Thoughts on Scaling an Organization

Here is a incredibly important management puzzle: how do you effectively scale?

I define effective scaling as growth where what made the organization successful is not lost; growth in and of itself is not effective.

The implications here are huge. Success means a growing, thriving business; failure can mean any number of things ranging from major losses to the death of the organization. Luckily, most organizations are able to course correct and patch what didn’t work. Arguably it is healthy that an organization can course correct because that means feedback mechanisms are in place to know when something is not working. When scaling starts to fail, it can often illuminate what made the organization successful in the first place – it can define core values.

When I have seen scale fall short, it is often due to bringing in new managers who know how to do what they are hired for but don’t know the culture of the organization.

Case study 1: A new tech company moving from startup to more established company. Here a high level manager was hired and implemented a complete management redesign which fired team leaders that have been with the company for a long time. Corporate culture changed because the people who helped create that culture were fired. “It is not the same place anymore.” Dissatisfaction among workers was fueled by a seemingly hostile take over which fired people they respected.

Case study 2: A service company seeking major growth. Here anther high level manager was hired to grow the core part of the company. No one was fired. Many new people were brought in. Over time, the corporate culture which supported the core value of the service was lost as the high level manager only knew how to manage a large team, not how to manage this large team. Most of the long time employees left a job they once loved for other jobs.

Case study 3: A nonprofit company seeks to expand its influence. Here new, talented employees were brought in to handle the increasing demand of a growing company. Growth was so rapid that new employees were surrounded by new employees, not long term employees who could instill the values of the company. Many of the unique ways the nonprofit dealt with volunteers was lost.

In these case studies, non of the companies were destroyed. By some measures, scale was successful. But there was something deeper that was lost – something that does not show on a balance sheet.

Scale is ineffective when management does not understand the culture of their organization, specifically where that culture empowers the employees to make the organization successful.

This moves (surprise) to design thinking which requires new managers to empathize and research, build relationships and knowledge sharing, so that they understand the culture they were brought in to. That is effective management. That is effective scaling. It builds respect and trust. It may take more time. It creates lasting value.

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