At the earliest stages, startups are exhilarating. Not only do you get to see and know everything that is going on, you are relied upon to make everything happen. But what happens when your startup’s growth outpaces the abilities of the founders and early employees? Often, chaos and dysfunction ensue, if the team cannot adapt.
In the March 2016 Harvard Business Review Article: Start-Ups That Last, authors Ranjay Gulati and Alicia DeSantola contend:
Founders typically do a bit of everything—basically, whatever it takes to get the business off the ground. Through informal channels they hire fellow generalists, who cobble together their roles and responsibilities partly by pursuing their own passions and partly by looking around and seeing what needs to be done. This idiosyncratic “all hands on deck” approach can work fine in the beginning, when adrenaline is high and the company is small. But as organizations expand, they face new levels of complexity that require them to define and assign tasks more formally.
We saw this at SmartThings but were slow to react and change. We just tried to do more and more, each of us thinking that working all day and then going home and working all night, was somehow sustainable and best for the business. Sure, we eventually added specialized people who helped us tremendously, but even then, those folks had to come in and clean up processes and circumstances that had never gotten off the ground or had atrophied.
Founders often resist bringing discipline to their growing startup, for fear of losing agility and control. But then, ironically, operations become chaotic and performance suffers and that control and agility are lost to reflex and reaction.
The idea of hiring people better than you is given lots of lip service, but in practice, it is hard for many. Some people when asked to hire their own bosses to supervise activities they had nurtured since the beginning, find the new reality hard to accept. We, like many founders, soon learned how much we didn’t know about functional areas such as operations, fulfillment, retail, and international expansion. We hired people who knew these things and had skills we did not. What we possessed in spades however, was an understanding of SmartThings and it’s customers. We understood our culture and how we wanted the organization to feel, but we weren’t sure how to imprint these values onto new employees—especially with the rapid growth we were experiencing, in some months adding 20-30 people.
Leaders of start-ups see strategy, the pursuit of a clearly defined path that is systematically identified in advance, as the enemy of entrepreneurship, which requires ventures to be opportunistic and quickly shift course as they learn what customers want.
But what I am now coming to understand is, by applying lean startup practices around a common purpose and core set of values, to some more traditional strategic planning activities, a company stands a better chance of weathering difficult growth periods and pivots. Stated more simply, startups should “combine deliberate and emergent strategy”.
You can think of the iterative and incremental daily choices as the gunpowder providing the propulsion of the entity while the strategic vision and planning is the scope, aiming at a target. Without the two methods working together, we are just firing randomly or simply watching a target in our sights.