Get That Scale-up Mentality: Five Lessons (for Big Companies) From Britain’s Best-connected EntrepreneurThursday 14 November 2019
Before launching the employee success platform Learn Amp, Duncan Cheatle ran The Supper Club, an entrepreneurs’ network. In that time he reckons he worked with >1,000 scale-up founders. At a recent CMI Companions roundtable, hosted by CMI membership director Matt Roberts, Duncan reflected on a few areas where large corporates and public-sector bodies could pick up lessons from high-growth companies.
Make Decisions Faster
Entrepreneurs say this a lot when they work with corporates: “How slowly do decisions get taken in big organisations!” How much slicker our public sector procurement would be, they say, if decisions got taken faster. Duncan used the example of procuring software. This is the kind of decision that can take years and get incredibly complicated in big corporates. Company founders, by contrast, tend to be part of an ecosystem where they can ‘find out stuff’. They know who to ask about the best HR/payroll/project management etc software. They don’t need to rely on lengthy research. Instead they ask what the market is using – that’s usually the most reliable test.
Politics can be stultifying in big corporate land, said Duncan. The way to avoid it is by creating an environment where leaders a) listen to feedback and b) can assume that the person has the best interests of the business at heart. Rather than constantly trying to read between the lines. To achieve this kind of positive vibe, some organisations are going for the ‘radical candour’ approach (pioneered by Kim Scott). This can be a bit too bracing for some people, mind, so at Learn Amp they practise a milder form called ‘benevolent honesty’. Duncan said that by embracing such a spirit, things happen much faster.
Manage Risk, Not Compliance
A subtle but important point. Entrepreneurs and company founders are obsessed with risk (“Only the paranoid survive”) but, equally, don’t see box-ticking as the right mindset for avoiding it. The big mistake, said Duncan, is to ask compliance people to manage risk. Signing something off as safe is not the same as doing everything you can to mitigate risk.
‘Growth hacking’ is a state of mind that’s celebrated in entrepreneurial companies. Fundamentally it’s obsessing about growth at the lowest cost. In most companies on the up, funds are limited. The last thing you want to hear when you’re hiring someone in is, ‘what’s the size of my budget?’ Duncan suggested that more large companies should consider zero-based budgeting (a method of budgeting in which all expenses must be justified for each new period) and minimum viable products (MVPs). “If you approach things with this mindset, you can often achieve in two or three days what others might achieve in two or three months.” It’s all about getting products out into the market fast. Then test, test, test. “If you can hire someone who’s been through a series A or B funding, get them!” said Duncan. They will have an entirely different philosophy about getting things done.
Do Talent Management Different
Scale-ups know that they’re bound to hire people who won’t last for more than a few months. Job tenures are shortening, especially among the young. So be flexible about who to bring in when, said Duncan. When making hiring choices, turn to your ‘mavens’ about who you should hire. And think about employee lifetime value: people may not stay with you forever but, while they do, maximise their contribution.
Also avoid annual appraisals. No-one likes them. Instead, have regular check-ins (maybe weekly or monthly). Get to know your people on a personal level. Consider getting team members to write down what they’d say about themselves in their obituary. Then rewind to ten years out; then look nearer out. In other words, don’t start by asking about one-year budgets; try to understand what people want to achieve in life and work. Having regular semi-personal conversations also reduces the risk of people resigning unexpectedly. If you have a true personal relationship, there’ll be a bit of ‘moral buy-in’.
Finally, said Duncan, measure the right stuff. Consider using OKRs (objectives and key results, as pioneered by Google). This is a way of setting goals that trickle up. Any world-class company will have two or three north-star goals or metrics. Critically, your people need to understand how their individual role connects to the overall business objective.
At CMI, we’re hugely privileged to have contributed to many people’s management and leadership journeys. Take a look back at some of the people we’ve interviewed for some top tips and exclusive insight.
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