VC guru Rob Bier knows from experience as an entrepreneur, investor, and consultant to big companies how businesses begin to head for failure when they don’t properly manage fast growth.
Rob Bier Explains the “Rituals” That Enable Any Company to Scale Fast And Smoothly
Rob Bier has helped over 40 companies in two decades to grow rapidly and without friction, including six that became unicorns (valued at $1 billion or more) and one a decacorn ($10 billion). These include Crypto.com, PropertyGuru, NinjaVan, Trax Retail, and Kredivo.
He was founder and CEO of Sparck (a fintech acquired by Citigroup) and CEO of the venture capital firm antfactory, as well as a senior partner at what is now Monitor Deloitte.
Bier currently is the driving force behind Trellis Partners , which advises companies of all sizes on scale-up issues, and author of a new book that is crammed with detailed tips on how to grow fast without the usual chaos that can be fatal, “Smooth Scaling: 20 Rituals To Build A Friction-Free Organization.”
“Over the years I noticed that my clients had the same problems over and over as they grew, often at roughly the same stages in the scaling process, like leaders not being able to keep pace with their departments, internal conflicts in teams and cross-functional relationships, and staff who devolve into tribes,” Bier told Startup Savant. “Many CEOs of companies of all sizes ignore these issues until they become so severe they have to be addressed, but usually with ad hoc solutions that do not solve the root causes, usually just by throwing more money or people at what they feel is holding the company back.”
He learned that to build a high performance scalable organization requires more than trying to implement pieces of good advice, such as learning how to give feedback, interviewing job candidates, or applying employee engagement metrics.
And fundamentally there is a divide between companies which see themselves as complex machines that need to be programmed to maximize results and those that view their organizations as communities of people sharing values and purposes that need to be nurtured.
The high-performance companies of the first type are great at productivity, making products and delivering services efficiently, while the latter’s workers are not only happy being with the company, but enjoy doing their work. Companies that want to achieve greatness need to integrate the best practices of both types and manage growth in a wise way.
“Without a unifying framework, founders and other leaders find themselves playing Whack-a-Mole, reacting to a never-ending stream of organizational and people problems,” Bier wrote. “They can’t see upcoming challenges or how they are interconnected.”
Startup CEOs are usually told to “grow as fast as possible” by VCs who only need a few companies they invest in to experience hyper-growth. Bier says that this advice can be right for those with a first-mover advantage, new companies which are mostly software, or others who already know they have a business model with viable economics.
But for most young firms, trying to “blitzscale” results in lowering the quality of their products or services and high customer churn, he reports. The same can be said of what he calls Day Zero organizations, whether they be a new team or department , drawing on his experience and client cases (but disguising their identities).
“Startups or small teams have many advantages that are largely the result of their size and are taken for granted, but as headcount grows linearly, organizational complexity grows exponentially,” he said. “For example, if you have three people there are three possible pairs, but if you add a fourth employee you are adding three more pairs and if you have 30 people that results in 435 pairs.”
He refers to studies that show that the maximum number of meaningful relationships for any group is 150 and the number of meetings needed to be able to maintain them skyrockets.
“When I started coaching high-growth companies 12 years ago, I never imagined that organizational friction was going to be the focus of my work because I shared the common belief that dysfunctions like silos were real problems for large, mature companies,” he wrote.
Rituals Rather Than Training
Unfortunately, he says, trying to improve results through training doesn’t generally work well. First, its goal is to upgrade skills quickly, but the tools and techniques taught gradually lose their stickiness. High-growth companies rarely will invest the time and money needed to sustain everyone’s skills. Competence and the opportunities for practice vary widely without that.
What Bier calls rituals are what go beyond training and involve deep dialogue to search for answers to challenges that result in everyone contributing to a clear course of actions that become organizational habits. Ritual 1 is “Thinking Together.”
“This kind of dialogue beats business systems hands-down,” Bier explains. “If you took over a company with excellent systems, but terrible communication, it wouldn’t take long for those systems to be spewing red alerts all over the place.”
