Let's add this tool. Let's add this process. Let's add this meeting. Let's hire more people. Let's add this department.
Add. Add. Add.
I've found that as startups grow they become bloated and inefficient if all the "adding" is left unchecked. All this adding without any subtraction increases the complexity or the effort required to get anything done which results in unhappiness in a company. Life too, in fact, mirrors this. In The Happiness Curve: Why Life Gets Better After Midlife, Jonathan Rauch explains the inverse correlation between complexity and happiness. Studies show that the happiest two phases in our lives as human beings are:
1) When we are kids and;
2) When we are post-retirement
On the other hand, we are the least happiest between 35 - 55 years old.
Imagine that. Our supposed peak years when we're the most educated, most experienced, making the most money, while likely married with kids are actually the years we're most unhappy! The culprit? Complexity.
Vishal Khandelwal illustrates the concept explained by Rauch excellently in the sketch below.
Startups experience that exact same happiness curve except there's no subtraction phase in most cases and the journey is something like this:
- True happiness: 0-20 people startup, some seed funding or bootstrapped, the team has a "family" culture working on an inspiring problem together. Everyone knows everyone and there's very little process. Things move fast with maximum agility.
- Mid-life crisis: 20-500 people, at Series A - D funding, lots of process being added, hiring of MBAs and a lot more bureaucracy is now encountered when it comes to getting things done. Culture changes, churn increases, and people start feeling like it's getting "corporate".
- Stable corporation: 500 - 100,000 people, IPO, each team member is a cog in a machine. It takes forever to get anything done and the output or $ per team member is poor. People know that it's a corporate and things will move slow - "that's just the way it is" mentality creeps in. Slow becomes normal and everyone accepts a base level of unhappiness because it's "corporate" after all.
- Cycles of reinvention or stasis: Stable corporations either re-invent themselves consistently (e.g. Apple) or they fail to evolve and become IBM.
Following that, the natural question is:
"How can companies enter a subtraction phase and reach that "abundant" state of happiness again?"
The answer is entropy. Put simply, entropy is a measure of disorder or chaos. Everything in the universe tends towards chaos.
“Everything that comes together falls apart. Everything. The chair I’m sitting on. It was built, and so it will fall apart. I’m gonna fall apart, probably before this chair. And you’re gonna fall apart. The cells and organs and systems that make you you—they came together, grew together, and so must fall apart. - John Green, Looking for Alaska
We build processes to fight this disorder as our startup grows, but we forget that processes themselves will fall apart or can be misused which will lead to further disorder. Ironically, our efforts to fight entropy can result in greater entropy and chaos. This is because we fight entropy using flawed systems usually ending up with:
- Bad processes implemented
- Too many tools being used across the company
- Multiple ways of doing the same thing (redundancy)
- Too many layers of hierarchy (resulting in politics)
- Too many meetings (meetings might create order and clarity but will crush speed of execution!)
Consider a corollary: When you buy a new product or item for your house, usually you would donate to charity or dispose of the old product that it replaces or perhaps it even makes multiple items redundant. For example, you buy a new all-in-one Washer-Dryer to replace two separate appliances i.e. a Washer and a Dryer. Imagine if you kept the old Washer and Dryer? You'd end up with a chaotic mess and run out of space pretty quickly, also nobody in the house would know which appliance they should use. Confusion. Complexity. Flawed systems.
Similarly, people and organisations must outgrow tools at different phases and leave outdated processes in the past, not keep them indefinitely as clutter.
So how do you identify such flawed systems in your company?
Enter the Operational Audit.
Once Unibuddy hit Series B and I started to notice we'd hit the "mid-life crisis" phase, I wanted us to focus on subtraction and designed an operational audit that would quickly identify flawed systems in the company so that we could take action.
Here's how it works.
I performed interviews with various team members across all departments in the company, making sure I covered the vast spectrum of perspectives from the most junior to the most senior, from individual contributors to managers and from New York to London to Bangalore (all office locations).
The interview consisted of these 10 questions.
- What is the task that takes the most time in your job or role? And what would be a close second?
- What are the top 3 most used processes in your department?
- What is your department's productivity metric (if it has one)? What does productivity mean to you?
- What takes way longer than it should? (or put differently, what are the slowest processes that impact your work?) ?
- What do you spend way too much of your time on that brings little value?
- What is the most efficient process in your department and why?
- What do you love doing in your job or role and would like to do more of?
- If you could wave a magic wand to change something, what would you change?
- Do you feel like you can make or suggest changes - and will you be heard? What is stopping you from changing things?
- Is there anything else you would like to add?
Every interview was recorded and detailed notes were taken which resulted in 20+ hours of video and nearly 60 pages of notes. I then analysed this data set, synthesised the answers and identified clear trends and themes.
Flawed systems, bad processes, poor tooling or even missing processes became crystal clear.
We got to subtract! We got to fix bad processes. We got to merge tools and delete redundant one's. We simplified.
So where do you start?
- Do the Operational Audit and then make it an annual audit (or do it at every new phase in the company such as when you raise a new funding round)
- Embed the habit of subtraction in the org: For example, monthly team meetings can have an agenda item that prompts “What can we archive?”.
And go from there...
Perfection is when you can subtract no more. There's perfection in reduction. In life, code and startups - ask what you can remove instead of what you can add.
"I saw the angel in the marble and carved until I set him free" - Michelangelo
Further reading if you're interested in exploring this topic: