Too Large for a Founder, Too Small for a Manager

by Roxana Valea

When startups reach this delicate point, many implode. The key is to match the growth of your business with the rigour of your processes.

We have all heard that entrepreneurs are not managers. And even if they were, it would be little scope for a professional management approach at the beginning of a business. So they keep it all in their heads.

Ask an entrepreneur what they want to least talk about and like you'll get to the Cinderella of all scaling aspects: processes. They want to talk about revenue, about the product, about the vision, the customers, the social impact, you name it. But not about processes.

So entrepreneurs keep it all in their head. All the jobs, all the deadlines, all the details. And they do this until the business is too large to stay within their head and then they rush to hire someone who can pick up what spills over. The problem with this approach is that someone new will have a limited structure or none at all to rely on. Therefore, they too will rush around handling hot potatoes until they feel they need someone else again. And so the team grows. But if the processes do not grow to support that team the result is easy to forecast: inefficiently, chaos, lost opportunity.

In the startup world, processes are often seen as the dinosaurs of the corporate world. "We don’t want to grow heavy" founders say. "We don’t need that stuff, we’re not a big company". But the point is that you need some of it in order to become a big company.

“More than 90% of business start-ups fail, due predominantly to self-destruction rather than competition. For the less than 10% of business start-ups that do succeed, most encounter a handful of near-death experiences along the way.” Startup Genome

Let’s take a look at what happens when processes and systems don’t scale:

• Limited growth –a startup can’t deal with increased complexity and volume
• Confusion – reigns and prevents a business from growing
• Premature or bad hiring– When processes and systems are not fit for purpose, a common panic response is to throw labour at the problem which might actually increase the problem.
• Clone the way things are done – But what worked for a company of 5 people may not necessarily be appropriate for a company of 50 employees.

What are these processes and what’s the difference between a process and a system? Let’s look at a couple of key definitions:

Processes represent the way things are done, step by step.

Systems on the other hand represent the way a process is controlled. Systems do not necessarily mean IT systems. A simple stand-up meeting might be a key system element to control a sales process for instance. 

How do you make sure the processes you have are fit for purpose?

First of all, it’s important to understand that even no process is a process. A company will always have a process, even if that process reads as follows:

1. An issue arrives

2. The founder thinks about what to do

3. The founder comes up with an idea

The key question to ask is if that process and the system that controls it are accurate and do the job. If you're facing this question, here's a 3-step framework to review your processes:

1. Maps the AS IS situation. This represents the way things are done now. Record everything, all the steps, all the checkpoints. Map it on a piece of paper and attach all the relevant documents. If there are none, leave blank spaces. Sometimes a blank space speaks volumes.

2. Hold a critique session. Include all the parties interested and, if possible, include someone who has an outside view. A consultant, an advisor, someone who has seen how this process works in other companies. Someone who can bring that outsider perspective. Ask people what works and what they feel doesn't. Write down all the issues. Write down all the suggestions. Brainstorm. Allow people to be creative. Ask questions: "If you could have it in the perfect way, what would it look like?"

Bring in the outside perspective and open it for debate. Would it work here? Yes? No? Maybe? What could make it work?

3. Design a TO BE process. Based on all your notes from the critique session design the future process and accompanying system. How could it work in the future so that it’s more appropriate, more efficient? So that it gives people what they need? So that it makes people happy? Because a TO BE process will be adopted only if people see a benefit in doing things the new way. Make sure it includes their points and answers their expectations.

4. Test it. For a day or for a month. Make sure it is actually doable. Get feedback. Adjust. Test again. Adjust again. Then get buy-in from all interested parties. And then it’s time to go ahead and implement it.

 5. Implement it. Support people in letting go of the old process. Often this is the most difficult part. Coach them. Be there for them. Reinforce the advantages of the new process. Again and again. At some point, it will stick. And make sure you celebrate any early win so that people feel motivated to follow it.

That’s it. Easy right? Well, the key is to do it again once you’re done. And again. It’s called continuous process improvement. Make sure that, as you grow, your processes grow too. Not too fast as they might drown your business in unnecessary bureaucracy. Not to slow either because they will hinder growth. As with all parts of a well-oiled system, make sure they move in tandem.

And then sit back, relax and enjoy a job well done!