Next-gen workplace qualities attract tech talent precisely because of the free-to-be approach that Silicon Valley is famous for—there’s a clear connection to the founder’s vision, and the work feels collaborative rather than delegative. But culture is one of the hardest things to maintain when company hits a phase of explosive growth. A startup sandbox only holds so many—sooner or later, you’ll need to add more architecture to manage the new challenges that come with growth. But there’s an inherent “people” challenge in speed-scaling—how do you expand the walls without destabilizing the core? Can your vision evolve enough to facilitate growth? It’s nothing short of a balancing act for company founders—growth periods mean decisions must be made quickly, and often at a cost. Having the right people and systems in place from the beginning is the best place to start.
On September 26th, we hosted our fourth event in partnership with Mercer: Growing Gains: Scaling your Innovation-Driven Workplace, hosted at DocuSign and featuring panelists from DocuSign, The RealReal, Cloudflare, Venrock, and Lyra Health. Our last event with Mercer explored how enterprise companies nurture talent and attract employees through innovation-driven workplaces—drawing inspiration from successful startups, adopting their agility and flexibility in order to keep employees engaged. At “Growing Gains,” we examined things from the other side: namely, how a startup keeps its soul during hypergrowth.
Mercer’s Industry Tech Lead Sheela Sukumaran started the evening with a brief keynote highlighting Mercer’s research into innovation-driven tech workplaces—in order to both attract and retain tech talent, companies have five dimensions they need to preserve at every level, especially as the company scales. But how can you grow the product while you’re growing the market? “Think of it as a journey project,” Sheela said. “Look at what do the innovative companies do differently. It’s impossible to maintain the same level of connectedness as a company grows—so we looked at what large companies with engaged employees do differently.”
Mercer’s investigation into innovative workplaces focused on two things: fast-paced innovation and a highly-engaged workforce. “Companies who meet both criteria are usually growing very fast,” Sheela said, “And tend to be both process-oriented and supportive of new ideas.” They create psychological safety for a fail-fast, try-anything environment—an earmark of a highly-engaged workplace. “Failure should be seen as something that happens in the general course of work,” Sheela said. “If you’re innovative, you have to empower your teams.” Ultimately, successful companies focus on people. They metricize behaviors that supported innovation—collaboration, market responsiveness, and “digital workplaces with data-rich environments.”
This all has impact for startups – Mercer’s research found that many startups are keen on keeping their company culture and cautious about structure—not wanting to stifle or hinder the workflow. The panel took the stage to explore the types of change startups can expect at scale. Their conversation follows below. Some comments have been edited for clarity and/or brevity. View live tweets from the event here.
- Sheela Sukumaran – Partner, Technology Industry Leader @ Mercer
- Joan Burke—Chief People Officer @ DocuSign
- Steve Goldberg—Operating Partner @ Venrock
- Jenny Gonsalves—VP of Engineering @Lyra Health
- Zaina Orbai—Chief People Officer @ The RealReal
- Nitin Rao—Head of Global Infrastructure @ CloudFlare
What are the vectors of complexity that affect how you manage people?
Nitin: Geography is a major factor – having team members in other parts of the world. You have to resist the temptation to make decisions with the person next to you out of pure convenience—you need to make sure to include the whole team, even if they’re in a different time zone.
Zaina: As a company grows, communication and cross-cultural partnerships are challenging. Team dynamics change as you evolve, and staying connected as an organization is difficult. Look at your communication tools—do they need to be changed, updated, replaced? At each stage, you have to be intentional about how the organization communicates so you can work together—especially as things change quickly.
Jenny: In the varying stages of things, you’re hiring different personas—phase one is a lot of generalists, people who can take things end-to-end and make decisions across the board. When you transition to phase 2, that’s when you bring in specialists and redundancy of knowledge. That’s also when egos start to clash—scaling is also to support a person carrying a load, but that person might see it as a threat, or might lose something they love to do. Make sure people know that changes are about scale. If there’s any way to keep the tasks under the purview of the person who used to own them, it keeps people happier.
Product is another challenge—the product journey changes as you figure out what your market wants. You have to pivot your strategy, and sometimes the members of your team who bought into the original vision aren’t on board anymore. Don’t start throwing incentives and holding your team hostage if you don’t have to—sometimes it’s time to take team opinions into account, and sometimes it’s better to just let people move on.
Steve: The question is, what are you optimizing on? Having a great place to work is a feel-good thing—but when you go to Wall Street, they’re looking at your profits. How you optimize matters—but if you optimize toward being one of the best places to work for, the money will come. Yes, you’ll lose people along the way—mostly young people, because they’re building their careers. Sometimes you lose people during different phases of optimization because it’s simply not a good match anymore.
Sheela: Optimization comes down to who succeeds, and who benefits from the value propositions as they change.
Joan: I’m going to make a…general statement here: I believe Silicon Valley mostly has terrible management. We’re great at innovation, but we don’t put enough money into our people managers, and build teams thoughtlessly. At the end of the day, managing people is key. Early stage companies wait until way too late to start focusing on those issues—and by then you’ve already lost all your best people. Great managers will drive the organization and growth of a company.
