Path to Scale

Every entrepreneur dreams of creating something scalable. Leaving behind a legacy which people look back in wonder and say … how did they achieve this.

What do we mean by Scale?

Scale could mean multiple things for different people. The CFO would look at scale and say more profits, the Head BD would say more clients, the Head Sales would say more revenues, the Founder would say more valuation, the HR would say more people!

At 13 Llama Studio, when we started the firm, it was just three people and we literally started in a garage. For us scale means all those terms combined, and in the past two years we have trebled our team, our sales and our clients.

I would not say that we have scaled up so far. In the past two years, we have faced a fair bit of challenges. I am pretty certain that most start-ups go through this issues, and only the ones who are able to solve these are able to become larger entities.

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Creating a safe working place for Employees

I read about the recent Julie Horvath issue which is out there on the internet, and thought that I might share some of my experiences on this topic.

In case if you are not familiar with the Julie Horvath issue, Google it, or simply head over to TechCrunch who gave Julie’s side of the story.

tl;dr – Julie was an employee at GitHub who quit after feeling threatened at work

GitHub have tried to clean things up with a sincere and apologetic reply to Julie. They have taken some prompt action and that’s what matters.

So what went wrong?

In the entire episode, Julie must have felt threatened at work. Imagine having to battle out on multiple fronts with multiple people … and apart from that handle work as well. The nausea an employee might feel with so much politicking going on is natural. Who would not quit?

One of the most basic requirements of an employee (keep this term in mind folks) implicitly wants, is to feel secure. Be it financially, physically and mentally. These are the very basic requirements, if these are threatened, then the employee is bound to quit. If I were to use Maslow’s hierarchy as a model, then these would be the hygiene factors.

In letting a non-employee (the founder’s wife) sit within the working premises next to Julie, the physical security was in question. The mental security was being questioned by the love lost colleague and the founder in question. Add to it the way the organization reacted with radio silence and hushed tones, the financial security was also put in question. The next move should have been obvious, perhaps the reaction of the organization might have been to incite this move. The GitHub blog update suggests other wise, but we will never know that shall we?

Personal Catharsis

The reason I chose to write about this matter, is because recently we had a similar situation at work. One of our earlier employees went through this insecurity … thanks to my behaviour. It took some time for me to reflect and talk to a few other founders to understand what drove this employee in question to leave … leave at such a short notice. Do I regret this, yes. Did we lose a good player, perhaps. Can this be avoided in the future, definitely.

It’s a lesson learned for me that employees are not to be treated as co-founders. You can cross certain boundaries with co-founders … those boundaries are a strict no-no with employees … even if these are the people who help you grow your organization.

Sometimes, the founder can go to extraneous lengths to retain employees … not because the organization cannot survive without them, but because of the achievements that individual can do if properly channelled. In doing so, lines are crossed … sometimes it helps in bonding the individual closer to the organization … almost like a trial by fire. Sometimes, it backfires … and even worse spreads like wildfire on social media.

In Julie’s own words, what the founder did was to retain her at the organization … however things escalated to such an extent that the very opposite happened. This is what would happen when you mix professional relationships with personal ones. In trying to build a personal relationship with your team, you sometimes cross the boundary. Most of the times it pays off.

So what should a founder do?

A start-up would always face this issue. In order to do greater things, the team has to work outside its zone of comfort … constantly. How then do you build this sense of security within the team?

One simple approach would be to not fraternize with the team. I have seen many a good start-up founders do that … and to good effect. Reduce the fraternization only during moments of celebration.

One of my clear learning from the past episode is work towards fostering a sense of security for the employees … so that means take all conflict discussions offline. Conflicts which endanger the sense of security should not be openly discussed.

What I am saying is to clearly have two separate levels of information parity. What are the things that you have tried at work and it has paid off?

PS – I don’t have all the answers, however I am learning as I journey on.

Rule by Fear

whip

There’s an interesting article available at HBR on Managerial Tyranny. CEOs and executives since long have been utilizing this approach to achieve spectacular growth rates. This is even more true when the manager is expected to show quarter on quarter results. Out goes the nice guy approach and in comes the tyrant – a whip in one hand and measurable metrics in the other.

The Rule by Fear has been used in popular firms … everybody praises Steve Jobs on his design sense, but how many of them would advocate his iron fist approach during the hey days of Apple? Did you forget Jack Welch … he wasn’t called Neutron Jack without any reason.

So when should one crack the whip? Well, if your team is aware of the end outcomes and shares your desires to reach those outcomes. Then the means of cracking the whip and acting the tyrant is justified … until those goals are achieved.

Personally, I think that this approach can only be used to achieve results in the short term. Work culture in India at least is still dependant a lot on personal equations. If the team does not share the passion, then tyranny could be the main reason why they will leave the firm – this brings to mind the quote

You do not leave the job, you leave your boss

I wonder if this can be made sustainable?

The Hell Curve

The Hell Curve

The Hell Curve

No, I deliberately wrote it as Hell instead of Bell.

Managers who have run teams must surely know this model. A friend of mine works in one of the top IT organizations this country has, every year he worries incessantly about how he is going to survive appraisals. Not his own, he is consistently in the top 10% of the firm, but his teams.

They carry out appraisals using the bell curve in this organization … that means in any project team, someone has to be top performer, someone has to be average and someone has to be in the bottom 10% … survival of the fittest in this corporate jungle … that’s the rule.

The problem with this rule is that managers are forced to take under-performers and average team members as opposed to top performers. This is so, because when appraisal time comes, he cannot appraise everyone as a top performer. So if he has more than 10% of his team putting their hearts into the project, then after a year, someone will get an unfair assessment … someone will be disappointed in his superiors. Someone will get disillusioned. And that someone would be reporting to the manager who appraised him.

The only solution available for the manager then, is to select a mediocre team and hope that they deliver the project. An entire organization that runs on mediocrity!

My question to HR personnel then are two-fold –

  1. Why the bell curve?
  2. What will you do if the curve becomes skewed (towards the top performer side)?