What’s the best structure for Growth? Part 2
What’s Stopping your Growth?: How to identify constraints and blockers within your organisation
In the second part of this ‘What’s the best structure for Growth?’ three-part series, Yara Paoli, founder of GROWTH OS, looks at the questions you need to ask of your organisation to overcome structural blockers and unlock further growth of your business.
In the first part of this series, I explored how ‘external’ growth blockers and constraints - i.e. those revolving around your customers or users - could be identified and overcome. In this second part of our series, we look inward and examine how to optimise your organisation for growth from the point of your employees – the people who ultimately deliver and unlock growth for your business.
Here, it’s vital to examine these three core areas:
a) How a person or role functions within a team b) How your teams function - are they capable of executing growth? c) How cross-functional your teams are, within in your organisation
In the same way that you must ask yourself questions about what’s blocking your growth from a user number and revenue perspective, you must now ask a set of questions to enable you to identify the reasons that are preventing your people from delivering growth at an organisational level. These questions should revolve around the expectations, the employees’ role definition by function, the clarity of direction, the objectives setup processes and the rules that govern your people interaction.
The Questions You Must Ask About Your Organisational Setup
Are your employees clear on what growth means? For the company and for themselves?
How can your employees actually achieve growth?
Do they have the tools they require to grow at their disposal?
Are expectations and targets set out clearly and then redefined as individual and company growth happens?
Is there a personal purpose and meaning that employees find in unlocking growth for the company?
Is there a true growth mindset within your business which is enabled and encouraged?
Are employees given true ownership of areas that empowers them to make an impact?
Do your people feel psychologically safe enough to express their true opinions, share ideas for innovation, learn from their mistakes and grow? Or is there a blame culture?
Is the current setup favouring collaboration across different teams and functions within your organisation?
Is it clear how employees get value from their hard work? When and why do they get rewarded?
Are there clear and tangible motivators for employees, both in the short term (eg quarterly bonuses), medium term (pay rises and promotions) and long term (share options and equity)
Does the company culture truly value business impact, or does it favour those better at showing off, doing shiny presentations and climbing up the hierarchy ladder?
Is more time spent on politics than actual value-oriented and impactful work?
When asking such questions, it’s vital that senior leaders speak with all levels of your organisation. You should arrange meetings for small groups, or one-on-one meetings with CxOs. This enables CxOs to fully understand blockers that are occurring on ‘the front line’. And it gives everyone a direct line to those with the power to make real changes, especially those who may not always be heard due to organisational hierarchy.
It means that problems - such as bad managers or management - are allowed to come to light, which otherwise couldn’t, due to politics or fear of speaking out. A junior staff member is unlikely to tell his or her manager directly that they are a bad manager, but they are much more likely to explain problems to a neutral person or one that is not directly connected to their management. And it’s vital that the real problems are identified, if they are to be solved.
These last questions, you might think, are more related to culture than structure. But if you start questioning your structural inefficiencies you might end up discovering that the root causes of your slowed or stalled growth are due to a lack of good growth leadership and poor growth enablement as well as the resulting poor cross-functional collaboration.
To illustrate with fictional examples, such questions might reveal problems within your organisation such as:
Staff are unclear about what their priority focus should be
The route to promotion is unclear and seems to be more about connections with senior staff than making true business impact
Excessive frequent changes to company processes are creating a lot of waste in terms of unfinished products and never-completed features.
Employees feel important news and changes are not communicated well so feel ‘out of the loop’, creating a gossip culture which is becoming toxic
Constantly re-structuring is eroding stability and employees no longer feel comfortable
Employees know how to achieve growth, but are limited because they don’t have the correct tools or ownership to actually make impact
Employees don’t feel they are growing or learning
Frustration is coming from teams who do impactful work, but credit is taken by managers
Employees are reluctant to challenge ideas or orders coming from senior staff, as they don’t feel comfortable - even when they know such ideas are bad
Teams find it very hard to collaborate with other parts of the business, due to differing goals and targets - which is limiting business growth overall
Employees feel under rewarded and under appreciated
There is a culture of self-promotion where more credit is given to those who shout about their work internally, than those who make actual business impact
Are your people aligned on growth?
