The lethal transformation of promising start-ups into successful organisations

by Didier Marlier on Saturday March 12th, 2022

I have the privilege to work both for start-ups and established corporations.

The first ones are, usually, very proud of their informal, relational, explorational, intelligence-driven cultures and by the fact that their people are real passionate “warriors” who do not count their hours. They sound far more like “organic communities” than stiff and crippled organisations. Their dream is to succeed, grow and, unadmittedly, become… a large organisation.

The large organisations exhale a legitimate pride for their past achievements, live under the quarterly dictatorship of their financial results and long, with melancholy, the days when they were agile, informal, rapid in decision-making and lived values they believed in. Most of them talk about becoming agile, entrepreneurial, innovative, purpose-driven, with an engaged workforce… What an irony!

In its early days, the Swedish/Swiss giant, ABB, led by Percy Barnevik, tried to mitigate this by creating a new SBU for each business growing beyond the mark of 300 people. The reason for that was that beyond 300, the risk was high to become transactional, stiff, riddled by procedures and start to lose track of each other.

I can’t forget this gala dinner, when emerged the news that the company who I was invited by, finally had taken their main competitor over, to become the World’s number 1. Champaign started to flow, songs filled the air and a very understandable sense of communicative joy was palpable. Discretely, though, one of the Executive Board members, seemed impermeable to the celebration taking place. Fearing something had gone wrong in another dimension of his life, I asked him why he looked so out of place. “At the very same moment we celebrate, Didier, some admin nerds, moved by a powerful fear of losing the number 1 spot are designing illusory rules that should maintain us, via procedures, to the top. And that will be the beginning of our end!” 6 months later, he had left the ship and a few years after, the company was acquired…

A few days ago, I had the privilege to interview a promising future executive who, at the surprise of everyone, had decided to leave one of my most admired client (a successful unicorn, on its way to become a large and successful institution) to go back and enjoy life in a start-up. I wanted to understand why, someone who was getting prepared “to make it to the top”, all of the sudden, decided to pull-out and go back to square 1. “This place has changed! Previously I could speak, challenge, provoke anyone. My questions or suggestions were rapidly answered. Nowadays, internal communication has to follow a procedure. I need to follow the hierarchical route if I want to question, challenge or contribute. I have become a specialist in a public administration. This is not what I signed for!” is a summary of what I understood.

In 2018, before the Covid crisis, the Harvard Business Review published a text from Tony Schwartz, titled “Create a Growth Culture, Not a Performance-Obsessed One!

Schwartz explains that a Growth Culture has four characteristics:

  1. An environment that feels safe, fuelled first by top leaders willing to role model vulnerability and take personal responsibility for their shortcomings and missteps.
  2. A focus on continuous learning through inquiry, curiosity and transparency, in place of judgment, certainty and self-protection.
  3. Time-limited, manageable experiments with new behaviours in order to test our unconscious assumption that changing the status quo is dangerous and likely to have negative consequences.
  4. Continuous feedback — up, down and across the organization – grounded in a shared commitment to helping each other grow and get better.

This resembles a lot the culture of Psychological Safety, exploration (leading when I don’t know), new leadership styles (see my recent article) and permanent feedback that we see emerge in disruptive cultures.

So where does that take us? In a recent and excellent blog post, “10 Tips From Psychology Every Change Leader Should Know”, Al Lee-Bourke explains, amongst others, that one of the critical enablers of change is what he calls “The Tragedy of the Commons”: “Individuals tend to act rationally in pursuing personal goals without fully considering that they might be disadvantageous to the system at the collective level. For example, during a heat wave, those people with air conditioners run them at maximum. But that behaviour, in turn, may cause the power grid to overload such that nobody’s air conditioners work. In change management, this means that although organizational goals may be laudable and desirable, not everyone will subscribe to them and change how they work for the common good. Again, we must focus especially on “What’s in it for me?” to help individuals personally to adopt and use the change.” In other terms, change leaders need to provide time and space so that each and every employee be able to understand how their personal Deep Intent matches with the direction their organisation takes.

Does “size matter”? I believe that, when leaders insist too much on performance, it may, consciously or not, happen at the detriment of the values and the culture that created the successful start-up. Of course, a growing size, brings new challenges. But, whatever you do to encompass this new aspect into your reality, never, ever forget the culture, its informality, its humanity and relational sides that made your company what it has become!

Enjoy your Journey from small to big 😉

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