Overcoming Scaleup Challenges to Grow Like Google
Successful founders possess a combination of motivation, street smarts, agility, persistence, independent mindset, and drive. But for a startup to become a scaleup requires an additional edge: a distinctive capability compared to the incumbents, which cannot be copied quickly and has broad market application.
Today, scaleups are omnipresent and have embedded themselves into our daily lives — just think of Google, Facebook, and Uber. Achieving spectacular scaleup growth while revolutionising industries with new business models, however, is a real trick. Scale too quickly beyond your company’s capabilities and you risk ‘premature scaling’. Scale too slowly and the risk is losing momentum or ‘failure to launch’. Nonetheless, this is a trick that entrepreneurs with vision must learn to pull off.
At 7 startup We’ve built a custom program and strategy workshops to accelerate your scaleup, and find the balance of alignment and autonomy. Together with our partner Tangible Growth, we implement OKRs (Objectives and Key Results) to help you move from Startup to Scaleup and perhaps Unicorn faster than you would do without them.
- Increase Revenues by +5 to 20% — doing more of the right things +quicker results; reduction in waste = more SALES!
- Increase Employee Net Promoter Score by +30% — Scaling often fails with poor hiring decisions and lack of cultural alignment.
- Increase Efficiency by +30% — by ensuring the team at large keeps engaged.
- Increase Transformation Speed by +50% — by building maturity significantly faster.
Different companies experience different challenges while they scale, and the demands on a scaleup business leader naturally evolve: growing pains are real. When teams jump from 15 to 50 employees there’s team swell, new roles require new and clearer directives. What comes naturally at 20 becomes a struggle at 50 or more employees. As a founder, there’s a significant risk that important information from front-line employees is missed simply because you can’t speak to all of them.
All of a sudden staff complain that they don’t know what’s going on anymore, they don’t know why you’re making certain decisions and they don’t know what they should be doing.
- Complexity — designing the business to scale is vital. Once your business starts to scale, it can become complex, bureaucratic, and administrative; resulting in duplicating efforts, and a lack of coordination and control.
- Scaling Shifts Your Team’s Focus — Objectives are routinely confused with tasks and initiatives. You’re not always going to be able to move as quickly or as aggressively as you’d planned. Long planning cycles often don’t allow for fast-changing hypotheses to be incorporated, such as avoiding growth that comes at the cost of the existing customers’ experience.
- Alignment in a growing team — within small teams aligning with everyone over a zoom call, cup of coffee, or lunch is so very convenient. However, as the team expands, keeping everyone in the loop becomes tricky. The key challenge is creating company-wide transparency while avoiding information overload.
- Maintaining culture — in a small startup it’s easy to organise a get-together over beers or coffee. But with growth and rapid hiring — keeping a consistent company culture becomes more difficult; it’s easy to lose the values that the founders envisioned. Defining the culture and implementing this across the board will help to limit how much change is felt internally.
- Processes — in an early-stage startup you may be able to get away with a certain amount of disorder. But when you’re scaling up it becomes critical to ensure that key processes are appropriately handled.
- Cross-functional teams — moving from many individual contributors to teams is an essential aspect of scaling a startup. Teams produce more for less when they are working in a well-defined, well-understood process.
- Organisational chart — transparency across the organisation with clear roles, responsibilities, and reporting lines can’t be put on the back burner.
- Remote working — Scaling remote working is a challenge in the best of times let alone during a pandemic hit 2021, approaching company growth goals in a long-term fashion whilst incorporating a culture of remote working.
OKRs to the Rescue:
Google employed ‘Objectives and Key Results’ (OKRs) and has stuck with this elegant and powerful management methodology and tool for over 20 years. A system that scaleups would do well to adopt as an organising principle for their performance.
Moving from startup to scaleup is one of the hardest things for entrepreneurs to do. Leadership teams can often end up with a large number of metrics that dilute the focus. During fast growth is often when a scaleup is at its most delicate — with culture, productivity, and alignment all in flux. Ill-designed systems that have not been constructed for scale — fail.
So, how does a scaleup focus on scaling alignment, management, and collaboration across teams and departments? Scaleups must maintain a dynamic focus; a clear long-term vision coupled with the ability to be flexible and adaptable.
Success using OKRs
OKRs builds on Peter Drucker’s Management By Objectives (MBO). The idea of increasing motivation and engagement by defining the ‘what’ and giving your team the autonomy to decide on the ‘how’, separating the qualitative ‘objectives’ from the quantitative ‘key results’, is not new.
OKRs were created for scaling businesses and are widely being adopted to rally teams around what matters most; bringing radical clarity, enabling visibility on business impact, and prioritisation. We all want to work on something important, and OKRs make this explicit by forcing you to clarify what you’re trying to achieve and what matters most.
OKRs consist of a high-level objective, a more detailed description explaining the importance of that objective, a summary of how the objective aligns with the wider goals of both the individual’s team and the company, and the three to five key results that will help them achieve that goal.
- Key Results are measurable — an easy way to grade using a number: Google uses a 0–1.0 scale to grade each key result at the end of a quarter.
- OKRs are public — everyone in the business should have visibility of what everyone else is working on, and how they performed in the past.
- The “sweet spot” for an OKR grade is between 0.6 and 0.7, if someone achieves 1.0 regularly, clearly their OKRs need to be bolder. Low marks shouldn’t be punished but seen as data to refine OKRs for the next quarter.
“Your OKR system is likely to be different from Google’s, which is different from Amazon’s, and so on. However, for every system to be effective, they are likely to share the three points above. Objectives should be ambitious and feel somewhat uncomfortable.”
The SaaS Tool
The Tangible Growth SaaS tool and 7 startup consulting + methodology empower scaleups with the mindset and culture to aspire to the next level. We empower you with the capability and tools to scale.
- Combining a methodology with a purpose-built SaaS tool.
- Built for remote teams & dispersed teams to manage highly complex work and enabling autonomy.
- Transparency to see all objectives across the organisation to the last leaf.
- Supreme UX that outperforms any enterprise app.
- Designed to deliver cost savings and adding value to scaleups and VCs.
Our methodology and application improve business agility and performance through continually aligning the organisation. The program consists of defining target criteria for the transformation, defining common principles with the management for organisation agility, key targets for 3 to 12 months using OKRs, and more. Learn more about the methodology here.
Overcome Scaling Growth Pains
Avoid Silos, remain customer-centric via outcome-based thinking
Principle-based leadership culture avoiding strict policies
Long-term vision, strategy & 3 months target focus
Future-back thinking, next round of funding, or 3 months target focus
Understand capabilities to build for scale, critical success factors
We help you improve alignment, productivity, engagement, and performance, fast. Achieve consistent ‘best-practice’ OKR use and high levels of engagement at scale.
Amit Khanna is the founder of www.7startup.vc and has 18 years of experience with Startups and the Enterprise, holds an MBA, focusing on Growth and Investments. Amit supports entrepreneurs with every aspect of their business including concept and product development, investor presentations, fundraising, and scaling up.