An often seen problem is that different parts of an organisation have different, or even competing goals and growth targets. A simple example that I have personally experienced was that one of our product engineering teams were tasked with reducing page load times, whilst a marketing team wanted to add value to these same pages by adding more frequently refreshed information (and thereby increasing load time). The engineers assumed that the lower page load times = happier users, whilst the marketing team assumed that increased information = happier users. Neither goal was necessarily wrong or right. What we needed to do was to zoom out, to understand what impact each goal would have on our key metrics. Did reducing the page load time increase any of our key metrics of Acquisition, Activation, Retention, Referral or Revenue - and how did adding more up to date information to the page affect those same metrics? As you can see from this example, working in silos, and on assumptions, without looking at the bigger picture, leads to individual teams potentially prioritising the wrong things, and actually working against each other, wasting resource, and stifling rather than growing your key metrics.
How did we change our organisation to get growth?
Due to many similar examples across our organisation, we decided to change how our teams were made up, and the goals they were each to pursue. Rather than having teams segregated purely by discipline (engineers, marketeers, sales etc) we instead created mixed-skill teams with a common goal and very importantly: total ownership of a single product area.
This meant that any given team would have all the skill sets and authority necessary to create, maintain and grow a product, that everyone on that team were all pulling in the same direction and that they were no longer competing against other parts of the business.
For example, a new team was created for all ‘User Communications’. That is, all emails, push notifications and text messages that we sent to our users. This team was composed of experienced engineers and marketeers and given clear goals with measurable metrics and targets around activating users, retaining them, and increasing revenue.
With everyone now united for a common goal and easily measurable targets, the team could quickly work on experiments to improve those metrics, independently of any other part of the business. This massively speeded up the test cycles, and led to significant growth in this area. And equally as important, it created a team that were happy, challenged and proud of their products. Because they were genuinely able to make a positive impact on the business metrics.
Alignment on goals owned and the full availability of cross functional resources led to a set of growth-oriented autonomous teams, that were empowered to consistently and systematically run experiments based on their hypotheses on how to improve their core metrics (aka making the user experience better through core product value distribution via engagement channels in the example above).
This process of course becomes much easier and faster as you create the right environment, mindset and process in your organisation. This is important as the more experiments you run the more likely it is you will grow.
The Problem With Personal Power
Another example of a problem common to many growing businesses is one of ‘personal power’. Take a successful scaleup that is expanding in more and more markets and has one VP (Vice President) for centralised growth activities, one for regional growth activity, one VP of sales and one VP of product.
They might develop their recruitment plan in siloes without consulting each other fully or getting to a deep understanding of how to increase efficiencies and growth while reducing (or at least not creating more) waste.
This happens not because it’s the best thing to grow the business, but because each VP wants to grow their own teams more than their peers. Personal benefit and a sense of power becomes more important than actual impact on the growth of the business.
Such changes are not always bad. Certainly, a good leader may be able to deliver growth by identifying opportunities where recruiting more staff may fill gaps that are blocking them from delivering more growth. However, be sure to analyse requests for new hires carefully; sometimes when we dig into the individual leader’s motivation for wanting to recruit more people, it’s actually because they desire to look and feel more powerful, by having a greater number of employees ‘under’ them.
Unfortunately for them and for your business, very often we find that increasing the number of employees does not correlate directly to increased business impact. This is where our structure will help us reveal the cracks of bad business culture and senior leadership and identify, not only the really necessary hires and changes in the structure itself, but also the much needed review of cultural values and guiding operating principles for a senior leadership that seems to be giving more importance to corporate power than actual enablement of further growth for the business and its people.
To conclude, the best structure for growth is the one that helps you build a functional growth operating system and is shaped according to your renewed needs and company ambitions but that operates according to a clear set of guiding growth-oriented principles and a strong user-value centric leadership.
In the third and final part of this Growth Structure series, I will explore the different organisational structures that are possible, give examples of problems they attempt to solve, and discuss which is better for each stage of your organisation's growth.
About Yara Paoli
Yara is currently Chief Growth Scientist for Growth OS, a validated framework for sustainable long term growth, and she is board director and growth advisor for Kolonial.no, the leading Norwegian online grocery retailer.
She is also a growth mentor for the cross-border accelerators ChinaAccelerator and MOX (operated by the venture fund SOSV, which has $700M+ AUM and operates 5 global accelerators) and Singapore She1k, enabling dozens of start ups and innovating companies across the world to implement the best growth science and culture to build their own growth operating system.
Prior to this, she was the global VP of Growth at Skyscanner, where she was part of the company’s explosive growth success story, going from a 32-employee tech start-up, to a 1.4 Billion GBP acquired company with over 1000 staff.