Smooth Scaling

1. Scaling requires balancing Productivity and Positivity

Sustainable performance is the sweet spot where Productivity and Positivity are both high—where your team achieves great things and feels good about their lived experience as they achieve them.

Productivity and Positivity defined. Productivity is about getting the right work done efficiently, while Positivity focuses on making people happy doing the work itself. Both are essential for sustainable high performance and successful scaling.

Measuring success. Leaders should assess both Productivity and Positivity using a 2x2 matrix:

• Frustrating: Low Productivity, Low Positivity
• Comforting: Low Productivity, High Positivity
• Intimidating: High Productivity, Low Positivity
• Energizing: High Productivity, High Positivity

Balancing act. Avoid the trap of flip-flopping between focusing on Productivity and Positivity. Instead, strive to create a mutually reinforcing virtuous circle where both elements support each other.

2. Trust is the foundation of high-performance organizations

Trust is what enables us to start up these mountains called interpersonal frictions. Skill is what enables us to navigate them successfully.

Building relational trust. Relational trust goes beyond transactional trust and is essential for having crucial "us" conversations that resolve tensions and address interpersonal issues.

Proactive trust-building. Use rituals like sharing Personal User Guides (PUGs) to jumpstart trust-building before tensions arise. When conflicts do occur, use the Turning Tensions into Trust Ritual to process them constructively.

Leadership role. Leaders should:

• Encourage moving all key working relationships towards increasing levels of interpersonal trust
• Address "elephants in the room" to make difficult topics discussable
• Foster open dialogue and problem-solving

3. Effective dialogue drives organizational success

Dialogue is not just speaking and listening; it's the act of learning and thinking together, which we can also call collective thinking.

Collective thinking benefits:

• Better ideas, solutions, and decisions
• Deeper commitment to decisions
• Higher levels of engagement and satisfaction

Overcoming barriers. Replace the right/wrong frame with intellectual humility, assuming both parties are partly right. This promotes collective thinking and better outcomes.

Ladder of inference. Use the ladder of inference to understand different perspectives and find better solutions. The Thinking Together Ritual involves deep listening, asking questions, and understanding each other's perspectives, leading to discussions that are both Productive and Positive.

4. Rituals transform skills into habits for sustainable growth

Rituals are the pathway that leads from skills to habits.

Limitations of traditional training. Training often fails to create lasting change because:

• It isn't sticky (skills decay over time)
• It isn't viral (doesn't spread easily to new hires)
• It doesn't hold up under stress

Power of rituals. Rituals:

• Embed skills deeply through repeated practice
• Create habits that persist even in high-stress situations
• Can spread virally throughout an organization

Implementing rituals. Start with one or two core rituals, practice them to mastery, and then expand. Make them part of your daily workflow and encourage others to adopt them.

5. Great managers are key to scaling successfully

Managers are the single biggest shapers of the Productivity, Positivity, and scalability of your organization.

Manager impact:

• Drive Positivity by making people feel validated
• Influence Productivity through effective delegation and autonomy management
• Shape culture and set precedents for behavior

Developing great managers. Invest in training managers early, focusing on:

• Effective delegation using the Four Stages of Autonomy framework
• Coaching skills to help employees grow and become more autonomous
• Providing candid feedback using the Contracting for Feedback Ritual
• Conducting effective one-to-ones that include delegation, coaching, feedback, and appreciation

Scaling considerations. As companies grow, they need to transition from functional heads to true CXOs who can contribute to enterprise leadership and focus on cross-functional collaboration.

6. Cross-functional collaboration is crucial but challenging

Few leaders of high-growth companies spend much time thinking about whether their people are holding invaluable "us" conversations. The assumption is that "it" conversations are the ones that drive results—and that "us" conversations are at best a feel-good factor and at worst a risky and uncomfortable endeavor to be avoided at all costs.

Challenges in cross-functional work:

• Different goals and priorities across departments
• Resource imbalances
• Lack of informal communication opportunities
• Lower trust levels
• Unclear decision-making authority

Overcoming obstacles. Use rituals like:

• Set Up Cross-Functional Work for Success: Align on goals, priorities, and communication methods
• Managing Our WTF Moments: Navigate misunderstandings and conflicts constructively
• Cross-Team Feedback: Improve collaboration through structured feedback exchanges

Culture of openness. Encourage "us" conversations to address tensions and build trust across departments, preventing silos and fostering effective collaboration.

7. CEOs must evolve their mindset to scale effectively

By building an organization and a culture that no longer needed her to do that. She now sees her job as setting the vision and strategy, dealing with investors and external stakeholders, and shaping the organization and culture—plus handing all the unexpected things that come with growth.

Three CEO mindsets:

1. Action Mindset: Focused on getting stuff done (typical in early-stage startups)
2. Control Mindset: Ensuring others get stuff done (common in growing companies)
3. Scaling Mindset: Building an organization that gets stuff done (necessary for true scaling)

Developing a scaling mindset:

• Focus on organizational development and culture
• View problems through both business and organizational lenses
• Develop high organizational intelligence (OQ) to anticipate and address issues
• Practice giving away responsibilities ("Legos") to enable growth

Continuous evolution. CEOs should aim to give up at least 25% of what they do every year to create capacity for the next phase of growth.

8. Organizational design orchestrates key interactions

The purpose of organizational design is to orchestrate the right interactions between the right people at the right frequency.

Beyond decision rights. Organizational design is not just about who makes decisions, but about fostering the right interactions to drive Productivity and Positivity.

Key design elements:

• Meeting structure and frequency
• Communication channels and norms
• Cross-functional processes and collaboration mechanisms
• Reporting relationships and team structures

Adaptive approach. Regularly assess and adjust your organizational design to ensure it continues to support the right interactions as your company grows and evolves.

Last updated: August 14, 2024