A different kind of “scalability”
Recently I have been spending a lot of time building the management team at 10gen. Because 10gen is doing so well, we are lucky enough to have a lot of candidates who are on paper very well qualified. But as I look at them, I think about their scalability. I don’t look at it in the traditional way of “will they be able to grow with the company” as the team grows; most of them already have proven that. Instead, I ask will they scale down to managing a smaller team at a small company. In my experience, this is actually a harder challenge with a higher failure rate than stepping up to manage a larger team. What’s so hard about scaling down? In my opinion, there are 3 big challenges in scaling down:
- Contributing at multiple levels
- Making people decisions based on your own calibration of absolute performance
- Earning your credibility from scratch
A little bit on each one:
Contributing at multiple levels:
When I joined MarkLogic I wasn’t just the VP of Services:
- I was the project manager for the first few projects we did
- I was the architect for the first few projects we did while the consultants were ramping technically
- I was the executive that the customer could hold accountable for project success
- I was the practice manager deciding how many consultants to hire, when to hire them, and what skill sets they needed
- I was the consulting LOB owner establishing business practices, pricing, and infrastructure for the team
- I was a member of the executive team of the company that evaluated market opportunities and set corporate strategy
Many managers can do one or two of these things; a reasonable number can do 3 or 4, but very few can do all 6. Further, having one person do all 6 at the same time is even harder; if you’re the executive responsible for customer satisfaction, it helps to be able to throw the project manager under the bus and replace him if something goes wrong. Hard to do when the project manager is you.
Making people decisions based on your own judgement of absolute performance
In a large company, it is relatively easy for an executive to evaluate the performance of his team:
- Wisdom of crowds: just as the audience usually knows the answer on who wants to be a millionaire, in a large team there’s generally a fairly accurate public opinion on who is competent and who isn’t; if an executive bothers to listen they’ll make pretty good decisions in most (but not all) cases
- Relative performance: when you have a mature team of 30 sales people, you can replace a few reps from the bottom periodically and improve the team
In a small company, neither of these is good enough:
- The crowd is neither big enough nor diverse enough to be wise in many startups or small teams
- What if the average in a small team begins either very high or not high enough? How do you know if (rarely) your weakest team member is actually quite good or (much more commonly) your best team member is only pretty good?
At a small company you need to have an internal sense of greatness vs goodness vs mediocrity and be willing and able to apply it.
Earning your credibility from scratch
Lots of big company executives are “great with customers”. Not surprising; it is important for career advancement so most people who have made it to that position have that skill. But what underlying competencies does it take for say a head of consulting at a large company to be “great with customers?” It isn’t rocket science; they need to be able to:
- Show up; customers will be happy just to be handed the business card in person
- Be respectful and listen to the customer
- Play the part, tell the customer how important they are and how focused the company is on their success in a reasonably credible way
They inherit credibility from their business card; I’m fairly sure I could hire a C-list character actor to do a lot of those meetings and with a bit of time to rehearse they’d do pretty well.
When you show up representing a small company, the tables are turned. The company’s credibility is at stake as customers or prospective customers interact with its executives. To earn credibility, you need to be able to:
- Demonstrate mastery of the domain; you should be an expert in whatever business you are in
- Convince the customer that your business will succeed; they won’t buy a technology, no matter how good, from a company they don’t think has a future
- Convince the customer that their project will be a success; nobody gets fired for buying IBM (or Oracle nowadays); but if they choose an alternative technology, they become much more accountable for the project’s success
In the end, you’re asking the customer to bet their career on you. For every ten executives who can ride a great business card to credibility, you’re lucky to find one who can create that credibility from scratch.
Now you see why I think scaling down is so much harder than scaling up. Shameless recruiting plug: if you are or you know the special executive with an ability to contribute on multiple levels, a strong internal sense of the difference between greatness, goodness, and mediocrity, and an ability to create your own credibility from scratch, drop me a line.
— Max
Max Schireson's blog 
I would agree 100% with all that, especially the bit about the business card pre-judging success. Like hiring a guy with an MIT degree into an engineering slot.
I have observed that at a certain level at big companies people have crappy networks. First, the networks are almost exclusively up. It’s not hard to get A players on your team at a big company – as you point out, it is easy to find out who is A and who is B. So with big teams, you network up. That won’t help you recruit at Small Co.
Thus you network up. You network with A players so that you have their protection and access to their power. You network with B/C players to help them to so you can gain favors from them. Also because, frankly, they might get promoted in-house or recruited out and then you have a higher placed contact.
I would observe that these networks aren’t peanuts, but they’re not really helpful when you downscale your span of control into a startup. That’s when the networking down the organization into A/A+ players would be most valuable.
-XC
Thanks Cliff. Interesting observation about the networks.