The 7 Habits of High-Momentum Silicon Valley Startups
We are marking the start of May with a new toolkit for mid-stage tech startup leaders. “The 7 Habits of High Momentum Silicon Valley Startups”.
The toolkit is available for free from the Scale-up Ally website. It should be of interest if you are trying to move your mid-stage startup to higher momentum.
Inspired by the 7 Habits of Highly Effective People
As a young manager in the 1990s, I felt much inspired by The 7 Habits of Highly Effective People(by Stephen Covey). Now I work with mid-stage startups. I keep seeing seven factors that explain the gap between low-momentum and high-momentum. Thus the play on Stephen Covey’s title. The habits are:
- Critical Self-Diagnosis
- Crystal-Clear Accountability
- Consistent Care for A-Players
- Cross-Functional Priorities
- Commitment to Real Choices
- Concentrated Communication
- Coached Team Workshops
Seven one-page tools for startup founders
The toolkit contains a one-page tool to help solve and internalize each of these habits. The tools are a selection of Gazelles International and Scale-up Ally tools:
- Rockefeller Habits™ Checklist
- Functional Accountability Chart
- Current Talent Assessment
- Cash Acceleration Strategies
- One-Page Strategic Plan™
- Strategy Vision Summary™
- Sample Quarterly Agenda
Toolkit bonus content from Gazelles International
I have also added some Gazelles International bonus content
- a sample One Page Strategic Plan for a software company
- a chapter on how to organize a quarterly workshop
You can download the toolkit for free
With the toolkit, you will also get a set of seven daily emails that explain how to use each tool in more detail. And of course you can reply to each of these emails with specific questions. We answer every email in person.
Scale up like you mean it
On September 18th, I am co-hosting the Scaling Up Your Business Workshop in San Francisco with Bill Gallagher.
Comprehensive introduction to Scaling Up
The workshop will provide a deep-dive introduction to the Scaling Up methodology. Exercises will include a.o.:
- Rockefeller Habits assessment
- Functional Accountability
- Cashflow optimization
- Core values
- Purpose & Promises
- Quarterly/Annual Priorities
- Meeting Rhythms
Every participant will also receive a free copy of the Scaling Up book by Verne Harnish, for themselves or to share with a team member.
Looking forward to seeing you there!
We will add the registration button to this page as soon as it’s available.
1. Understand how strategy changes from startup to scale-up
Strategy should be a primary differentiating factor between a startup and a scale-up. In a startup we hardly distinguish strategy as separate from other activities. But in a scale-up, the strategy should be the key driver for growth.
Startup strategy is iterating on the founder vision until the team finds product-market-fit. Scale-up strategy is preparing for competitive battle. Being ready to win in the chosen arenas of war.
||Core competences, core purpose, core customer, brand promise, BHAG
||Can pivot any time
|Link with execution
||Input to quarterly priority-setting
||Brain of the founder
||“Strategic Thinking Council”
|Source of truth
||Founder thoughts and feedback
2. Separate strategic thinking from execution planning
When a venture moves from the startup phase to the scale-up phase, it is vital to give strategy its own place:
- Document the source of truth into a One-Page-Strategic-Plan
- Separate strategic thinking activities from execution planning activities
- Commit to the strategy for at least one quarter at a time, so that you can set stable execution priorities.
- Start debating strategy with the founder in a “Strategic Thinking Council”
3. Set up a separate Strategy Council
Jim Collins (Good to Great) recommends setting up a “Council” for strategic thinking. This has to be a separate team from the executive team, with a separate meeting. Though some executives should be members of both.
The Executive team contains the 7–9 top leaders of major functions and business units. They represent all major cross-functional resources that must deliver on quarterly priorities. The Executive team has collective decision authority.
The Strategic Thinking Council contains 4–6 executives. They are comfortable debating long-term strategic choices. The Strategic Thinking Council has no direct decision authority. It advises the CEO and the Executive Team. They share both the consensus positions they reach and major differences of perspective.
4. Reflect strategic urgency in the right meeting rhythm
The Strategic Thinking Council should meet more often if it is urgent to update the strategy.
