When a start-up company scales from a core team of 10-20 team members to 100+ people, I’ve witnessed a tendency for departments to lose touch with one another. Thats when we become hyper-focused on scaling our own individual team.
This often results in the loss of cross-team communication, break-downs in collaboration, along with other inter-department conflicts.
In this blog post, I’m going to share one exercise that will help our teams avoid conflicts and stay cohesive. It starts by seeing the organization as one entity, rather than a group of separate teams.
Do I see the company as one?
Adopting this perception is critical to the success of an organization, because the alternative, to see the company as parts that work separately, will never grow the company as a whole. Allow me to elaborate:
In our day-to-day, we often view ourselves as part of one specific team, one group. In turn, we subconsciously view the organization as a group of separate entities such as marketing, sales, customer success, product management, engineering, R&D, finance, etc.
The danger of this perception is that it can create inter-team conflicts: e.g. when goals are missed, we tend to blame it on other teams; when budgets are planned, we tend to fight each other for a bigger piece of the pie.
As we don’t emotionally relate to other teams as much as we do with our own team, we focus on improving only one team: Our team. This can be detrimental. Improving only one segment of the company will not result in a better company: e.g. Hitting our sales goals may not result in higher revenue if the sales team is not collaborating with customer success on retention goals.
A company thus needs all teams to be aligned on a single strategy for it to grow. It becomes clear that improving how teams interact and work with each other is more important than improving the team itself.
In one case, I was helping a clothing retailer’s merchandising team identify product trends. The goal was to find characteristics of clothing items that people would buy as part of repeat purchases, then advertise them as part of newsletters. However, because the marketing team had differing priorities, the products we identified as leading to a higher chance of repeat purchases failed to be advertised. Instead, newsletters featured customer stories in an effort to connect emotionally with users. This is not to say that the marketing team’s tactic wasn’t effective, but because both teams failed to coordinate, time and resources were wasted. The merchandising team’s effort was in vain.
The good news is that everyone is capable of seeing the company as one. We do this every day when we look at other companies.
For example, we don’t react to news on Google’s self-driving cars and say: “Wow, the marketing team on Google’s self-driving car project is really effective at …” Instead, we say: “Wow, Google is really catching a lot of eyeballs with their cars.”
Now we only have to see our own company as a unit.
Does my team see the company as one?
To help our team members see the company as one entity, we can perform a diagnosis of the company’s traits. This translates into the creation of a profile that defines our organization and exposes our group dynamics.
Having team members evaluate the organization as one re-enforces the mindset that we are all on the same boat, regardless of what teams we work with.
One approach is to survey all team members’ perception of the organization, asking the following questions:
- What is your perception of our company’s current vision and strategy? How do we hope to impact the world, why, and how do we plan to achieve that?
- What are natural tendencies and behaviors that you notice of your team, other teams, and the company as a whole? What are some biases that you observe, what do we enjoy/don’t enjoy doing, what mistakes do we repeat, and what do we prioritize and de-prioritize?
- What frustrations do you experience that gets in the way of our company achieving its strategic goals? What are you repeatedly frustrated by?
- What do you feel are our company’s strengths and weaknesses? What helps us achieve our goals and what drags the team back?
- What values do we live by? Based actions and behavior observed, what values do you think we stand by?
Assembling a company profile based on every team member’s perception allows for the entire company to actively reflect on what type of animal it has become. This awareness alone will make team members more empathetic to other teams. Should we take it a step further and incentivize changes while praising improvements, teams will also implement changes to eliminate behaviors they perceive as negative or unproductive.
How often should we do this and why?
I recommend for this exercise to be performed at least twice a year for a couple reasons:
- Start-up companies tend to get distracted by new ideas that pull teams off alignment from the company strategy, so regular assessment helps to diagnose whether any team is going off-course, and to actively re-align them;
- Similarly, as a company evolves, its traits change. It’s thus important to regularly assess whether the company’s behavior is evolving in the direction that we want, creating the culture that we desire.
Let’s explore these two points in more detail.
1- Aligning teams to the company strategy
In my opinion, it is easier for top leadership to set a competitive strategy than it is for them to keep all teams aligned to the strategy.
Especially at start-ups, individual teams tend to get distracted by new ideas and initiatives that fall outside of the company strategy. This is caused by a combination of factors including:
- Ambitions and smart team members that want to change the world, but are easily distracted;
- Ineffective communication from senior leadership about the actual strategy; and
- Lackluster enforcement of the strategic plan.
The result is that actions across teams and individuals are misaligned and the company is pulled in all directions.
For example, a payment solution provider’s competitive strategy may be to focus on providing payment systems for large hotel management businesses, offering industry-specific solutions.