Steve: You should always look at the person you’re going to work for—50% of your happiness in a job will be directly connected to them.
How do you see the relative importance of the 5 dimensions change as a company scales?
Joan: Startups tend to have strong, unique cultures, and they usually don’t want to lose them. But when you grow as an organization, as much as you want to keep things the same, you won’t be able to. Companies should not only own it, but be prepared to do the work from the very beginning. Rather than trying to recreate the early-stage company over and over, embrace change and work for the company you have now. DocuSign runs on three ideas: Trust, Love, and Responsibility. When we went public, our whole slogan was “we love u back.” The company is different than it was five years ago, but we’re still articulating a culture that works for our employees.
Sheela: Some companies tie their identity to a certain culture—if you’re not this, who are you?
Steve: It’s no surprise to anyone, especially in Silicon Valley—the biggest determinant of culture is the personality of the leader. Think Steve Jobs. I used to work for HP (I shouldn’t admit this, but I used to work there when “H” and “P” were actually there!). They had a thing where you could spend 10 minutes a day on whatever you want, using HP’s equipment. That idea came from the top. At Venrock, the #1 factor of whether we write a check or not is whether we can trust the CEO and still sleep at night.
Jenny: Customer and user focus needs to be ingrained from Phase 1. Don’t forget who your users are. If you ever need to unify your company vision and re-connect your employees, remind them who they’re building for. Customers evolve, and the product should evolve around that.
Zaina: Leadership behaviors drive success. Building role models throughout the organization is challenging, as well as trying to connect all those pieces throughout the process. Implementing culture early on is also about creating the kinds of leaders you want.
Nitin: In Silicon Valley, every company is building a narrative that they’re out saving the world. You don’t necessarily have to do things on that scale, but you have to come to work and believe you’re building something bigger than yourself, and feeling like your role matters. At CloudFlare, there’s a deep sense of ownership—this idea that we can’t let the internet down! You don’t hire a smart engineer and just tell them to run your software—you hire a smart engineer and tell them to protect the internet. Create a story for your company and your product that everyone can believe in.
When you’re growing fast, there are tradeoffs to be made. What are the right tradeoffs? What are tradeoffs to avoid?
Nitin: Think about something like tenure—it’s important, but it may not be important all the way through. Keeping a particular person isn’t usually going to impact whether you have money in the bank or not. It’s tempting to make the wrong tradeoff, to keep employees because of their knowledge, or because you have a near-term project. If it’s time for someone to move on, it’s time.
Zaina: I think it’s about the balance of structure vs flexibility—where do you add structure so it reduces friction, but not so much that it slows you down? Make sure there’s a healthy tension between process and policy. Don’t wait too long to implement structure, but don’t add it until it’s necessary.
Jenny: Scaling—like when you suddenly have to double your team. You want the founding team to be super-solid—but let’s say you have to hire 60 new engineers, and you’re in a rush, and you want to lower the competency bar. That’s the beginning of the end, in many ways—early compromises set a precedent for later ones.
Steve: When you’re on a project, and you’re going the wrong way, should you say something or just gut it out? If your business isn’t going the right way, should you say something to the board? It’s a human condition—we’re conflict-averse. We learn to deal with it, but it’s not our favorite thing. But I think it’s in one’s best interest to correct things as soon as possible—90% of the time, once you see a problem it’s already been there a while, and it’s time to act and make decisions.
Zaina: They say hire slow and fire fast—most companies do the opposite.
Steve: Exactly. There’s no piece of the pie if there’s no pie.
Joan: I believe in the responsibility of the board of directors. I have seen founders who are brilliant and wonderful—but when it’s time for them to go, the board does nothing. We have a system in place in Silicon Valley that takes no action on toxic CEOs—a VC said to me ‘Joan, you will never make a deal again if you fire the founder.’
Steve: That’s because early-stage companies who lose their founder early generally don’t make it. Boards will do everything to keep founders in place—to keep the magic in place. It’s hard to push someone out if the finances are good. You can actually do a lot of harm. But it does usually take too long to get them out when it’s no longer working.
What’s the constant that holds up through the journey?
Jenny: Wherever you are in your journey, at the end of the day we’re talking about people, and driving intrinsic motivation. Give people a purpose and set that framework at every phase. It also comes down to autonomy—give people control of their own domain. As leaders, don’t be overly prescriptive. Good leaders should really know the people on their team, and know their talents, and manage toward that.
Sheela: In Mercer’s research, the number-one driving force was job impact—compensation was number 4.
Zaina: Empower your people—give them guard rails AND autonomy.
Steve: I think it’s customers. Companies who know their customers best and know their customers’ needs best and optimize for that—the product’s right and the revenue’s coming in—focus on that. You don’t have to have the best product or the best technology.
Nitin: Even as the culture evolves, there are certain things that should endure. I would hope that new decisions wouldn’t be surprising—you can’t just show up at work on a Thursday and suddenly decide ‘we’re going to be frugal now!’ Build it into phase 1 so it’s not a surprise for your team later on. People look for consistency.
Joan: It’s a great opportunity for companies—I think it’s important to archive the stories, make sure you can tell a complete history of the company. Take pride in your company lore.
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Silicon Valley Forum