Scaling Up Excellence

March 7, 2014

scalingupIn Scaling Up Excellence, Stanford faculty Robert Sutton and Hayagreeva “Huggy” Rao discuss a challenge that determines every organization’s success: scaling up farther, faster, and more effectively.  Leaders who are successful at scaling their companies think of it as spreading a mindset, not a footprint.

Here are two quotes – one each from the co-authors – which we found interesting, followed by a brief video summary of their book.

Sutton: There’s always this challenge, as you get bigger, about structure. If people are telling the same story, you can have less bureaucracy, less micromanagement. But you do need some authority. And people like Twitter’s Chris Fry and Steve Greene, who grew Salesforce from 40 to 600 people, and venture capitalist Ben Horowitz — all of them make this argument that you should have a little less structure than you think you need. Then, wait for things to break a little bit as a sign that you should add just a little bit more. Greene called this light structure “running a little bit hot.” If you’re a little bit too heavy, it feels like you’re walking in muck. And, if you’re way too light, things fall apart. So, the ideal condition for scaling is that little things should be breaking all the time, but not the big things.

Rao: The other thing I want to add is when you become larger, what’s unsaid also increases in an organization. The phrase we like to use is: “Smart people inside large organizations become dumb.” They become mute. And so the real problem for a large company is to figure out what’s not being said. Because if you only make decisions on the basis of what’s being said, you can go off track pretty quickly…  One good way to develop a plan is to do a pre-mortem: Take a team of people, and get half of them to imagine the plan has been put in motion and failed terribly. Then write a story of why that happened. And get the other half to imagine that it succeeded, and write a story of how that happened. The advantage of this is you get more of the unsaid said…

I think about the U.S. army general in the Korean War that we talk about in the book, Matthew Ridgway. He says, “The hard decisions are not the ones you make in the heat of battle.” A lot of people can do that. The hard part is actually sitting in a meeting and speaking your mind about a bad idea that’s going to put thousands of lives in jeopardy — and convincing the decision makers that it’s a stupid idea. The kinds of people who are going to do that are people who put the interests of others above their own.

Can scaling be learned? 0:29
What is the first step a leader should take when scaling up excellence? 1:12
How do you define excellence? 1:57
What’s the best mindset for successful scaling? 2:29
Why is standardization important when expanding into new markets? 3:26
What’s your most important advice for managers? 4:13
What’s the most common mistake organizations make? 5:25

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