You cannot simply scale your operating model; you need to redesign it.
Irina Rokosz
Start-ups have two main problems to solve:
- product-market fit, and
- customer retention.
In that order.
Everything else moves to the back burner. Not because it's not important, but because it's less important. For the moment.
Once the above two problems are solved, both the business and the company start scaling. And now there's a new problem to solve: complexity.
Where does this problem come from? The short answer is relationships. The more elements you have in a system, the more relations between them you end up with.
Brook’s law when applied to lines of communication
In a company of 30 people, sitting in the same location, and working on one product, operations take care of themselves. If at any point there is an issue with the product, the person who sees it first can simply stand up and yell to get everyone's attention. You can’t do that when you have 300 people, organized in multiple teams, working on different things, and sitting in separate locations.
However, when something takes care of itself, we, humans, tend to be left with the wrong impression. We think that either a) that thing doesn't exist, or b) it exists, but it will keep taking care of itself. And that's how we set ourselves up for failure — we simply stop paying attention.
Your operating model is like your company culture: You might not see it, but it exists. And if you don't see it, that means you certainly don't manage it — it manages you. And given that entropy is the natural state of things, that management feels like total chaos.
Moreover, now that you're rapidly scaling, operations cannot take care of themselves anymore. It all becomes too complex too fast. So what you do is double down on everything you’ve been doing so far that was working. The only problem is, that doesn’t work anymore. And you don’t know why.
Here’s the answer: Operations support the business and the organization. When both the business and the organization change, your operations have to change too. But if you can add 20 new people to a team and call it a day, you cannot have 20 people now producing the same report that one person was doing before. Or have 20 project managers leading the same project. Or 20 people talking to the same client. You have to start splitting and distributing tasks — and that essentially means you’re redesigning your operations.
Scaling only works when relationships are not involved:
- You have 2 apples, and you take 10 more: now you have 12 apples. End of story.
- You have 1 product, and you decide to start developing 5 more: now you offer 6 products. That’s what your customer sees.
- You have 50 employees, and you hire 500 more: now you manage 550 employees. How, though?
To make this a working system, you need relationships between these entities. Your ways of working are these relationships.