Have covered in my earlier blog post that employees and customers are the most important pillars of any company. Let’s now discuss the next critical pillar for a company and how we could use this knowledge for a successful scale up of a company.
The Core Function
All animals are equal, but some animals are more equal than others. - George Orwell
Each function in a company has its purpose and cross-functional team work is crucial to realize the ultimate business success. So the theory goes. In reality, each company has one or two core function(s) that does the key activities needed to accomplish the ultimate goals. Other functions are generally enabling or support in nature.
It's imperative for a senior leader, to identify the key activities of the company and ideally take the charge of the function that is expected to do those key activities. It's generally easy to find the core function, especially from the outside-in view of a company, here are few examples.
Tech is the core function in High-Tech companies, e.g., Apple, Intel, Symbian, and Tesla.
Marketing and Sales are the core functions in commodity companies, e.g., HUL and Cadbury.
Operations is the core function for B2B solutions companies or customer experience focused B2C companies, like Amazon, AirBnB, Sokrati and Uber.
Must point out that the above examples are deliberately oversimplified to drive home the point. Everyone in each function feels that he is critical to the business and sometimes its like a chicken-and-egg problem; for instance, marketing helps to realise commercial value of innovation, and without any use of an innovation its a dead piece of technology anyway. Though, that's true, marketing in itself can't create value in a tech company.
The fun of being in the driver's seat is that important decisions are local within the function and therefore could be made fast. However, cross-function collaboration is essential for overall business agility, and such team work should seamlessly happen if the leader in-charge is mature.
Leadership role in the core function is much sought after, and how to get into one is a career counselling topic (outside the scope of this blog post). However, if you get in the driving seat, how to approach it - from my experience - is what we'd discuss here.
Genuine understanding of the core activities, and any change to those as the market, ecosystem or industry evolves, is the absolute minimum that the person behind the wheel would seek to develop. Sometimes it is hard to drop predisposition, from prior professional/personal experiences, to develop such deep understanding.
Any fool can know. The point is to understand. - Albert Einstein
Highly effective way to develop such understanding is to genuinely listen - through focus group discussions, interviews, surveys, brainstorms and 1-2-1s with the key customers, partners and employees. Understand technology, competition, ecosystem and market gap to truly understand proposition of your company to the employees, customers and partners.
This is also an opportunity to arrive at key benchmarks e.g., customer happiness (e.g., through NPS survey), financial metrics (e.g., revenues/margins by geo, vertical, product/category), employee satisfaction (e.g., Gallup survey), and compare to those of the industry. This objective benchmarking would help to define key initiatives that need your immediate focus and the benchmark metrics would make it easy to outline "what good look like" somewhat quantitatively.
Statistics are used much like a drunk uses a lamppost: for support, not illumination. - Vin Scully
It's worth reiterating that doing this exercise in a most genuine possible way is important. Have seen many senior executives, even founders, swearing by almost arbitrary metrics (remember e-commerce companies' love for GMV in 2014-16 in India?).
In its bootstrap stage, a start-up would have everyone doing everything. However, as it scales, it would need more structure. First step is to define charter for the organization. The charter shall articulate organization's purpose, vision, key roles and interactions, important processes and metrics.
The roles that require close collaboration should be kept within a team/department. However, roles with limited interactions or with inherent conflict-of-interests should be kept in separate units. Like most things in management, there is no absolute right or wrong. Keeping roles together or independent have its own pros and cons - on continuum of speed/cost vs. quality, and it's OK to do a course correction or to re-organize as business environment evolves.
Symbian experimented with independent PMO and QA functions, but later decided to move those roles within design & development clusters as the company marched on its journey to be Agile-ed. It created some expected heart burn for many of us, but it was needed as face of the industry was transforming and slow pace of execution could have been even more fatal.
This exercise would define focus areas - roles, metrics, initiatives, that the leader would get the board's buy-in and approvals, and subsequently sponsor and drive the change.
We've only touched upon top of the iceberg so far, and now coming to the hardest part of leading the Core.