One positive example of avoiding this is PayStep, a Dutch fintech handling B2B payments, which made continuous learning a fundamental part of how it grew very fast successfully. The learning and decision-making process often occurred in “walk and talk” trips around the office complex for up to three loops that would each take 15-20 minutes.
Bier says to just start with just a couple of rituals until they are mastered by the top leaders and then gradually spread them through the organization.
Ritual 2 is “Sharing Your Personal User Guide (PUG).” This means sharing a narrative about who you are as a colleague and how others can find ways to most effectively work with you, based on your traits and talents.
Ritual 3 is “Turning Tensions Into Trust.” Inevitably differences lead to tension even among the best of relationships. Bier says to lower it by taking responsibility for your contribution to this and acknowledging their views, good will, and skills.
Ritual 4, “Effective Delegation and Aligning on Autonomy,” is about how leaders at any level can delegate tasks without micromanaging (always counterproductive), and has to be applied appropriately depending on the responsibilities of the individual. The goal is to get them to the point where they are empowered to make decisions by scaling fast, but smartly.
Ritual 5 is “Coaching a Pain Point” and rests on managers listening carefully to what workers say about what is difficult to do, providing some options based on experience of the manager and those of others who have achieved success in that area.
Ritual 6 is about getting honest feedback when the topic is uncomfortable and may require some tough love. Bier advises building on the Personal User Guide (Ritual 8) and then have discussions on how to work better together. Then ask for permission to give them feedback and be sure to do plenty of listening.
Ritual 7 is about having regular one-to-ones between managers and reports to find out where their pain points are and sharing mutual feedback.
Ritual 8 is the need for “Deep Dive Meetings” that cover the range of strategic, commercial, operational, and organizational decisions that need to be made, requiring extensive planning. To be successful, only important issues should be addressed, the key questions need to be decided in advance, no interruptions should be allowed, and all devices need to be switched off.
Ritual 9 is about preparing to have a wide-ranging discussion among executives to find out what issues need to be coached, with the understanding that top management wants to know what topics and positions the workforce believes need to be addressed.
Ritual 10 addresses the fact that a small enterprise’s operations might be managed by several founders and leaders appropriate to its size, but when it grows to a larger level that requires a Chief Operations Officer, that individual may not be prepared for the same role if the enterprise scales rapidly. Bier advises “future-proofing” the CXO with frequent conversations about a roadmap for the responsibilities they will have to take on or as the firm grows or whether heading a large department might be a better fit. Bringing in an executive coach for this process can be helpful.
Ritual 11 is to establish better cross-functional collaboration by asking key stakeholders to state their goals and practices for a fast-growing firm and then bring them together to discuss their answers.
Ritual 12 is to address the results of Ritual 11 that may have generated confusion or appear to be in conflict.
Ritual 13 advises sharing feedback between teams from 11 and 12 and doing surveys of the reactions to synthesize solutions that reduce potential friction.
Ritual 14 is about preserving the culture and values of the company, including empathy, psychological safety, and intellectual humility, by maintaining transparency and connections.
Ritual 15 emphasizes maintaining trust between staff and top leadership through honest communication, including candor about negative events.
Ritual 16 is about managing time and priorities, assigning blocks for experimenting with delegation.
Ritual 17 is how to redesign meetings so that they are efficiently run for the most important leaders to address the vital issues.
Ritual 18 recommends surveying participants about how meetings could be improved and then cleaning them up.
Ritual 19 considers redesigning the organization, starting with brainstorming to pick the top three issues where there is a lot of support for testing.
Ritual 20, “Run an Information Marketplace,” notes that staff are often overwhelmed with details about too many things. It would be better to do a regular virtual or in-person conference with a limited number of participants.
“Every organization develops internal fiction as it scales, but your people already know where this is happening, whether because of bureaucracy or politics, meetings that waste time, which managers aren’t giving clear directions, which teams are dysfunctional, and the groups that are not getting along,” Bier said. “Your first step to improve your culture is to access that knowledge by creating a culture of trust where people are not afraid to be candid and have conversations in a safe and constructive way.”
Of course, to master Bier’s detailed advice on the rituals and apply them to your particular startup or mature company, you and other leaders will need to read “Smooth Scaling” several times, highlighting what resonates for your most challenging issues.