I detect this urgency for clients with the Gazelles double strategy question:
“Can you state your firm’s strategy in simple terms? And is it leading to sustainable growth?”
If the team scores less than 6/10 on sustainable growth, I recommend to start weekly or biweekly meetings. Companies already enjoying sustainable growth can get by with a monthly rhythm.
5. Limit the agenda for each meeting to one pre-defined question
I recommend my clients focus every meeting on one deep dive. Beginning Councils should start with one question of Jim Collins’ hedgehog concept:
- What are you passionate about (Core Purpose)
- What can you be the best in the world at (Brand Promise)
- What drives your economic engine (Profit per X)
Every meeting should show much progress on the discussion on one of these. For a next meeting, the Council can then choose to deepen the same answer even further or to tackle one of the two other questions.
Scale-up Ally clients can download a convenient bundle of the three relevant one-page tools here:
6. Be patient, a breakthrough is imminent
This cycle may go on for weeks, months or even more than a year. As Collins states, teams are done “when they just know it”. This is the moment when all three answers intersect. When the team feels with 100% certainty that this central position is the “sweet spot” for the organization’s strategy.
If the team hasn’t quite reached that point yet, it is important to remember that the open discussion is of value itself. Often, it will be in the course of “normal” work outside of the Council that the ultimate answer becomes clear.
I recently got hired as the second in command at a well-known scale-up. I have twelve people working under me. The founder/CEO wants me to show that I can make my whole team work together better. I’ve heard about daily huddles—could be the way to go for us? Do you have any tips on how to make the most of them?
First of all, congrats on your new position! Coming in as a new leader is the best time for both you and your team to try out new ways of working. Your key priority is to improve cooperation. Do you feel the twelve people in your team trust each other enough for that?
Meetings are awesome in potential—but so often terrible in reality. Meetings without anyone knowing why they are there or what outcome you expect, are a huuuge waist of time.
This is why we teach our scale-up clients to set up strict routines for meetings. We advocate daily huddles, weekly team meetings, monthly deep-dives and quarterly offsites. Each of these comes with their own purpose, timing, recommended agenda and output. When everyone knows what each type of meeting is for and how they can contribute, meetings run much smoother.
Especially if you need to build some mutual trust, your intuition is 100% correct. Daily huddles are an excellent practice to get everyone on the same page. Meeting every day clears up your email, your chat channels and especially all the 1-1s you hold. With only 15 minutes a day, everyone stays connected, invested and informed.
To make daily huddles most effective, hold them at the exact same time each day. Make sure they last max. 15 minutes and stay on point. Ask everyone:
- What’s on their mind (not only work-wise)
- Where they are stuck and/or could use help
- What is the one thing they want to doefore the next huddle.
Plan individual talk time to fit into roughly 12 minutes (leaving 25% slack). See the equation. E.g. with seven participants, each person gets roughly 35 seconds to answer each question. Assign someone else than the leader to time people and cut speakers off. This will boost the energy level and the flow.
For those meeting face to face, try standing up. That will give you a more energetic meeting and it is easier for everyone to keep it shorter. For those working remotely, the added overhead of a video conference is not necessary. I recommend an audio-only conference line such as Uberconference, which can also dial out to everyone at the exact time the huddle starts. Very useful!
Finally, have your team commit to daily huddles for at least three months. During that time, steer emails, chats and 1-1 requests back to the daily huddle. Daily huddles are a habit that needs to form, like muscle memory. Do not give people’s initial skepticism an opportunity to derail daily huddles prematurely!
Lately, networking has become my biggest challenge. I am overwhelmed and soaked up from the pressures of keeping my business scaling up. In the past I have met many amazing clients and partners but I can’t seem to maintain contact with them. I work with an amazing team; they do their best and work their heads off. But they still need me daily to reach our targets. How do I find the time to expand my network and business?
Under Pressure Berkeley, CA_
Dear Under Pressure,
You are not alone in feeling pulled in all directions. First, great that you realize the importance of business development for your company. I see too many founders trying to stop growth while fixing internal problems. That is rarely a course of action I would recommend.
