Distributing or centralizing teams
Multi-office scaleups struggle to organize their teams efficiently. Once your scaleup has several offices, how do you organize your teams? Should each function have representatives in each location? Or should certain functions remain centralized in headquarters? And if so, which?
Many scaleups struggle with these decisions as they grow. This is why I have developed a one-page tool to plan resources across different locations. You can download it here if your scaleup is struggling with the same issue.
Multi-office scaleups Rule #1: accept the trade-off
The first thing to understand: centralized and decentralized models are a trade-off.
The more you decentralize resources, the more you optimize for local responsiveness:
- sales and service people who are close to the customer;
- people in international markets who speak the local language;
- customers served only by specialists in their vertical.
Decentralization means you can fulfill customer desires better, but at a higher cost. It values effectiveness over efficiency.
The more you centralize resources, the more you optimize for economies of scale:
- Easy reallocation of development teams to new projects;
- Call center agents covering for each other while on breaks;
- Stronger bargaining power from suppliers.
Centralization means you combine forces, but your customers get a more generic experience. It values efficiency over effectiveness.
The best scaleups thrive because they reconcile this dilemma. They reach both effectiveness and efficiency.
This is why the team allocation to different locations is such a difficult choice to make. You are facing a trade-off, even though you need to serve both sides of that trade-off.
Multi-office scaleups Rule #2: purpose by location
Do you face much tension around who should hire where? If so, have you defined what the purpose of each location is in your scaleup? For example…
- Is your Chicago office a regional headquarters or a sales office?
- Does the sales guy you hired in Singapore constitute a full office location?
- Is each office managing its own profit and loss or would you rather manage those by region?
- Is your headquarters a sales office in its own right or just supporting the frontline offices?
Providing clear purposes before creating the hiring plan will help avoid much tension. It also sets clear expectations how much of a career path people can expect in a certain location.
Multi-office scaleups Rule #3: differentiate by function
What is the key to reconciling efficiency with effectiveness? It is to make different decisions for each function or department.
Some departments should be completely local, others should be completely central. Many end up in-between: skewing local (key locations) or skewing central (critical mass).
Differentiating by function sets up the healthy tension that makes a scaleup successful. Local functions can take tactical decisions in their area without resorting to headquarters. Central functions gain buy-in for strategic decisions by creating momentum among local functions.
The key is to determine which functions to centralize and which to decentralize. This is what our one-page tool can help with.
Multi-office scaleups Rule #4: the success model
Each function has a “success model”: key deliverables and key success factors contributing.For example,
- Sales will bring in new contracts. Key success contributors are good relations, responsive tenacity and flexibility.
- Engineering builds reliable systems. Key success contributors are redundancy in systems, robust testing and a well-managed architecture.
A function’s success factors determine if decentralization or centralization makes most sense. For example,
- Sales’ success factors point to a local bias. It is hard to maintain good relations from a distance, or to be responsive across several time zones.
- But Engineering usually has a central bias. Redundant systems in each location with customers would be cost prohibitive. It is also easier to enforce robust processes when people are generally in the same location.
Using the Multi-Office Plan tool
- On the left, list your scaleup’s ten most important departments or functions.
- Then, think through each of these functions’ deliverables. Circle what their ideal success model is:
- in as many locations as possible. For example: sales of softdrink cans; coffee franchise; automatic teller machines.
- Key locations:
- only in the locations that matter. For example: consulting offices, car dealers, luxury goods, field sales force.
- Critical mass:
- when the function needs several people in one place to do well. For example: specialist support functions, knowledge leads, regional synergies.
- HQ attendance:
- when the function must be near the top decision-makers. For example: corporate development, finance, general counsel.
- Then, list your key office locations in the columns, and outline the purpose of each office:
- Start with headquarters: is its purpose omnifunctional or back-end only?
- Add any regional offices you might have;
- End with locations that have a single remote employee.
- Finally, write down the projected headcount numbers in the people column on the left.
- Then split up these totals among the different offices you have identified.
Best is when each executive does this exercise individually first. Then compare notes as a team.
Keep Growing—Keep Your Culture!
Are you sure you own your sandbox?
Strengthening the competitive positioning for your scale-up company is the key to reaching product-market-dominance. Using our free “sandbox” tool, you can quickly figure out your competitive focus in products, segments, geography and activities.
Are you growing in all directions?
Is your scaleup company seeing incredible growth? You may both be lucky—and set for disaster. Of course, growth is definitely what you want for your scaleup. But when it happens on all fronts, you may stretch yourself too thin. Does your approach feel too generic? More specialized competitors will be pitching to your juiciest customers already.
Defining the sandbox(es) you play in
In my experience, the times when you could grow in any direction are the best times to be clear about your “sandbox(es)” you play in:
- product offering(s)
- customer segment(s)
- geography/ies served
- business activities performed in-house
Our competitive sandboxes tool (free download) helps you and your team define that very sandbox. Both for you and your closest competitors.
Startup founders seek growth in any direction promising product-market-fit. But scaleup leaders seek only growth that gets them closer to product-market-dominance. The #1 goal of a scale-up is to become the undisputed leader of a growing market segment. However narrow the definition of that segment may be.
