The Paradox of Growth

Growth creates complexity, and complexity is the silent killer of growth.
1) Overload- too fast scaling
2) Stall-out – complexity and dilution of focus and energy
3) Free fall – can’t identify root cause
Abhor complexity and bureaucracy – clear obstructions in the way of clear execution.
– obsessed with detail
– celebrate people at frontline

1) Key to achieve sustainable growth

Passion for success
We do not have much money, we do not have many stores, but at least I can be enthusiastic.
1) insurgent mission
  • bold mission
  • spikiness
  • limitless horizon
2) frontline obsession
  • relentless experimentation
  • frontline empowerment
  • customer advocacy
3) owner’s mindset
  • strong cash focus
  • bias for action
  • aversion to bureaucracy
Insurgent Mission
stay true to your mission
Frontline obsession
– frontline employees
– customers
– every detail
Owner’s mindset
– strong cost focus
– bias to action
– aversion of bureaucracy

2) Crisis of Growth

if properly addressed can be huge opportunity
Overload
– systems and processes need to scale
– different skillset and talent required
Stall-out
– complexity
– bureaucracy
– it’s common
– it happens fast
– it’s an internal problem caused by growth
Free Fall
– not viable business anymore (competitor or market)
– didn’t adapt fast enough
– too many distractions
Causes
– unscalable founder – out of his depth
– lost voice from frontline
– erosion of accountability – dysfunctional and unaccountable decision making
– revenue grows faster than talent – wrong people
– bureaucracy – drowning in process, complicated, meetings
– too many distractions – products, acquisitions
– hierarchy – keep it flat
– politics – complexity of matrix org
– Energy vampires – delay decision, more analytics, more meetings
– Customer experience fragmentation – everybody refers customers problem to another department
– lose noble mission
“People think focus means saying yes and focusing on it. It actually means saying No to the hundreds of other good ideas.”
– Steve Jobs

3) Combating overload

– open communication lines
– celebrate and reward frontline heroes
– make constant improvement a focus (forums, recognise great ideas)
– Codify best practices
– keep focus on core principles
– introduce stakeholder happiness surveys
– celebrate people reinforcing values
– open office
– open office floor
– embrace conflict (let managers put on different hats)
– consistent lower end metrics which require instant action
– call top performer meetings (recognition, risk management, cut through bureaucracy)
– dream big
– promote fast
– fast feedback
– invest in training
– promote from within
– empower leaders
– zero based budget – re-asses redeploy

4) Reverse stall-out

Reempower and reinvest in people
– spend more time on customer
– bonus pool
– rehire veterans
– honor badges for exceptional customer service
Lower cost & complexity
– simplify portfolio
– free up resources
– reduce operating costs
– develop simpler strategy
– reduce complexity in design, supply chain, product and process
– collect ideas from everyone how to improve
– empower people who don’t have vested interest in past decisions
Entrepreneurs
– from outside – acquire companies
– partner with outside entrepreneurs
– change ownership (go private)

5) Stop Free Fall

– sell underperforming business units
– re-empower frontline execs in senior meetings
– simplify / take out complexity
– use customer support staff to support customers, invest into it don’t reduce to squeeze margins, NPS
1) Build a refounding team
– change senior leadership team
– needs new energy (not depressed and tired)
– rebuild future not defend past
– may need new skills and capability
– hard for people to recognise failure easier new people with open minds
– this needs to be very fast
– time is lost
– don’t let the newcomers absorb the old ways
Move Quickly
2) Focus on core of core
– noncore assets, departments, functions, processes – eliminate
3) Redefine insurgency
– establish vision / purpose
– align everyone on it
4) Rebuild front line
– new language (as village, CEO being mayor) increases accountability
– good customer service awards
– customer feedback on walls
5) Invest massively in new capability
– embrace the future and think about what you need
6) Wild card: consider privatisation
– buys time
– potentially attracts talent
– reduces external distractions
– allows to focus on internal

6) Action plan for leaders

Self-awareness
– real root cause metrics
– listen to the right people in the company
– how you spend your time has symbolic value
Common ambition
– clear actionable mission
– reach out directly to frontline, understand problems and customers
Create a compass
– create non-negotiable guidelines for the company
– get input from employees
– turn it into action plan
Decision skills
– often orgs are overmanaged and underled
– Managers do things right, leaders to the right things
– efficiency of manager vs effectiveness of leader
Janusian Thinking
– consider opposites simultaneously
Say No to Say Yes
– find the right good idea
Use power of 10x
– don’t invest into everything achieving consistent mediocracy
– willingness to invest 10x the normal resources to great ideas
“Hidden” root cause
– pull out the real problem
– ask the 5 Why’s
– be active listener
Invest massively in Next Generation leaders
– never found anyone who said we overinvested massively in talent
Invest preemptively in building capability
– training is a big deal
Focus on long term goals and horizons
– invest in it
Guardians of speed and agility
– simplify
– kill energy vampires
– decide on who has the “D” (power to decide)
– reduce org layers
– reduce ambiguity around mission
– realign resources (zero basing)
– customer experience owner
– monday meetings to resolve roadblocks
– find repeatability
– reduce constant new analysis from leaders
Share burden of leadership across organisation
– you and everyone else owns the problem (not pushing it around)
– ban talk about “we’ve done this” “we do things this way”
– ask for foregiveness, not permission to experiment
– one team!
– pair veterans with newbies (experience and energy)
Founders Mentality.jpg
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