The Arc of Growth: What’s Needed as Your Company Goes from Ten to Two Hundred People
What becomes important internally as the team grows in size?
When it comes to consciously growing an organization, what’s needed in a smaller organization differs from what a 300 plus person company needs. From a learning and development perspective, what things become important to focus on depends largely on the size of the company. As the team grows, the needs of the organization shift to meet the increased amount of people-power to organize.
Based on what we’ve seen at Reboot over the years, we looked at what’s needing to be learned at certain key moments of company growth. We’ve compiled what we see as a general guide to a company’s basic needs based on its size. (We did not include companies going public, as IPO is a wholly other animal with a wholly other set of needs to prepare for and things to consider.)
For a Team of 10 People
Vision, Mission, and Values becomes the most important thing to consider at this stage. This guides hiring and starts building a culture by asking important questions about how you want to operate together as humans in this company. How do we decide? How do we communicate? The groundwork established here is foundational to a healthy company.
Another good piece of groundwork at this stage relates to the co-founders. A wide variety of issues can arise between co-founders, and there are conversations worth having early on to avoid problems later. We have more on that here.
For a Team of 20 People
The importance of rituals in your organization is something to seriously consider. Think about creating processes and celebrations that ground the values into the culture. What customs do you do regularly at your company that reflects the core of who you are?
When the team reaches this size, the time comes when “We Need Our First Manager.” Establishing management practices and reporting structures are just as important as selecting the right folks to be your managers. How do you manage through other people? The psychology of moving from independent contributor (IC) to manager is a big leap, as management is a different skill. It doesn’t work to promote your best performing IC. As these processes and structures are fleshed out, it’s also important to articulate what the career path is for ICs since many folks can think they have to become a manager to grow.
For a Team of 30–50 People
Once the team reaches 35 people, it’s important to consider formal HR practices. At this point, if you are not operating with such things in place, you may notice previously established systems are already breaking. All too often, the office manager gets saddled with HR tasks. While this serves a purpose for the first couple dozen team members, it will become important to articulate and communicate processes around performance reviews, promotion conversations, career ladders conversations, etc.
Filling the HR seat will help with a myriad of other processes that become equally important at this stage. This person can help with all of the aforementioned tasks, as well as in-house recruiting and formalized onboarding. If you are scaling rapidly, the recruiting function is best located in-house to preserve culture. While onboarding was likely in place earlier in the company’s growth, at this point, a formalized onboarding process becomes yet another key component to preserving culture. (Onboarding your executives will be different from onboarding everyone else on the team.)
Sometimes it makes sense to hire these roles separately. Hiring an HR Generalist and a recruiter can often work well. It’s not as often that you find great HR people that also are great recruiters, so having a person who’s fantastic in each specific area can be beneficial. Depending on the scale of your growth, it can be more important to hire a great recruiter and then a great HR generalist shortly after.
It’s time for your first executive team. Before this point, you were likely meeting informally with the founders and maybe some early employees. At this juncture, formalizing the executive team becomes an important process in which you can establish working relationships. A high-functioning executive team is a well-earned team dynamic to actively work towards. It requires clarity around roles and reporting structures, clarity of vision, mission and purpose, clarity around meeting frequency and expectations. A thriving executive team knows who they are individually so that they can come together collectively and work through the tougher human areas that arise — such as personalities, communication styles, giving and receiving feedback. The more each member knows about the operating manual of each member of the team, the better chance that things will flow with fewer stalemates and hiccups. It also ensures greater trust on the team.
Considering titles for the executive team is another important consideration at this stage. All too often, founders give conflated titles (VP / SVP / C-SUITE, etc.) when the person donned with said title is far from that level. Tile to role mismatches can hurt later on. If you hire a VP of Product that is really a manager level, then you will inevitably have to demote or fire them. Leveraging the title “Head of ______ ” makes it easier to change their titles at later stages in the company, should that become the case.
By this point in company size, you’ll also want to start formalizing your management practices. You may have, for example, three to five managers in place already managing teams of ten people. You can start formalizing how managers work with their direct reports, handle their 1:1’s, give feedback, run meetings, and lead effectively. Defining what it means to be a manager at your company is a way of setting clear manager expectations that they are then held accountable to when considered for performance reviews and promotions.
This is also a good time to revisit the values you articulated previously. Looking back and looking at where you are now, are you living the values you stated or has something changed? Culture and values answer the question “how do we behave?” Culture is created in how you act and what behaviors happen between and amongst those in the company. Your values should capture them.
A large part of what shapes culture and values is communication. Not only how are these things communicated, but how do we communicate as a company. Communication, while critical at every stage, becomes even more important at this stage because the stakes are higher. No longer can you make decisions from hallway conversations. Increased formalization of communication, by setting up standards and norms, helps to establish lines of communication for decision making, giving and receiving feedback, and making sure work gets done. At this stage, CEOs need to focus on “building the machine that builds the machine,” which means keeping the team focused, the vision communicated, and proper tasks delegated so that the leader can lead and not be in the weeds of the day-to-day. This remains true for the next few stages of growth as well. Keeping an eye on prioritization, delegation, and vision are key.
For a Team of 80–100 People
The two big team management events that often crop up at this stage is “Turning the Team for the First Time” and supporting the manager function more holistically. At this juncture, you might find that early team members or even the members of your executive team that got you here are not scaling. As you look out into the team, what roles and functions need to be turned?
A high performing leadership/executive team becomes critical with a team of this size. It’s important to carve out time to invest in creating strong relationships between leaders, align on ways of working, creating, and strategizing. Planning effective leadership offsites and strategy planning sessions is part of keeping these team members functioning cohesively.
At this size of an organization, you likely have eight or so managers with teams of 10 direct reports. Now it’s time to start thinking about how to support your management function more holistically. Manager training becomes doubly important to ensure the team and projects are tended to and executed as expected.
Defining a clear approach to assessing performance, making promotions, and compensation becomes important at this stage as well — this is for the whole team, not just the manager set.
For a Team of 150–200 People
While tending to the executive team’s players will be an ongoing process, once a company hits 150–200 people, there’s another great turning — the “Turning the Team for the Second Time.” There are key moments where, as the CEO, you will look at your exec team and see that about 50% need to be up-leveled.
For a Team of 300 People
When the company reaches this size, we see the need for flawless communication at scale. Internal communications becomes increasingly critical to ensure cultural consistency. It helps to have engaging and effective all hands and selective yet compelling all company emails. While these are needed at every stage of the business, it becomes hypercritical when the CEO and the leadership team have no direct communication with most of the employees.
Up until a team size of 200–300 people, you can outsource your Learning and Development (L&D) function. As the company approaches 200 people, the company needs a dedicated L&D function in-house, which becomes imperative as the team grows towards and beyond 1000 people.