There’s a funny paradox about joining a tiny company and helping it grow. If part of its attractiveness is an intimacy and lack of management overhead, success creates its own challenges.
Very small companies can operate on informal communications: all ten employees know what each other are doing. The entire staff can grab lunch together, and all-hands meetings easily fit into the conference room. News is shared over the cube wall. Job descriptions and titles are afterthoughts. Decisions are made in the aisle.
For those of us who’ve left big companies, part of the start-up fun is in getting our hands dirty again with actual work: customer requirements, product positioning, competitive analysis, business models, crafting the first PowerPoint, sketching out pricing strategies. The work itself. Mix the right products and markets together (with a boatload of luck), and you may be able to touch off explosive growth in customers and revenue. And staff.
The Wonder Years
Suddenly, the entire team no longer fits around the conference table. New hires don’t know all of the old-timers, and need to be told about the company’s founding. Your newest sales rep lives across the country, and wonders who to call for things. Engineering (finally) asks for a formal mechanism to rank enhancement requests. Folks demand an employee phone list and an email alias for each department. Titles and job descriptions appear. The CEO talks about having an HR department and new hire orientation. Boom! Your infant start-up has become an awkward adolescent.
The organization is in desperate need of classic management: the team-building, weekly status reports, communications meetings, collective goal-setting, crisp role definition, org-chart-with-formal-titles kind of interpersonal leadership. Although managers don’t do direct hands-on work, you need those indispensable folks to coordinate teams, define goals, wrestle for resources, negotiate charters, motivate, communicate, network, empower, decide. Your tiny start-up has grown enough to need… well… management.
One rule of thumb is that organizations have to add a new layer of management each time they triple their total staff. A company of 10 needs a CEO. A company of 30 also needs VPs. At 90, expect to see Directors as well as VPs.
Aye, There’s The Rub
Which brings us back to the original paradox. You may have carefully honed your organizational skills and management tools at BigCorp, but you’ve used that success to buy a return trip to Smallville. For me, start-ups are about more than pure financial upside: they include the joy of working tough issues directly. Authoring the solution, not just reviewing it. That’s hard to maintain when hiring the next four staffers, and as the calendar fills up with monthly project reviews.
Yet that’s what success looks like. It’s what we want. Taking revenue from $3M to $30M and staff from 12 to 100 is on every page of the business plan. Running out of available cubicles is cause for celebration. Our 100th customer. Bigger is better.
And thus the push back up into management. How to reconcile organizational needs with a desire to keep one hand in the work?
Here are a variety of alternatives, starting with the least appetizing:
- Only join failures. While this may keep you out of the management conundrum, it has some unpleasant side effects including unemployment. And you may still be fooled by the occasional diamond in the rough.
- Keep your company from growing. Usually even worse than a natural failure, since this means holding back the rest of your team. (One exception is a professional services firm where the team plans to stay small, such as a specialty law practice.)
- Partner, outsource. You may be able to license key technologies, hire marketing agencies, or send work outside. All of this needs to be coordinated and managed, however, and may cost more than hiring the team you need. Besides, if these outside folks were good, they’d be in their own start-ups.
- Quit for something smaller. If you’re truly allergic to multiple management tiers, trade down when you have to. You’ll need to warn your co-founders up front, though, and plan a very graceful transition. Suddenly leaving your company will leave you with a big smudge on your reputation.
- Keep the organization flat. This works temporarily, with peer roles defined ever more narrowly. When each VP has 15 direct reports, though, some layering will have to happen.
- Hire your boss. If you want to keep your hands dirty with the real work, find someone else to attend meetings and make decisions for you. Pick a person that you can actually work for, however, since bosses tend to take charge. (And upside-down organizations are even more dysfunctional than flat ones.)
- Suck it up. What’s good for the company is good for you, and they need you in management now. Step up and stop whining about self-actualization. This is what you wanted to happen, on your way to a pricey exit strategy.
These range from the stark to the silly. In a real organization, change happens gradually and with plenty of time to plan. In large organizations, the same process happens at the departmental or divisional level, with similar challenges.
One practical solution is to carve out a few bits of “real” work to keep while taking on more of the formal management. These might be as executive sponsor for a major customer (thus touching real product issues), designing some reporting processes for Tech Support (and seeing what this week’s hot issues are) or owning a key OEM relationship (to mediate between direct and indirect deals). Setting aside 10% of the week for hands-on customer contact may take the edge off of full-time management.
Companies of every size need some management. The right mix for a small company — and its intentionally downscaled execs — may be a dash of gritty reality alongside more traditional command and control.