The Secret to Building a Startup That Stays Nimble
"Do you want to help start a record label?"
The question caught me by surprise. I was working as an IT manager at a large consumer electronics company in Minneapolis at the time. My days were spent looking over budget reports (ho-hum), scanning over project management summaries (blah) and either preparing for or writing performance evaluations (dull as paint). In short, I was really bored.
"Sure," I told my boss at the time.
Anyone who knows me will find out quickly that I own a Taylor acoustic guitar and a Fender Telecaster. I have (almost) every song by the band Manchester Orchestra memorized. Joining an impromptu team to start a record label? I'm there.
So, in between Excel spreadsheets and time-card approval requests, I drew out designs for a logo, had meetings with up-and-coming rock artists, and even went to my first after-party. Sadly, the project fizzled out within a few years. I had to get back to those budget reports, and the internal funding dried up. The main issue, I've since realized, is that upper management didn't really commit to the project and failed to spur any momentum.
Flash forward about 15 years, and there's finally a business approach that could have provided the necessary framework for that project. In his new book called "Accelerate," well-known Harvard Business School professor and consultant Dr. John P. Kotter writes about a dual "operating system" where one side of management handles all of the necessary performance evaluations, budget approvals, and the technical operations for the company. Meanwhile, another (equally legitimate) side of the organization promotes innovation and open ideas. The concept is a perfect fit for startups that want to build for the future.
"Every organization goes through a lifecycle where they eventually lose their initial speed or agility at a strategic level," says Kotter. "The problem for new companies is that they get pulled... [away from] the early way of operating that helped them deliver on their original idea of innovation. Eventually that kills off their entrepreneurial spirit that made them such a success," he says.
Kotter explained that most entrepreneurs are scared, at some gut level, about what to do when success happens. They know it takes a large machine to put the product into the hands of a worldwide audience and end up systematically killing innovation.
The solution is to knowingly create the dual operating system he describes in his book, and to do it early enough that it is part of your normal business approach.
How to Do It
Of course, the big question is: How do you do that?
Back when I was in that volunteer role starting a record label, I remember walking into the office of one of the other managers, someone who had a day job in customer service. He had guitars hanging on every wall and he was just as motivated to get the project rolling. We never butted heads, but we also never really made any progress.
Kotter told me we should have established a set structure and processes--without getting bogged down in management hierarchy--that coincided with our volunteer roles, even if there wasn't a main boss. For the record label, employees at every level could have worked together, contributed ideas to the project plan, and owned a piece of it that related to their personal interests. Kotter says the idea is not to have a temporary "gorilla group" that swoops in to pump up momentum; it has to be more organic. Those who become part of the project would do so out of their own conviction and would gravitate toward the roles for which they're best suited. Contrast this with a more top-down approach, where somone at the top decides on the idea to pursue and the people to pursue it, essentially single-handedly taking on the task of providing momentum for the project. It's an approach that's destined to fail.
When you start out with Kotter's dual approach, the second operating system of management is already there to spur innovation. You don't have a traditional hierarchy where those who are in charge are at risk of steering a ship that's going nowhere. It doesn't have to evolve, and it doesn't need to be retrofitted like it does with many existing larger companies today. It's already set for the explosive growth.
In the end, the internal project did become a side company for a while and had some measure of success. The main corporation kept throwing money at the problem, but there wasn't enough personal motivation from those involved. I got back to my budget and time-card approvals. Still, I often wonder what would have happened if the dual-management approach had been around. Maybe I'd be signing the next Coldplay right now.