(This post originally appeared on LinkedIn here)
Last week we described the maturation process an organization must go through to achieve market leadership with their Disruptive Innovation. This post covers typical problems we came across over the last years in doing it ourselves and coaching customers.
Pitfall #1 Scale resources pre maturely
Scaling too soon must be avoided because it will create frustration with employees and investors and unnecessarily shortens the financial runway of your company. Stefan Herbert of Disruption Selling posted “Why Scaling Sales in Pre-Chasm Doesn’t Work” a few weeks ago with a detailed analysis with regards to scaling too soon.
Pitfall #2 Not letting go your past
Maturing the organization from Level 1 up to Level 4 or 5 naturally comes with changes to roles & responsibilities of individuals. Leaders need to set the expectations with new hires that market leadership is the goal and the journey requires “cell splits” on a regular basis. A simple example: The first sales person will be covering the whole world. After the company achieved Product Market Fit and has enough traction to consider Go To Market Fit the first sales territory will be cut into regions, then into subregions, then into midmarket and enterprise, then into select vertical markets in the subregions, etc.. Once a cell split is done individuals must not hang on to the previous responsibility or spend any energy or passion on it.
Pitfall #3 Promoting the wrong talent
When one promotes the wrong person the consequences are significant. Not only do you lose a person who was great in the previous role, you also have a person in a job where they do more harm than good. In addition, all of the other employees will spend time and energy on this promotion and won’t focus 100% on their job. It can even lead to great people moving on to work for another company.
Pitfall #4 Creating unnecessary complexity
Complexity can be created by being too tayloristic too soon which will lead to a lack of ownership. The sheer size of a team also adds complexity. Think of Jeff Bezos’ “two pizza teams”. Another popular way to add complexity is having too many, and sometimes even conflicting, goals. A disruptor has to avoid this to stay nimble and customer focused.
Pitfall #5 Assuming culture will take care of itself
Imagine your company has 30 employees when it reaches Level 1. If everything goes well you could double your staff every 12 months…At the end of year 1 you have 60 employees, year 2 120 employees and year 3 you have 240 employees. Out of the 240 employees 210 or 87.5% are with your company 3 years or less. Those 210 come from different professional and personal backgrounds. If you don’t actively take care of your culture your company will end up with an amalgam culture of who you hired.
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