If that strategy is ineffectively communicated and ill-enforced, teams may take actions and decisions that are counter-productive. Marketing may run campaigns that attract all hotel operators, large and small, to get as many leads as possible. On the other hand, customer success may adopt a low cost strategy to boost profit margin rather than offering enterprise level support for clients.
The result will be that marketing money is wasted on attracting the attention of small and medium hotel companies we don’t want. And down the line, customer success will have a hard time retaining large clients without proper resources to create deep relationships.
Misaligned goals across an organization will thus slow down the company’s growth, if not reverse it.
To avoid such a fate, it’s critical to first decide and agree on a competitive strategy among the senior leadership team. Each department head should have a clear idea of their role as part of the strategy and who they need to collaborate with. Afterward, leaders will need to design and communicate the strategic plan to all their team members.
Results from the company profile survey will reveal whether everyone understands the strategy. Should there be confusion, misalignment, or lack of information on what team members believe the company strategy to be, we’ll need to clarify the strategy (i.e. highlight decisions and initiatives that are aligned or misaligned), actively refuse resources to misaligned initiatives, and review team goals for strategic alignment.
With limited resource, there’s no time to waste on misaligned initiatives.
Following up on our example above, the payment solution provider’s marketing goal should be to attract as many large hotel operators as leads as possible, and to neglect any small and medium size operators. On the other hand, customer success needs to provide enterprise level support with an appropriate budget.
2- Is the company maturing as desired?
Keeping an eye on the company’s behavioral tendencies, strengths, and weaknesses helps leaders acknowledge the company position, and whether we need to change course to stay relevant.
As teams gain experience tackling their problem, and as new individuals join the team, a company’s strengths will evolve and new skills will be added. On the other hand, a larger team will also bring new organizational challenges (e.g. bureaucracy, processes, politics) that may add to the company’s weaknesses and frustrations. Externally, competition and changing customer expectations will often redefine whether a company trait has become a new strength or a new weakness.
Blockbuster‘s rise and fall is a great example of a company that failed to understand itself, and its position within a rapidly changing market. With the introduction of Netflix type services and changing customer expectations, Blockbuster’s competitive advantage evaporated. What were once strengths (e.g. a lot of physical stores and access to customers) became weaknesses (e.g. too much overhead cost), while existing weaknesses grew in impact (e.g. limited stock and selection). Should they have acknowledged these market changes early, there was certainly a chance to stay relevant.
Since a start-up’s operating environment can change month-to-month, it’s critical that we regularly evaluate its evolution and position within the market.
Are we too optimistic?
It takes a healthy dose of self-belief, courage, and optimism to found a start-up company. This positive outlook on the future is foundational to the culture of most start-up companies, shared by almost all team members that decide to join a start-up and forego a safe job.
I, for one, certainly believe in my company’s eventual success, even though we’ve yet to make $1 of profit.
Fact is, a positive mindset is necessary to pursue dreams and work on unproven solutions. If we had any doubt in our success, we wouldn’t be pursuing this venture. We know that the odds are stacked against us, and yet, we decide to put up a good fight.
The upside of having an optimistic mindset is clear: We always have the energy to get back up after experiencing failure, and keep moving forward.
Yet, there is also a danger to our optimism: It can make us blind to our weaknesses. At start-ups, we have a tendency to turn a blind eye to our company’s structural problems, strategic threats, and other long-term issues. These issues tend to be ones that we can’t solve right away and necessitate company-wide collaboration. And because there’s always more urgent short-term issues to solve at a start-up, we tend to ignore our long-term challenges. With time, the team learns to turn a blind eye to structural problems and let their optimism take over.
What’s the result? Blind optimism can cloud the evaluation of a company’s true situation. And slowly, it can become culturally unacceptable to voice negative thoughts. Team members may not raise or report their frustrations and challenges, for fear of being perceived as pessimists or even worse, not believing in the company’s future success. Complaints and frustrations will often follow with someone saying “Yeah, but we work with really smart people. We’ll figure it out.” Like that adds any value to the conversation…
The leadership team is certainly not immune to blind optimism (they need it most!), so they may become unreceptive to team members’ concerns, shielded by ego and by the fear that there’s nothing they can do about the issue.
At that point, the entire company is no longer capable of objectively assessing itself. Everyone drank the cool-aid. As it is no longer looking to improve itself, the company will slowly become unable to face changing market forces, to resolve internal challenges, and ultimately, to hit its goals.
So allow me to share a word of advice: When assessing the company’s profile, ask team members to be brutally honest. In the wise words of my yoga teacher: “Observe differences, don’t judge.”
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