If you are building a startup with three people, you need a system that can scale to 300 or even 3,000 employees.
July 23, 2018 5 min read
Opinions expressed by Entrepreneur contributors are their own.
Being a leader of a growing company can be an exciting journey. Growth, after all, is something all leaders desire. But sometimes it can also be a problem — especially when you see that despite the overall growth, your team is not able to meet its goals.
What can you as a leader do to change that?
Susan Ward from The Balance has pointed out that growing a company can be rewarding but also challenging. “Before embarking on a business expansion, do your homework and develop a plan for growth that will minimize risk and maximize the odds of a successful transition to a larger organization,” Ward has said.
More people, more problems
When growth centers around increasing your employee headcount, the model for hiring is simple:
- Make sure your current team is tracking goals.
- Hire people only after they know how goals are handled.
- Have direct managers on-board new employees fast.
This model works well if you are hiring only one person per team. But when you need to hire 50 people per day, the HR department and direct managers will be unable to keep up. So, some groundwork is needed before you start an active growth phase. Here are some suggestions for that groundwork:
Understanding the core reason why scaling a team is hard is key; the reason is the “people” factor. Specifically, each new employee puts strain on the processes that have been set up in your company.
New employees need to spend a lot of their own and their manager’s time understanding their new work environment. They need to understand what their roles will be and how their performance will be measured. This slows your company down.
It is a common problem that while you are in the middle of a hiring drive, the individual performances of your employees will suffer. That is why understanding your company’s work processes should be built into the hiring process.
If you are doing the interviews yourself, you can explain things. If you are using outside recruiters, those people themselves need to be trained about the jobs they are selling.
Another part of the problem is the way a leader sets goals. When I joined a startup that had six people in the team, the goal-setting system we had worked well. But, by the time we were hiring employee number 11, the process had started to slow down. Setting goals each quarter seemed to take more time than fulfilling them.
A leader needs to take action the moment goal-setting starts slowing the company down. Otherwise he or she might end up working aimlessly, and losing on both productivity and growth. Not to mention the fact that most employees will not follow a leader long when they start to feel that that person has no vision.
The solution of OKRs
To face the problems heads on, make sure you are using a flexible goal-setting methodology in your company. If possible, you should start using it early on. Google did this, when John Doerr introduced Objectives and Key Results (OKRs) methodology to Larry Page and Sergey Brin and their team of 30. Today, they are still using the OKR system.
In his book Measure What Matters, John Doerr explained that, “Objectives represents what you want to achieve and Key Results benchmark and monitor how you get there.” This core principle makes this method easy to understand, for leaders and employees alike.
Such simplicity also guarantees that while your team is growing, everyone still understands your goals. Everyone still “gets” what their goals are and what they must do do to reach them
OKRs for everyone
The most important takeaway from Doerr’s book is that OKRs can be used in any company. The system works whether you’re scaling a medical startup or running the Gates Foundation. OKRs can also be easily implemented in any company using OKR Champions.
Despite these tools, many leaders learn the hard way, that OKRs are not a magic bullet. Felipe Castro, another leading OKR specialist, has said that, “There is a widespread romantic view of OKR where things magically happen. And where the primary goal of OKR is not to add value but to be more Googley, regardless of the impact we are making.“
Always be ready to grow.
A leader must always be ready for a growth spurt. This is important because just such a spurt might happen randomly, not just because the framework and the mindset for it have been built into your team from day one. If you are building a startup with three people, you need a system that can scale to 300 or even 3,000 employees. Only then can you make sure that your company’s growth won’t slow you down.