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The Derailers and the Turbochargers

20 Mins


By Team Artha

In a startup that is at the cusp of takeoff or is already on a rapid growth trajectory, I believe some practices can derail growth and some other practices can turbo-charge the growth. How easy or difficult it is for a startup to avoid or cultivate these practises is a different topic altogether.

The Derailers

1) Drift: Something that I had noticed very early on in my career as a project manager at construction sites was that once the final date for inaugurating a facility or a plant was announced, there would be a frenzy of activity in the weeks leading up to the inaugural. I used to always wonder why the entire project (lasting 18-36 months at times) could not be executed at that pace, and if it could, then the completion time could have been crashed. I realized that it is pretty much impossible to execute a project at the pace at which it is progressed in the last few weeks before completion. One of the many reasons why this happens is because of ‘drift’ (though this isn’t the only reason). Over a period of time, it is human nature to slow the pace of activity and settle down to an easy routine. The pace steps up during a crisis or when there is intense review and scrutiny. In a startup on a high growth trajectory where expectations are high and the opportunity is huge, you need to prevent this drift or at least minimize it. When drift sets in, people don’t recognize that things are slipping. They do not escalate or ask for help proactively. When you step in to do a sense check, you may be shocked to see that delays, excuses, readjustment of dates, non-availability of resources etc., have all been accepted without question or escalation. You then shake things up and the energy is back, but precious time has been lost when you had taken your eye off.

A temporary loss of energy is alright, but ‘drift’ is especially bad when it slowly begins to become a part of the culture. It is important for all key people to understand that keeping up the energy, staying on one’s toes and keeping others on their toes is critical to scaling rapidly. If seniors understand this and are not letting things slip, then the next line of leadership will do the same. Even the best people begin to drift if their seniors are not demonstrating a sense of urgency and speed.

Create a sense of speed and urgency in everything you do. If this component of culture is missing, it could hurt growth.

2) Dysfunctional Meetings: What are some indicators of dysfunctional meetings?

  • Not defining an agenda or outcomes expected from the meeting.

  • Not easily acknowledging that one was wrong or not quickly embracing a superior point of view Poor listening.

  • When everyone is of high calibre and has a track record of success, listening doesn’t come easy without practice. The outcome could be cacophony, lack of direction, and insufficient synergy.

  • Understanding that listening is not about waiting for the other to finish speaking.

  • Framing leading questions (these are killer in meetings where participants cut across hierarchy). A senior would frame a question in such a way that the junior would respond exactly as the senior wanted her to.

  • Not keeping the questions (or responses) sharp. Keeping them vague and not following up with the relevant questions based on the response. Sharp questions and sharp responses are the basis of good dialogue and problem-solving.

3) Change without Communication: Communication is often an after-thought and is initiated after the change unleashes a crisis. I recall reading an article during my MBA program that Ford Motors prepared for more than a year before introducing disc brakes (and that too on the front wheels only) because this change entailed a lot of communication and training – with dealers, service centres etc. It seemed very odd to us then, but it is so obvious now. Mature companies get it, but only partially. But startups and young scale-ups are unlikely to get this easily because this is not intuitive and understanding comes with experience. They don’t realize that in attempting to race ahead if communication is compromised, it always results in big setbacks.

When someone tells you that they are introducing a change to a specific SOP, your question should always be, “may I see the communication plan”. They are likely to feel very surprised, especially if the change is small. But every sceptic falls in line after being burnt two times (once isn’t usually sufficient!)

Any change, whatever the magnitude, needs a communication plan as a line item. A large change needs an extremely sophisticated communication plan (identification of different sub groups, using a concentric circle technique etc.). Don’t even think of making a change without a communication plan (however rudimentary it may be).

4) Lack of intensity in interactions: Intensity is a reasonably good indicator of ownership, and ownership is a sure indicator of entrepreneurship. To have intensity, you need to have a point of view on most things; and it needs to be supplemented with passion. In some startups, intensity and passion are missing – being nice, being proper, and being oblique & indirect is the dominant theme in such places. Without intensity, creating alignment is a slow process, and achieving outcomes and results in accelerated time frames is a struggle.

