As a startup begins to really scale – adding clients, more people, totally new roles, higher expectations – new complexities and challenges inevitably crop up.
For some, this is why they love working in ‘startup land’ because they thrive on the pace, problem-solving, variety and ambiguity.
However from my experience, it’s more commonly a source of frustration, anxiety, complaints and even burnout – particularly for those less used to the heat.
For many founders and leaders, their solution is to hire a seasoned operator who’s ‘been there, done that’ with the tshirt and battle scars to boot.
But this is often not really the answer. The bad ones apply a cookie cutter approach to their new roles, using previously successful ‘playbooks’ that don’t actually fit the new situation and context in which they operate. It rarely pans out.
The good ones take a ‘first principles’ approach, and use their skills as a problem solver to create custom solutions to the problems they’re facing, drawing on their experience not for a ready made answer, but to help them pattern match and select the most appropriate aspects to apply in the current role.
The good ones are exceptionally rare (and expensive!) which means for a majority of startups, it’s simply not an available option.
Below are 5 ways of thinking about the inherent challenges of running a scale-up that can be applied right now, without waiting to find an expensive (or ineffective) hire to solve all of your problems.
Reframing Challenges
When it comes to startups, rapid growth often = chaos.
A good analogy here is when you’re exercising to build new strengths and capabilities you weren’t capable of before.
When you exercise, you’re essentially causing micro-tears in your muscles. As they heal, they rebuild stronger. You can’t get to peak performance without that hurt and physical damage.
Similarly, as your startup grows, you’ll encounter challenges (akin to micro-tears). Whilst they feel unpleasant, they’re actually a good thing. A feature not a bug.
Of course, there’s still art and science at play here – push too hard and that tear becomes an injury that sets you back.
But waking up in the morning feeling sore and fatigued is a natural part of the process, and so it is with scaling.
So instead of constantly worrying about why there’s a multiple of problems and points of friction across the org, reframe it in your mind as signs of growth and progress.
I loved this except from one of Lenny’s recent podcasts (with the VP Product at Ramp: Velocity Over Everything – how Ramp became the fastest growing SaaS ever…£100m ARR inside 2 years)
I was at a fireside chat with Sheryl Sandberg once at Airbnb and somebody asked her just like, “How do you deal with change? Things are just … We’re reorging every six months. People are leaving and coming and teams are shifting and priorities are always adjusting.” And she’s just like, “This is the the problem you want! This means you’re growing, and fast. The alternative is much worse!”
The caveat here is that as you grow, you should be healing the old issues over time, and running headlong into new ones. If you’re not learning as you grow, and repeating the same mistakes, that’s a different problem again.
But constantly facing fresh new challenges is a healthy sign – so enjoy the burn!
Avoid Generalisations
One thing I’ve noticed is that often people will say ‘x is broken’ in a really generalised sense.
Our ‘marketing isn’t working’ or ‘the sales team are shit’ or ‘the product is terrible’.
But in generalising a specific issue they’ve seen, employees and leaders typically miss the real issue at hand, and leadership can make decisions that cures the disease by killing the patient.
It applies to people too, where one or two poor performers on a team can lead people to thinking the whole team is performing poorly or badly run.
Remember the days in school when one student’s mischief led to the punishment of the entire class? This not only lessened the accountability of the guilty party but also frustrated those not at fault.
In a startup setting, collective punishment and blanket statements will demotivate your team and can even create resentment amongst those who are doing a solid job.
It’s super important to treat each situation individually to maintain trust and morale, and actually get to the root cause of the problem.
This is why acting swiftly against poor performance is critical; and if it’s a situation that has gone wrong, don’t settle for the general diagnosis, dig deep into the specifics of how and why it occurred.
A good way to approach this is to conduct regular retro’s when an issue occurs, and use a tried and tested framework to ensure they’re effective.
I’ve used the ‘5 Whys’, ‘DMAIC’ (from Lead Six Sigma) and ‘Stop/Stop/Continue’ in the past and any of these should support you to improve your understanding of the situation.
If you want a simpler approach that many will be familiar with, go with ‘stop/stop/continue’ – Atlassian have several great templates that all follow a similar format that you can use.
For more complex process and systems challenges, utilising the DMAIC approach might be more appropriate.
