Spread a mindset, not just a footprint

How growing too fast can affect your people — and what to do about it

Xcelerator
Nov 7 · 5 min read

Amina Islam

Water lilies are interesting.

Their fragrant and ornamental flowers make them an attractive pond plant, but they’re still considered a weed. That is because their rapid growth over a water’s surface could interfere with the exchange of oxygen, leading to algae blooms, stagnation and the transformation of ponds into mosquito habitats.

There’s something to be learned from water lilies about business though and that is, there is such a thing as growing too fast.

As a leader, the word growth probably stokes your fire of excitement. Growth in revenues, growth in company size, growth in market share.

Who doesn’t want that?

However, to avoid being a victim of your own success, you need to pay attention to how fast you grow because a fast pace of growth, without addressing potential hazards, could cause the wheels to come off.

Consider the case of Homejoy, a San Francisco-based online platform that used logistics algorithms to connect customers with home service providers such as house cleaners and handymen. Named by Venture Capitalist Paul Graham as the fastest growing startup by the seed accelerator Y Combinator, it attracted two rounds of funding from investors such as Andreessen Horowitz and Google Ventures totaling an amount of $38 million. Despite its initial success, it folded in 2015 after only 5 years of operations. While Homejoy’s failure was attributed to multiple lawsuits standing in its way to raising further funds, a more complicated story emerged on other factors that attributed to its eventual demise, including rapid international expansion that spread its management too thin across multiple geographies, making it harder to effectively focus on basic supply chain and operations.

Homejoy is not a unique case and shows what could potentially happen if a startup scales prematurely. According to a Startup Genome Report, 70% of 3200 high growth internet startups that were analyzed scaled prematurely and 74% of failures were due to premature scaling. Defined as “focusing on one dimension of the business and advancing it out of sync with the rest of the operation,” premature scaling is something to watch out for.

And the most critical element to watch out for when it comes to premature scaling is its impact on your people. Rapid growth is known to get in the way of a business’s governance and people performance, exacerbating certain issues and turning them into its Achilles heel.

Some examples of these people-related issues include:

  • Hiring the wrong people to fill positions quickly and losing a company’s culture in the process.

How do you address these-people related hazards to make sure that your organization not only grows well but actually gets better as it grows: Grow and groom the right type of people to spread a mindset, not just a footprint.

- Slow down to scale faster!

In his book Thinking Fast and Slow, psychologist Daniel Kahneman introduces the dichotomy between the two modes of thought;

  • System 1: fast, instinctive, and emotional

Sometimes, a deluge of business catches an organization off guard, so what happens is it reacts and defaults into System 1 thinking rather than be more strategic about execution. This manifests itself by hiring the wrong people quickly, making rash ad-hoc business decisions that are driven by personal desires rather than actual data, etc.

However, in their book, Scaling Up Excellence, the authors, Hayagreeva Rao and R. Sutton emphasize the importance of knowing when to shift gears from the fast System 1 mode to the more deliberate System 2 mode of thinking when it comes to scaling a human organization.

This means slowing down and establishing the foundation of the company; the why, what and how, the culture, the checks, and balances that would put a break on automatic responses and more importantly, make sure they do not impede the spread of excellence.

“Don’t just do something, stand there.”

- Build a sense of shared goals, values and purpose

Communicate a clear vision and make sure all your employees are on the same page. Whether it is through hiring for purpose or making conversations about the company’s values a daily part of work, there are many things you could do as a leader to make sure values manifest themselves in people’s behaviors and actions rather than the words they say. Read our previous post to explore this topic in greater depth.

- Hire more high performers

Sometimes a growing organization reaches a point where it has gone through so much complexity that it feels the need to reign its chaos in by putting stifling processes in place. However, that has a great tendency to drive innovators out. Netflix provides an example of how they think about effective growth; rather than drive out innovators through systems and processes, they recognize that the key to managing the complexities that come with business growth is to increase talent density with high performers, and then continue to run the organization informally but with self-discipline.

- Empower your people

Related to the previous point, it would be counter-effective to hire high-performers and then disempower them through rigid inflexible systems that take away their sense of responsibility. The more empowered your people are, the more likely they are to be engaged and productive. While it is important to set clear expectations on what corporate goals employees must hit, give them enough autonomy to choose the road they see fit to reach there, and most importantly, trust them to do the right thing. For example, rather than requiring multiple signatures before a new idea can be executed, a company can build frameworks that set financial boundaries on execution and let the employees run with it.

In conclusion, growth happens more consistently when the people propelling it agree on what is right and wrong — on what to pay attention to and what to ignore. Believing and living a shared mindset through the organization reduces confusion, disagreements, misalignments. That way, the company is infused with the will, skill, and resilience to move quickly. By spreading the right mindset, slowing down before scaling faster, hiring more high-performers and empowering your people, you can make sure that growth is more sustainable.

Is your organization thinking about growth? What steps are you taking to minimize the risk of people-related challenges as you grow?

About the author: Amina Islam is the Innovative Learning Lead for Xcelerator , where she works with the product team to develop new programs. She received her Ph.D. from Masdar Institute of Science and Technology in 2017. Amina is always excited about new ideas and explores them in writing on her Linkedin profile and ahscribbles.com.

Xcelerator Blog

Fresh ideas and insights from Xcelerator- where we deliver transformative learning programs to help rising professionals fulfill their leadership potential. Find out more: https://xcelerator-alg.com/

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Transforming Managers Into High-Impact Leaders

Xcelerator Blog

Fresh ideas and insights from Xcelerator- where we deliver transformative learning programs to help rising professionals fulfill their leadership potential. Find out more: https://xcelerator-alg.com/

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