Multi-Office Scaleups: Where to Hire What Function?


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

  1. On the left, list your scaleup’s ten most important departments or functions.
  2. 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.
  3. 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.
  4. Finally, write down the projected headcount numbers in the people column on the left. 
  5. 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!

Quarterly Rock Ready? Set and Go with This Execution Plan

Starting to Move a Quarterly Rock

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.

Download Slide Template | Quarterly Rock Execution Plan

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

  1. 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!

  2. 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.

  3. 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.

  4. 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

  1. 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.

  2. 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

  1. 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.

  2. 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:

Download Slide Template | Quarterly Rock Execution Plan

Hire More A-Players for your ScaleUp (with free toolkit)

How Can You Hire Only A-Players

How can you hire only A-players? What if you knew there was a tool that could help you zero in on them whenever you recruit someone new? Look no further. Our “Preparing to Hire an A-player incorporates the teachings of Brad Smart (“Topgrading”) and especially his son Geoff Smart (“Who”) so that you can apply best practices right away. Download it here to make hiring A-players a reality.

A-players live your core values

The core values are an image of the personality of your organization. A strong personality is essential to your success because it reinforces how you work together. When hiring new talent, you want to ensure they integrate with the company culture. A-players quickly integrate with the business culture and live all its core values. 

Free two-page tool: “Preparing to Hire an A-Player”

How can you hire only A-players? What if you knew there was a tool that could help you zero in on them whenever you recruit someone new? Look no further. Our “Preparing to Hire an A-player incorporates the teachings of Brad Smart (“Topgrading”) and especially his son Geoff Smart (“Who”) so that you can apply best practices right away. Download it here to make hiring A-players a reality.
Cashflow Acceleration: Improving the Four Success Formulas

Cashflow Acceleration: Improving the Four Success Formulas

Improving your Success Formulas (free worksheet)

Does your company seem to get less efficient as it grows? Are you constantly playing arbiter between the heads of your different functions? Then it may be time to identify key cross-functional processes and improve your four success formulas. Our free “Cash Acceleration” worksheet will enable you to reap the cash hidden in inefficiencies, while avoiding big-bureaucracy process redesign.

From filling functional gaps…

An entrepreneur in the middle of scaling up your business, it is sometimes difficult to see the forest for the trees. In most cases, businesses are started by people who have a particular expertise or knowledge base that opens a market for their business idea. It is also true that these entrepreneurs have gaps in their knowledge of starting and running a business. These gaps may pertain to administering the business, finance, human resources, engineering, or any number of areas that require particular expertise.

…to establishing cross-functional flow

It is natural to seek to fill these gaps by hiring experts to fill roles in the company and manage various aspects of the business. Over time and as the company grows, organizations will develop functional silos under these subject matter experts. As you scale up, you must be aware of these silos and be ready to consider how these individual functions in your company must come together to serve your customer. Otherwise, you may lose sight of the holistic, end-to-end process in your company and unintentionally complicate your customers’ interaction with your company.

Determining your key success processes

If this silo effect is affecting your operations, you will need to improve your day-to-day operations in terms of cost, quality, and flow by integrating functional areas to work smoothly together. The key to reorienting toward this more holistic approach is to introduce more process-based thinking. One way to do this is to have an executing brainstorming session to delineate and agree on key success processes for your business. This will help you to generate a common understanding of these key processes and assign accountability for implementation and improvement.

Best Practice Success Formulas for Tech Scaleups

● Product Development Cycle: Innovation Machine
● Marketing and Sales Cycle: Customer Attraction Machine
● Customer Success Cycle: Value Delivery Machine
● Billing and Optimization Cycle: Profit Protection Machine

How to get started

To start improving your success formulas, in your next executive offsite, first determine which 3-5 cross-functional processes are absolutely key for long-term competitiveness (or take the four we propose if they seem to reflect your busienss model. Then agree on what to define as the input and the output of each process. Finally, assign one executive each as a cross-functional owner of each of the success formulas, accountable for ever decreasing cycle time, cost and error rates.

How to ensure continuous improvement

In a next quarterly offsite, dig deeper to quantify the success formulas with tools such as our Cash Acceleration/Improving Your Success Formulas worksheet. These types of tools provide a scorecard to benchmark your current status and measure improvements on a quarterly basis as you continue to scale up. All with the goal of integrating your operations to enhance your customer’s experience with your company.  

The More You Focus, The Better You Scale–Zentrick’s Pieter Mees

The More You Focus, The Better You Scale–Zentrick’s Pieter Mees

Fewer Markets, Bigger Profits

Video interactivity provider Zentrick

The story of Zentrick illustrates the impact that focusing on the core can have.

Zentrick is a New York-based scaleup with roots in Belgium. They sell a video interactivity layer to advertising technology platforms (DSPs and SSPs). The product provides market-standard video measurability and interactivity without  in-house development.

CTO Pieter Mees told me about the turnaround Zentrick has accomplished in the last two years.

Hedging Bets on Several Market Segments

“As a startup four years ago, we were eager to find traction for our video interactivity solution. So we tried as many market segments as possible. From platforms to brands and from agencies to measurability providers.

Technology Scales, Go-to-Market Does Not.

“We are all engineers and computer scientists. In class we learn that the bigger you scale your technology, the more efficient you become. But they forget to tell you in engineering school that the go-to-market doesn’t scale.

“We were trying to build market positions in three different segments at the same time. Without a chance of reaching a dominant position in any single one of them.

Disrupters Focus on Market Power

“Any startup, angel and VC wants to see more growth than profit in the short term. But it is also crucial to keep your eye on building  market power over time. So that you reach your aim of real market disruption. And can at least project outsized profits at a future horizon.

“Comparing our different customers’ needs, pain points and willingness-to-pay was eye-opening. It became obvious that advertising technology platforms should be our first core customer.

Making up for Lost Revenue

“Foregoing revenue potential in the other segments was hard. But  we stuck to focusing our go-to-market completely on these technology platforms.

“And you know what happened? We were able to focus our product value more on this core customer.  This made the product more attractive to them. So our pricing power increased.

“Within a year, we almost made it back to our previous sales number. But now from only one segment where we were finding increasing market power.

Key to Reaching Profitability

“Even more surprising, we made those sales with only half the people we used to have. This turned Zentrick profitable even while we are still on our A round funding. We are well on track now to reach product-market-domination.

More Attractive to Investors

“We are still a growth company and of course we want to grow much further. But now we have the luxury to attract funding at a much higher valuation.

“Or we can decide to forego funding altogether for now. And increase our market power in an organic way.

Stop Pivoting After Product-Market-Fit

“We learned from this episode that product-market-fit in one segment is all you need. After you find it, your focus has to move to product-market-domination.

“Stop pivoting or trying to find product-market-fit in other segments. Or attacking all these attractive revenue opportunities at once. All you will do is dilute your efforts. You build up lots of extra cost without a corresponding increase in revenue.

Strong Core as Base for Further Growth

“I do see Zentrick grow beyond just advertising technology platforms of course. But now we can do that from a position of strength. And that is so much better then trying to conquer three markets from a position of nothing.”