Should start with filling important roles with the most competent people possible. How to build teams and grow people is already covered in more details in an earlier blog post.
As a company become larger, it would inevitably require more structure that would need to be shaped via processes. Processes have lots of connotations and have been abused to make intelligent people into a bunch of muppets. However, at scale, there is no alternative to processes. Being hopeful that things would just work is plain stupidity and have not seen it work anywhere. So, how much to tune - between flexibility and predictability of business outcomes - is the choice. In the initial phase of the scale, flexibility is more important and would go for light-touch processes.
While local context and knowledge are required to decide and prioritize what should be done and how, below broad principles in scaling a tech/business operations function would aid in structuring identified initiatives:
- Standardise activities and artefacts so the customer experience is more consistent within the cohort (e.g., Top 10 clients).
- Automate mundane tasks to improve customer experience and team's morale. Automation is generally internal in nature.
- Productize part of customer experience that could make customer more independent (e.g., dashboards), improve interactions and/or enable the company to reach underserved prospective customers. Products are typically outward facing, to be used by consumers, customers and/or partners.
- Manage collective organization knowledge to enable more people to grow faster as the company grows.
A large part of my current team now works on well defined and standardised tasks with unprecedented SLA compliance. Over 30% of work is automated using engineering and analytics models. Launched knowledge platform and learning forums, with regular improvement and usage.
Symbian invested millions of dollars to productize developer tools - platform build systems, development studio, debuggers, etc. - in collaboration with ecosystem partners including ARM, Coverity, IBM and Nokia Carbide.
Driving such crucial change, while dealing with day-to-day aspects of running the business, would demand a hawkish approach and ton of energy from the leader. A dedicated project office, with experienced change leaders, could really make a whole lot of difference. However, most start-ups are not so resourceful. The initiatives are sometime so intertwined that the leader would anyway need to be involved to manage precarious balance.
To avoid turning out to be a paper tiger, the leader should set-up an effective governance approach to have complete grasp on the progress and roadblocks. Doing endless number of meeting is one way. I prefer frequent but succinct update emails and a weekly 30-minute meeting with all key people in the room. This joint meeting helps to bring everyone on the same page and enable constructive discussions. While update emails allow zoom-in or zoom-out flexibility based on the progress or lack of there of. I also like OKR (Objectives and Key Results) approach, a handy guide is available here.
OKR is currently being piloted within my function. The OKR approach may seem like old-wine-in-a-new-bottle, but some aspects of it are more effective than traditional approach; for instance, having everyone's OKR public enables more transparency and fosters better collaboration.
The key to success here is to remain completely faithful to key metrics and, without fudging and fidgeting, doing the right things for your colleagues, clients and shareholders.
No silver bullet for the riding shotgun!
My other blogs are available here.
About The Author
Over the past 18 years, I have helped multiple tech companies to scale following their bootstrapping phase. Early member of Symbian, which was at the epicentre of the Smartphone ecosystem for over a decade. I professionally grew at Symbian and literally 'felt' the Business Lifecycle through its struggle to survive following the emergent threats from Google (Android) and Apple (iOS). The journey started with my very first opportunity back in 2003 to help Symbian set-up it’s first offshore site. Had limited success initially, however this learning help us pivot to a better approach and within a couple of years, the site had 200+ product engineering team.
Over the years, I have done so across different domains (Analytics, Digital and Mobile), industries (eCommerce, BFSI, Mobile Apps, HighTech and Telco), functions (Consulting, Operations and Product Engineering) and markets (APAC, India and the EU and US).
I’m currently leading Merkle | Sokrati through the similar growth curve and now we are 300+ Sokratian in the team with most of the growth since our series B in early 2015. Together, we quadrupled the revenues, improved customer satisfaction (130% NPS lift) while building several new business lines. DAN recently acquired Sokrati for about USD 125m. This acquisition is a rare event in the Indian start-up ecosystem - it's among the less than a handful of all-cash start-up exits over the past decade (as of mid 2017).
I’m an engineer with an MBA from Indian Institute of Management Ahmedabad (IIMA).