1) Quick decision making: There is clarity on who has the casting vote in case of a tie. One of the most powerful enablers of high growth is the collective ability of the leadership team to have candid conversations. Some individuals demonstrate this ability while some others avoid conflict, skirt difficult issues, bring them up obliquely with the wrong people and end up politicizing them. Issues therefore never get resolved and fester underneath. In strong leadership teams whenever differences arise between two individuals or there is a problem (say customer dissatisfaction), the two individuals concerned (say Head of Marketing and Head of Customer Service) would discuss this issue transparently with an intention of fixing it rather than worrying unduly about where the fault lies. Because everyone is dead serious about meeting their goals, they are intolerant of anyone else (or any other function) that slows them down or comes in the way. This impatience results in the issue bubbling up in a timely manner. On the contrary, in a weak startup, the Head of Marketing and Head of Customer Service may have run whisper campaigns that seek to lead people to believe that the fault is with the other function. The speed of decision making applies to every area – including acting on non-performers. Non-performers are not accommodated. In a failed scale up, if you look around you will see a good number of people who you are not sure as to what exactly they are doing.

2) Internal customer centricity: Those that provide services to internal recipients treat them as seriously as they would treat paying customers. Corporate functions have a strong service orientation towards businesses and behave as problem-solvers rather than makers and enforcers of policy. The foolproof test to figure out whether there is internal customer centricity is to watch how internal customers are treated by corporate functions and what happens to those that do not demonstrate customer-centricity.

3) Encourage, and actively nurture, a constructive conflict between teams: This conflict keeps everyone on their toes. Take an example: revenue growth in a consumer internet business is mostly the responsibility of a central digital marketing team. So, marketing needs to provide operations with demand forecasts, and operations need to fulfill this demand. Simple as it sounds, it is not that easy. If Operations are not ready with their supplies or technology after the demand has been generated, then two things happen – a) marketing dollars are lost, and b) customers that are trying out this startup’s service have a bad experience and would be very reluctant to try out the service or product again. Similarly, if Operations have their ducks all lined up and Marketing is unable to generate demand, there is again a somewhat similar suboptimal situation. Capacity remains idle. External partners who have invested in delivering this capacity see no returns and begin to drop off or reduce commitment. As a result, when demand does kick in someday, operations are least prepared to handle it. So, what most startups do is to try and achieve a fine balance with each function taking incremental steps so that the other team is not derailed. On the contrary, startups with a strong aspiration for leadership positions deliberately try and create an imbalance where each of the two functions try and get their act right and put the other function in the spotlight. This way, it becomes clear where the bottleneck exactly is, both in terms of the quality of the team as well as the market forces. If you find everything calm and hunky-dory in a startup that is staring at a large opportunity, you need to be a little suspicious. We can give you many more similar examples, but this should be enough to drive home the point.

4) Storytelling ability is widely prevalent: We all remember stories. We do not remember data and facts as much as we remember stories. The human brain is wired that way. Among all productivity tools, the one whose potential is least realized is the power of a narrative or the power of story-telling. Every meeting, every communication, every presentation, every update can be made infinitely more effective by leveraging the power of story-telling. Because very few people know how to use this, communication and interaction is not as effective as it should be. It can be frustrating to be sitting through presentations where people show tons of data without key takeaways, or present takeaways that are not substantiated by data, or present a deck without a flow. It can be equally frustrating to be receiving an important email communication without a preamble or clear messaging.

This can be taught to a large extent.

  • To anyone making a presentation you could ask a few simple questions: What is the story you have in mind? What are some key messages and takeaways? What are some insights and conclusions? Do you have data to support your conclusions? What are the actions you recommend? Do you have a convincing answer to the question “Okay, but so what?” for every slide?

  • To anyone sending out a communication to a large group, the questions could be: Have you thought of an appropriate subject line? Is there an important preamble that will help? What are the key messages? Have you structured the key messages in a manner that they stand out? Does the recipient of the communication need to do something, and if yes, has it been called out?

Finally, how does an organization develop good practices (the turbochargers) and discard the bad practices (the Derailers)? This is finally about culture. It is always about what the Founders and a few influential leaders at a startup consistently demonstrate through practice.

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Team Artha