All about focus on the chosen market
Winning a chosen product-market-segment requires intense focus of resources. Are you nowhere near projectable leadership of your current markets? Then you’re not focusing enough. The solution is to define your market more narrowly. Not broader, in the hope that you may catch a few clients elsewhere.
The fewer sandboxes you have to play in, the more likely you are to dominate one. And once you have one under full control, it becomes much easier to expand into adjacent sandboxes one-by-one. Without risking control of your home base.
Verifying your sandboxes
The competitive sandboxes tool helps you understand the sandboxes you serve. I recommend the executive team use the tool in a quarterly or annual planning session.
- Defining the sandboxes. List products sold, geographies (continents) covered, segments targeted and key activities performed in-house. In case of doubt, count only activities/products/segments/geographies with resources assigned. Do not count opportunistic forays without an owner.
- Now plot the number of products, segments, geographies and activities on the axes of the chart. E.g. if you sell three products, plot a dot on coordinate (0,-3). You should have a dot on each of the four axes. Connect the dots with a line. Mark the squares within the shape with a black (strong) or white (weak) circle.
- Compare with your colleagues. Do you have the same shapes? Are they roughly the same size? Can you agree on a common shape and size?
- As a group, identify your top #3 competitors. Do the same exercise for each competitor. First as individuals, then compare results.
- As a group, discuss which competitor is most and least successful. To what degree is their focus a driving factor of their success?
- How can you increase your own competitiveness? Would you be better off expanding your sandboxes or reducing them? In which direction would you first seek reduction or expansion?
- Write the desired areas of focus for the short, mid, and long-term into the table at the top right.
- Plot your short, mid and long-term sandbox positionings on the bottom right chart.
- As a group, derive the most urgent short-term action points. How can you move from the current state to the future state as fast as possible.
Download the Sandbox tool now
If you have questions about narrowing your target market, contact us today. If you are ready to take the next step, you can download our app, “Competitive Sandboxes”, here.
Effective Ownership of Quarterly Rocks
In their quarterly offsites, the executive team determines up to five quarterly rocks that are key in driving the business forward.
It is a high visibility opportunity to own one of these rocks on behalf of the company. But how do you make sure you deliver on its promise?
Our Quarterly Rock Execution Plan (free download) is your guide to setting and meeting your goals. Determine your priorities, assign project owners, and make sure you finish on time.
A Plan for Any Rock
We’ve designed this tool to help you cover any possible rock the executive team may have set. We have seen it work effectively for rocks as diverse as:
- Launching a major sales initiative;
- Reducing your error rate;
- Creating transparent accountability practices;
- Setting another step towards product-market-dominance
- Enhancing your delivery speed;
- Refining your planning process;
- Lowering costs;
- Developing a lean workflow.
This one-page tool is designed to help you ask the right questions of your sponsor, and then to have your team build the best answers. Just follow this simple step-by-step process.
Basic rock definition
- Give your rock a name, if the name you got from the executive team wasn’t clear enough yet. Issue a unique name that defines your project. It should be clear and speak directly to your goal. But that doesn’t mean you have to be boring – feel free to have fun and get creative!
Appoint a sponsoring executive team member to the Rock. Who will lead the rock’s effort? Who’s in charge of making sure the assignment finishes successfully? You want to empower your team with project ownership. Write the name of your sponsoring executive in Box 2.
Assign team members to the rock. Who will support the efforts of the project? What workforce will your project leader have at his/her disposal? This is the team that will make your goals into accomplishments. Recognize your labor. Appreciate the people that get it done.
Define your overall deliverable. What is the goal of the rock? What are you producing? What product, service, benefit, and/or improvement will result from the project’s completion? To define your overall deliverable, try finishing this sentence: “Sponsor considers this rock done when _.” Delineate your overall deliverable into just a sentence or two. You can elaborate during the next step.
Go one level deeper
Set requirements for the rock’s success. What’s needed to make sure your project is fulfilled? What tasks need to be complete? Here’s where you get into the specifics. Outline any and all requirements related to the rock’s success. Some things you might consider include project budget, resources needed, and the amount of time the rock will take to finish.
Breakdown the overall deliverable into key milestones. How will you know if your rock is succeeding? How can you measure this success? Step 6 is where you breakdown your overall deliverable into specific phases and milestones. This isn’t exactly a schedule – but rather a map to your vision’s completion. Figure out what needs to happen and in what order. Decide who will be in charge of these phases. Set deadlines for the fulfillment of these milestones.
Risk assessments and delegation
Identify risks to the rock’s success. What challenges must be surmounted? What might make your rock fail? Figure out potential hazards you may face in the future. Then, plan in the present. We suggest you ask your sponsor to help your identify potential problems and solutions.
Delegate the next steps. Now that you have your personal, schedule and resources organized, it’s time to hit the ground running. Identify the immediate actions that kick off this momentum. Assign these tasks and decide when they are due. The planning is complete—now the real work starts!
Download the Quarterly Rock Execution Plan now.
Prepare for successful project execution with the Quarterly Rock Execution Plan. Download it here: