Meet Jitender Panihar, a start-up advisor and HR tech enthusiast with over 15 years of experience. One of the things he specializes in is “startup to scale up” and we got an amazing opportunity to ask him about how to transition effectively when businesses scale up.
Here’s what he has got to say!
There are multiple things to attend to internally and externally when businesses scale up. Sometimes companies fail just after their first growth spurt and it is primarily because of the lack of things I have mentioned below.
Design, structure and processes
If you are looking at growth then it is imperative to decide what is the structure and design the organization will have when you have 5000 employees. And design is not just drawing boxes, reporting structure and hierarchy. It is considering several parameters, understanding the vision, and creating an organizational design for the future.
There’s a lot of scientific thought that goes into it - is the company going to be product-led, sales-led, geography-based, vertically integrated, and many other such characteristics. This also includes determining which functions have to be centralized and decentralized, the flow of information, tech and building systems that drive optimum performance.
Create processes which are scalable and identify the design principles. Design principles help you with the focus point of the processes - are you building to for efficiency or governance or scale or accountability or sustainability? Not all processes need everything.
Systems and processes need to be equipped to manage the increasing number. If you have a good organizational design and change vision communicated, you'll be in a much better position to create processes that align with both of these aspects.
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Roles and talent
The talent you hire, you hire for the future of the organization. When an organization evolves, the structures, expectations, and roles evolve too. When a company scales up, talents and roles broaden or narrow. An employee might take more responsibilities or give up some to specialize.
Startups will have to think in terms of what kind of skill sets and talent will fit the organization when they scale. And when you hire, it must be process-oriented rather than personal. The better the recruiting framework, the faster is the growth and transformation.
With scaling up also comes upskilling of current talent and skill sets. As a company, you have to communicate growth and opportunities ahead for the current roles and also help in upskilling your employees. I appreciate that a lot of MNCs have upskilling/L&D programs built for their employees. Start-ups realize the need for it pretty late after hiring multiple roles from outside. Over time they realize they can upskill their talent.
Read: 8 Amazing employee benefits to attract the right talent
Saba wanted to tell his parents that he wants to marry his girlfriend. This is a big deal as his parents are conservative. However, he needs to sell this case and align his parents for this change to happen. He uses his elder sister who is influential in the family to talk to their parents. This is change management. It is highly strategic but just common sense.
Change management is one of the most prominent indicators of success while scaling up. 80% of transformations fail because organizations don’t have the capabilities to address change. A few things organizations can do is create a change vision among the workforce, align the leadership towards it, and communicate effectively with all stakeholders.
Unlearn, relearn and be agile
Clear communication and change leadership help in adapting to these changes. Having leaders who are open to this change orientation is necessary as they help build these capabilities with their influence. These leaders are the change agents to your stakeholders who may be receptive or resistant. It takes constant communication and answering follow-up questions to gradually align all your stakeholders.
Companies can either hire HR leaders who understand change management or reach out to professionals or follow textbooks to implement it. The cost of not doing it is alarmingly higher than doing it.
Cultural and behavioural aspects
What used to work will not work anymore! Everyone has to evolve and that comes with letting go of some past behaviour. Consequently, companies will have to fixate on what it takes in terms of behavioural and cultural aspects to transition. When we acquire the skill sets needed for the transformation, the process is much more hassle-free.
Founders and the top management have to grow when the company does. They will have to end micromamanaging, getting operationally involved which was necessary when the company was a start-up. When the company scales, you let professionals do it. And this change is the biggest challenge for them as they have to remodel their role and behavior.
When we talk about behavioural change, I mean something like an individual contributor getting to manage a team that needs honing of specific skills. And when it comes to founders, they manage almost every department and are the decision-makers in a 40 member start-up. They must let go of certain duties and control when they scale up.
Even today, organizations find it very hard to not micromanage and let control they had in the initial stages. This is one of the biggest challenges companies face. Unfortunately, this comes with a lot of political dynamics which dilute the processes and divert from the vision. Delegating and empowering professionals you hired is one of the key aspects to focus on.
Culture - The DNA of the organisation
Culture is a fundamental thread and a guiding force that tells how close you are to your vision. When you scale up, you tend to not focus on all cultural tenants and it waters down. Getting feedback from people and working on that data points helps you go a long way. A lot of companies do have culture scores or NPS surveys, and feedback questionnaires but it comes down to the actions taken following these exercises. Leaders have to be accountable for the cultural aspects and provide assurance to the workforce.
Read: 10 company culture examples to inspire from