When you feel pulled in all directions
Second, I would think of this as a delegation choice. To keep it simple: a choice between business development and operations. What do you want to delegate first? You could hire a head of sales/CRO or a head of operations/COO. Either would ease your burden and let the company be better at both functions.
Third, over time, as a scale-up leader you delegate every function of the business to someone else. How good have you been at that so far? You say your amazing team still needs you daily. Have you delegated in the form of
- assignments–individual tasks that need your constant supervision and approval?
- areas of responsibility–overarching functional metrics that remain open in the what and how?
The Functional Accountability Chart is a great Gazelles tool. It can help you and your team assign true areas of accountability. I use it in all my client workshops, before we even start on the One-Page Strategic Plan. In your next workshop, reserve 1-2 hours to complete this exercise:
- It lists actual business accountabilities typical for every Scale-Up. This helps to see beyond arbitrary titles that people on your team may have acquired.
- Have every individual fill out the responsibilities as they see them. Most teams show much inconsistency, explaining the constant back-and-forth in day-to-day problem-solving.
- Discuss to reach consensus on which name should be in which box. Avoid the same person in several boxes–and identify the names that did not make the list.
- Once you have consensus on the who/what, move to the how. I like to start with a lagging metric for each function. Ideally one from the P&L statement or the balance sheet. Let people fill out their individual opinions again before you discuss in group.
Finally, is it better to let go of business development or operations first? My trick answer is: try both at the same time. With your new accountability chart in hand, find a delegate for every aspect that is not “head of company”. Assign to someone below the management team if you don’t have the right person within. Delegate a large enough area of accountability to them, and see what they have in them. You may surprise yourself and the team and save a costly external hire.
Relieve the Pressure!
I run a startup of ~50 people. Using Lean Startup, we hit on a great product when we were eight. Now we’re on track to make $10M in revenue in less than two years! My problem is that the people I hire tell me it’s time to grow up and adopt traditional enterprise ways. But I didn’t found a startup to turn it into a boring corporation. Why can’t I stick with the recipes that have made this startup so successful?
Pivoter Santa Clara, CA
The answer is that your company is neither a startup nor a boring corporation. It’s in its own category: a scale-up. Scale-up companies are a different breed from both startups and established enterprises. The needs of a scale-up, too, are different from those of a startup or an enterprise. You realize that you cannot run a startup like an established enterprise. But your company is not a startup anymore. And you also cannot keep running a scale-up like a startup.
Between product-market fit and product-market dominance
A startup stops being a startup when it has found product-market fit. An established enterprise only becomes established with product-market dominance. So a scale-up is the organization that turns product-market fit into product-market dominance. Once the startup reaches product-market fit, it becomes a scale-up. Once the scale-up reaches product-market dominance, it becomes an established enterprise.
Not just a compromise or a transition
The transition from startup to enterprise has merited little attention. I think the scale-up phase is more than a mere transition.
A scale-up solves specific challenges that neither a startup nor an established enterprise faces. Its sole mission is product-market dominance: capturing the market before the competition does.
Scaling is more than turning a startup into an enterprise. It is about focusing all resources on product-market dominance. Not on finding new product-market fit, as a startup would do. Nor on minimizing risk, as an established enterprise would do.
Companies that fail to recognize this scale-up phase are in for hard internal fights. Startup people and enterprise people will have opposed views on what is right. And neither ensures resources focus on your company’s real external market challenge.
Are you managing the venture like a scale-up?
First, in your own scale-up, how many of your habits remain from the startup phase? How many are inappropriate for successful scaling? Are you…
- still pivoting or doubling down?
- still serving Kool Aid or injecting truth serum?
- still optimizing future projections or current cashflows?
- still taking most decisions or relying on your team to do that?
Second, which enterprise habits have crept into your culture? Even if they are not appropriate yet for the scaling phase? Are you…
- hedging between business lines or focusing on one?
- adopting safe corporate speak or establishing clarity?
- running corporate budgeting cycles or debating simple numbers?
- sliding into mediocrity or weeding out C-players?
As these examples show, scaling up with success requires different behaviors. Habits that are both different from the startup phase and from the enterprise phase. Recognize when startup habits are no longer applicable. And adopt the true scale-up habits that will continue your success.