Why is People Development our strategy? (Part I)
At Qonto, we believe that the quality of our work will only come from great thinkers and that we will prevail only if people grow as the company grows. This article tells you more about our journey to build our company model as we scale.
In a matter of months, Qonto’s team scaled from 50 to 125 people. Pretty good, right? The big challenge when scaling a fast-growing company is that it creates a lot of problems, directly impacting the customers’ satisfaction and company growth. At Qonto, we came from spending 80% of our time in creating value to customers (during the early days) to 80% of our time on reworking and wasting our energy in getting things done. We call it fighting against the system.
How does that happen? As teams grow, silos start to emerge, we set processes, people organize lots of meetings to patch that, and only initiatives screamed by the loudest get prioritized; this leads to bad decision making for the business. Rework + Bad decisions = Double Waste!
The risk is tremendous: we not only stop being competitive as a startup, but we also start having a lot of internal frustrations (including for myself). The pattern is as follows:
- Teams lack alignment until it looks like several entities coexist under the same roof
- The company puts in place processes, creating a lot of bureaucracy
- People waste their time on reworking rather than on building value
- At this point, people stop seeing their success and to be proud of their work
About 10 months ago, we started to think about how we should fix those problems by changing our management style and practice with a $1 billion question in mind: how to ship quality fast as we scale while creating a stimulation and caring working environment? The answer stands in two simple words: People Development.
It’s all about the People
It took me quite some time to understand why top leaders keep saying the same thing over and over: “it’s all about the People.” As for most entrepreneurs, this theme song had exclusively resonated with hiring strong CVs, until I figured out that I got it mostly wrong.
The large majority of companies usually bets on one of two well-established management styles in order to reach their business goals:
- Top-down: do this, do that, and profit will increase!
- Full autonomy: you’ll all figure it out by yourself… good luck!
The first way is not sustainable, and not quite motivating. The second leads to chaos. So what?
People Development is the secret path and has become Qonto’s secret sauce. Why? Because it creates the right environment in which each team is proud of the good work accomplished and achieve personal success while delivering the best value to the customers. The rest just follows. So now, how do we put that in motion?
Back to the roots
In the ’60s, the car manufacturer Toyota was struggling to compete with US players. The company started to apply Taylorism until the whole company went on strike (you bet!). The executive committee had no choice but to invest a lot of energy in turning the company around. As a result, Toyota started to think about ways to engineer and ship cars of better quality, faster and at a fairer place, delivering a tremendous amount of value to customers, while setting up a great company culture. That’s how Taiichi Ohno, a Toyota engineer, along with Toyota executives, came up with the Toyota Production System (TPS):
This model is based on two key principles:
- Just-in-Time: how do we get closer to working on exactly what the customer wants, and exactly at the right pace
- Jidoka: how do we aim for a zero-defects work by stopping the line and fixing abnormalities as soon as they appear
The impact of the TPS on Toyota’s development was huge! From an almost unknown car manufacturer, the company became one of the leading car producers in the world, with a market cap of 3x higher than its closest competitor and very low turnover. Of course, this success drove a lot of attention, until it reached the tech industry through what is called Agile methodologies (for example, Kanban, literally “visible card,” is a tool used by Toyota to represent their customers’ orders through the production line!).
The downside of the TPS success is that modern Agile methodologies, such as Scrum, try to reduce its practice to a set of rules, removing its essence and human touch, ultimately leading to bureaucracy. Indeed, Taiichi Ohno’s main findings were that the TPS could only work if the company was ready to involve every teammate into thinking about the way they work. Without that, the TPS would just be another productivity framework.
“What matters is not so much the idea to ship quality on time, but rather to have people think on how they can improve to reach this ambitious target”
In short, by trying to do Just-in-Time and Jidoka, we set an environment in which people have to think deep on how to make it work. What matters is not so much the idea to ship quality on time, but rather to have people think on how they can improve to reach this ambitious target. And because every single employee tries to do so, all teams are working on the same company challenges, with the same language, but at different levels.