run a one-on-one? And how do you think about organizational design as you grow?
Nightingale also sees more complex topics arise, dealing with compensation strategies, and losing candidates at the offer stage, and evaluating the non-financial pieces of working in an organization. But when you reduce each of these problems to its core, you’re left with a single overarching theme: communication.
As a parallel, Nightingale recalls talking to someone who was learning how cameras work. “She said, ‘You know, I feel like I’ve really got the basics down. The only things that I’m struggling with are light and motion.’ Similarly, when I talk to organizations, they say, ‘You know, it’s all going pretty well. Our only problems basically just boil down to communication and direction.’”
Communication, he says, is one of those words that people use to mean whatever they want it to mean. But it’s still the root of all the other problems, and a useful lens to start taking snapshots of how you can preempt your growing pains before the really start hurting.
Set standards for your culture
Let’s say an employee comes to you with a complaint about another department: Marketing. “What does Marketing do all day?” your employee wonders. “Their goals seem like garbage.”
There are a few approaches you could take:
- You could build rapport by commiserating: “Yeah, totally. If we weren’t here, nothing would happen.” That sort of communication can feel good to an inexperienced leader; plus, it gives the former-IC-now-manager a chance to maintain a connection with her roots. But, you’re tolerating someone on your team attacking another team in a one-on-one context.
- You could nip the negative behavior in the bud by saying, “Hey, that’s not cool. We don’t do that here.” Sure, that establishes that you won’t allow for closed-door attacks on your coworkers. But, if it feels inauthentic or officious, you break the trust with the employee as soon as you do that because you’re just enforcing a rule blindly without providing helpful context.
- Or, Nightingale says, you can build on the shared goals, shared understanding, and shared relationship with Marketing that you’ve built at the management level. You can take this opportunity to share with the engineer what you’re trying to do as an organization. “When that person says that to you in a one-on-one, you can say, ‘Interesting. Tell me more about that, because I signed off on Marketing’s goals. So if you think they’re screwed up, that’s on me as much as it’s on Marketing, and I want that feedback. We’ve got to have this conversation because we’re all building this company together,’” he says.
“It’s not what you put on a poster on the wall. It’s not what you put in an employee handbook. It’s the sum of your actions.”
In that moment, you’re setting your company’s and your team’s culture. “We talk a lot about this,” Nightingale says. “One of the defining boundaries of culture in any organization is the shittiest behavior you will tolerate. It’s not what you put on a poster on the wall. It’s not what you put in an employee handbook. It’s the sum of your actions.”
When this kind of moment arises, it’s actually a bad time to start solving it. You need to know what your approach to these situations will be way before the behavior arises. Be proactive and conscious in setting your culture, so you can back it up with your communication in every instance.
A management team that does its job
If you want a simple answer for how to improve communication and solve all your other problems, here’s Nightingale’s response: “It comes back to a management team that actually does its job.”
But if you want something more in-depth than that, here’s what a management team doing its job looks like.
- Do 1:1s
Nightingale understands that one-on-ones are a pretty basic thing—“But it’s a basic thing like diet and exercise,” he says. “You know, it’s like, ‘I’m great at photography except for light and motion.’ If you’re not doing one-on-ones, your people don’t have a connection to the business.”
A whole lot of companies that complain to Nightingale about communication problems or siloing problems have managers who aren’t holding one-on-ones. So don’t just assume they’re happening because they ought to happen. Make certain they’re actually occurring. And then treat them as sacred yourself—don’t let 1:1s get written off among all the other aspects of your job.
But communication is not just about 1:1s. In a generalizable, scalable way, people have got to be talking to a manager, and that communication needs to be informative and effective whatever its format.
- Be critically aware of your role
For communication between managers and team members to be at all effective, Nightingale says, managers have to do more than just do their job—they need to know what their job is. That means managers are working all the time to connect themselves to the business, to understand what their team’s roles are, and to figure out how to own mistakes as well as successes.
“Managers, especially junior managers, are often uncomfortable owning mistakes,” Nightingale says, “because it suggests that they’re bad at their job, or that their work’s not needed. But the best leaders I’ve found are the ones who get really uncomfortable when they’re not on the critical path.”
“The best leaders I’ve found are the ones who get really uncomfortable when they’re not on the critical path.”
All managers need to ask themselves critical questions and take personal accountability for their decisions and their engagement. “What are we doing here? Do I believe in the direction that’s been laid out?” Nightingale explains. “Do I believe in what was said at the all-hands meeting, or did I just nod along and check my phone?”
Not only does critical awareness of a manager’s job keep that manager more engaged, it also allows her to pass that awareness on through her communications with her team. That connection between the company and the engineers through managers, Nightingale says, is magic when it works.
- Be vulnerable
Owning your mistakes and your successes as a manager is part of being vulnerable. But being vulnerable is about 1000x more complex than saying “Oops, my bad.” Being truly vulnerable helps you build trust in your leadership, and you also establish your own trust in your employees.
“If your people can’t see that you give a shit, that you have uncertainty but you’re pushing through it, that these are the tools you’re using to make decisions, then it’s hard for them to buy-in and believe you when you show up and say, ‘Hey, here’s a new strategy and everything’s going to be great,’” Nightingale says. “They don’t trust you yet.”
Nightingale has observed how powerful vulnerability is as a management tool—but it’s a muscle that needs built. Practice vulnerability (which is closely connected to honesty and humility) wherever you can, and with whomever you can. If you can’t practice vulnerability with your team as a whole, try it with your manager. Sit down with them and discuss what you’re struggling with. And then, when appropriate, allow them to help you with those areas.
“Your team needs you to keep getting more elevated in terms of the perspective that you can bring. But you can’t do that if you’re doing everybody’s job for them.”
Fighting this type of vulnerability, Nightingale observes, tends to bury a lot of founders, who feel that everything still needs the founder’s touch.
“I get it,” he says. “This is your baby. But you will kill it if you cannot hand some of that stuff off.”
Here’s the turning point in being vulnerable. All of these growing pains are preempt-able by effective communication, which tends to humanize everyone involved. And it’s that same desire to be human, in touch, and down to earth that drives a lot of founders and senior managers not to delegate. They want to project an image that they’re not too good for that stuff. But that over-involvement paralyzes the team.
“As a senior leader, your team needs you to keep getting more elevated in terms of the perspective that you can bring,” Nightingale says, “and you can’t do that if you’re doing everybody’s job for them.”
Instead of trying to improve the whole company by yourself, focus on being an engaged, critically aware, and communicative manager. Allow your people to do what they’re best at—what you hired them for in the first place. That will shape your culture (and thus your organization) with greater impact than any code you could write.
And this point is so important that Nightingale says it twice: make these shifts before they are problems. “By the time you need it, it is too late to start building it,” he says. “So today’s a good day to start.”
Ben Thompson is a co-founder at GitPrime where he leads design and customer experience. He is a Y Combinator alumni, with a background in product design, branding, and UX design. Follow @thebent on Twitter.
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