How growing organizations should go about adding systems and processes.

One way to think about an organization is in terms of both how good it is at doing what it does, that is its effectiveness, and how mature are its systems and processes for doing what it does.  Figure-1 shows a way to map organizations into a framework that uses both dimensions.

Effectiveness vs. Maturity
Figure-1: Effectiveness vs. Maturity

As shown in Figure-2 organizations in the upper-right quadrant are good at what they do and are highly developed in terms of their systems and process maturity.  Organizations such as Apple, Accenture, and IBM come to mind as known both for being very good at what they do and for having well-developed systems and processes that guide how they work.

Example Organizations
Figure-2: Example Organizations

In the lower right are organizations that have mature systems and processes but that are not known for being particularly good at what they do.  Some government agencies, utilities, and highly bureaucratic organizations come to mind.

The lower-left-quadrant is where most people put the dotcoms (or “dotbombs”) of the late ‘90s.  To work in lower-left-quadrant organizations might feel like being in a squirrel cage where there is always a lot of activity but there may not be much getting accomplished.

Many early-stage organizations see themselves in the upper-left quadrant believing they are very good at what they do and proud to have little-to-no systems and processes that constrain them in any way.  Everything that needs to happen just happens and everyone pitches in to get things done.  The freedom from bureaucracy is exhilarating; especially for those who have previously worked in places that had a lot of rules and systems whether they were good at what they did or not.

Organizations that enjoy being in the upper-left quadrant sometimes find that, as they grow in terms of size (also called: scale) and/or complexity, effectiveness degrades as shown in Figure-3.  Key players get overloaded with too many important things to do and it is no longer possible to keep everyone abreast of everything.  Mistakes and suboptimal decisions are more common and it takes longer to get things done.

Effectiveness can Drop in the Face of Growth with no new Systems and Processes
Figure-3: Effectiveness can Drop in the Face of Growth with no new Systems and Processes

Leaders in an upper-left organization whose effectiveness has started to slip may realize they need to implement systems and processes and so bring in an executive from an upper-right to bring order-to-chaos and to prepare for even more growth. While it may seem to be a reasonable strategy to bring in an experienced executive from an upper-right organization those doing so should be aware that it seldom goes well.  The reason is that those from righ-side organizations are so used to having resources, systems, and processes that they will be totally ineffective working in an organization that does not have them.

They are so used to having troops to deploy to get things done, for example, that when they want to get things done when in the upper-left, they fail to recognize that there are no troops.  That is, they themselves are now the troops; an uncomfortable position to be in to say the least.

Even worse, as suggested by Figure-4, their instinct may be to recreate the order and maturity left behind whether it makes sense to do so or not.  The scenario leads to drowning the up-and-coming organization in unnecessary bureaucracy given its stage of evolution.   Because of this, many say that IBM executives do well in their second job after leaving because it takes one to learn that not everywhere works like IBM and not everywhere needs to work like IBM to be successful.

Bringing in Seasoned Executives can Bury Emerging Organizations
Figure-4: Bringing in Seasoned Executives can Bury Emerging Organizations

A preferred strategy is to add only those systems and processes required to maintain or even to improve effectiveness as suggested in Figure-5.  As increases in growth and complexity require, the cycle repeats and the organization gradually migrates to the upper right.  The evolution takes a long time but it works more smoothly and makes more sense.  The process is much like a tennis or golf professional who works with emerging athletes on the one aspect of their game to provide the most lift next instead of trying to fix everything all at the same time.

Add just enough systems and processes to maintain or improve effectiveness.
Figure-5: Add just enough systems and processes to maintain or improve effectiveness.

Organizations that grow in terms of scale and complexity should expect to have to add systems and processes to get leverage, maintain order, and to lay the foundation for even more growth as they maintain and even improve their effectiveness (as summarized in Figure-6).  It is also a good idea to add experienced executives to their top team but also wise to be sure those they do add have proven that they can operate effectively in an early-stage venture and that they are able to discern that which makes the most sense to do next as opposed to racing too fast to the upper-right.

Summary of how to Manage Effectiveness vs. Maturity in the Face of Growth
Figure-6: Summary of how to Manage Effectiveness vs. Maturity in the Face of Growth

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