The startup that never “grew” up
Steve Blank recently wrote an article trying to explain why “companies” are different from “startups” and what makes it hard or even inherently impossible for them to innovate. The article is worth a read and I highly recommend it! My team at TriNimbus and I are certainly reflecting on it as it relates to our evolving and growing business. Which leads me to the question I want to reflect on in this post: Can “startups” continue to grow over a long period of time while maintaining a culture of innovation?
I’ll borrow these two definitions from Steve’s post as I think they provide a good place to start seeking some answers:
A startup is a temporary organization designed to search for a repeatable and scalable business model.
A company is a permanent organization designed to execute a repeatable and scalable business model.
Every advice I have got as an entrepreneur is that execution is key. You can’t manage what you can’t measure and therefore you have to pick key metrics to measure your growth so you can ensure you focus on them. You need to establish processes that will make it easier to hire more and more people that can do their job without making mistakes and hurting your business as you’re striving to deliver high quality products and services. You have to package your solutions and services in such a way that it is easy for your sales people to sell. The list goes on. All of this advice is trying to turn us into a well oiled execution machine — a company.
Where is the advice about continuing to innovate? If you need the condition of being in a temporal state seeking for that perfect business model that is repeatable and scalable for innovation to happen are you not better off doing everything in your power to maintain that condition for a very very long time? Why get satisfied in finding such a model and then trying to perfect the execution of it when it seems that you should instead move the goalpost behind that model as soon as you sense you’re close to finding it? Can you establish metrics that start to stagnate or go down when your business is moving towards that state so by managing them you ensure you will not fall into the trap?
Here’s some ways I think my business can reduce the risk of falling into the “company” trap:
- Divide each KPI by the number of internal processes and policies — luckily as a startup we don’t have a high count though the team is pushing for more! If the new normalized versions of the KPIs don’t grow faster than the original KPIs it means we’re adding processes faster than we’re actually growing.
- Create a learning organization and make the learning visible. For example, in our business we are striving to have all of our Solutions Architects and DevOps Engineers get AWS certified and take pride in having a growing number of certifications. This is just one simple example of learning being visible and measurable.
- Create KPIs that are better aligned with innovation driven culture. To continue the certification example, we can create a better KPI for measuring our learning progress by dividing the number of total certifications with the number of technical resources and focus on continuing to grow that number as we add more people. I am personally putting my hand where my mouth is by maintaining my own professional AWS certifications and renewing them this year.
- Make sure your core principles and values are better aligned with the innovative culture you want to keep feeding while you grow. Customer obsession and some of the other leadership principles Amazon is famous for are a great start. Our own principles are core to our belief that we want to work with a highly motivated team that loves using technology to help customers create better solutions.
- Empower the people in your organization to live those principles and make independent decisions when they feel their decisions are better aligned with the stated principles than the process or policy that tells them to do it otherwise. Let those same people call out the processes that are in conflict with the core company values and listen to them why should the process be reconsidered. I like to shatter assumptions and challenge perceptions every time I talk to anyone on our team while giving them permission to challenge me back so they don’t take anything for granted — even myself and my other two co-founders.
Remember that culture is a product of success. When the espoused beliefs and values of the company’s founders and leadership team are proven correct and lead to a sustained success, they slip into the group’s unconscious and become the “culture” of the group, just like our personal beliefs and values form our personality or character. It doesn’t matter what you says your beliefs and values are. People pick up the real values and beliefs that influence your decision making and action taking behaviours and it is those perceived values that will turn into your culture if what you do creates success.
If you say that you want to keep innovating while focusing on executing the business model that you think will scale your organization but you put no incentives — on your and your leadership team — to ensure that remains to be true as all of your KPIs grow, you will lead your organization to understand you care about growth only and you will turn from a “startup” into a “company.”