This all takes more time and energy in the short term, but the results are far superior to accepting generalised statements that something isn’t working.
Good Feedback
Nerves get frayed frequently in a rapidly growing team, but the reaction is often not helpful.
Close colleagues talk behind the back of the offending party, or they rant to their boss and expect them to sort it out, because they think that’s part of their job.
It’s not. It’s everyone’s job to have difficult, direct conversations.
Otherwise you create a weird parent-child dynamic in the business, where those who receive the feedback are unsure where it’s come from; and often the specifics get missed in order to make it harder to identify who provided it.
This is clearly unhelpful as without the specifics, it’s then hard for the individual receiving the feedback to actually change their behaviours. It also feels more like a generalised attack versus genuine feedback.
But if the specifics are shared and potentially the source identified, it of course raises the question of why didn’t they just speak to me directly?
The fix for this is to train and coach everyone in the business on how to provide good feedback, and encourage them to do it in a timely manner.
I like the ‘BEEF’ framework for this, but there are plenty of others (more options here, including ‘BEEF’).
To embed this into your culture, you also need to ensure consistency, so next time a direct report is complaining about someone or a situation, ask them if they’ve already had the conversation with them directly.
If they haven’t, that’s an action for them; and if they have, it’s absolutely appropriate for them to raise it to you so you’re aware and can then monitor if there is a change of behaviour that shows the receiving person has listened to that feedback.
Systems & Processes > People
‘We need to hire x’ or ‘we don’t enough heads to do y’ has to be one of the common refrains in any organisation.
And in the heady times of 2020/21, the usual answer was ‘of course, go hire them!’
But with all the RIFs and economic constraints facing startups in 2023 (and likely to continue into next year), it’s a much less viable option.
Instead, you have to consider how to make the existing teams more productive in their roles.
This usually means you have to look at the systems and processes they’re operating in, which are frequently inadequate or inefficient.
Consider what it is that the requested new hire is there to do, and dive into whether a streamlining of communication, better project management, improved tooling or more training and coaching could help achieve the same results.
You’ll be surprised how often the answer will be yes, we can do a lot more than we thought if we were set-up for success.
And with the advent of AI, the landscape really has changed.
Focus & Prioritise
If you’re starting to feel overwhelmed with the friction and challenges coming with scaling, it’s quite likely that you’re pulling in too many directions to achieve growth.
Going into new markets, widening your ICP, new product launches…just this one more thing.
If you want to destress the org, without sacrificing growth, you need to stop chasing shiny objects and throw all of your resources into core areas to build momentum
It will quickly create more alignment, less tradeoffs and provide focus for everyone.
I love Marc Randolph’s explanation of how they did this at Netflix, where he talks about the ‘Canada Principle’.
For ambitious founders and leadership teams, saying no to what seems like obvious opportunities is one of the most counterintuitive and difficult decisions they have to make…but it’s one you need to stay strong on if you want to avoid many of the problems that scaleups suffer in their growth phase.
Next steps
Nobody should expect scaling to be easy…but it also shouldn’t be so painful that you and your team are sprinting towards burnout and feeling deeply frustrated on a daily basis.
If you’re feeling that’s where you are right now, and your instinct is to hire a seasoned executive to be the silver bullet that solves everything, I would take a step back and consider the above.
Pull together your leadership team, and run through these questions:
Are these first time problems, or repeat issues?
- If they’re repeat issues, get the right stakeholders into a room and run through a retro process
- If they’re new, celebrate the fact it’s another phase of growth, reframe them as a feature of your success and then ask the appropriate people to work towards fixes
Are we becoming a political organisation?
- Nobody wants to admit it, but if you’re hearing multiple gripes and general sentiment that things are broken, it may be people lashing out or playing politics
- Give them the frameworks, training and time to dig into root causes and bed in a culture of direct, useful feedback
Are we hiring too many people to fix problems?
- Before you approach those hires, make sure you run a review process to sense check if improvements in your systems and processes couldn’t yield better results
Do we have too many priorities?
- If you’re constantly making tradeoffs, feel under resourced in too many areas, or can sense a lack of alignment and competing interests…get ready to radically focus and prioritise back to your core business
You got this!