Different Rules for Different Teams

Why should we treat everyone the same? Startups are not scaleups! Different teams need different practices, or else you’re left with screwups.

When I was nearly a teenager, my younger brother complained to our mother about the fact that I was allowed to come home anytime I wanted while he had to be back at 6 pm. He said that wasn’t fair. My mother replied to him that, first of all, his older brother was his senior by three years. I was almost a teenager; he was not. Different situations, different rules. And second, he could earn the same freedoms that I had if my mother didn’t have to pick him up from the police station anymore. My little brother was quite an adventurer!

Different situations, different rules.

It is perfectly evident to anyone with a family that different family members have different behaviors and different rules to live by. We don’t expect babies to behave like adults. The rules for toddlers are unlike those for teenagers. We don’t treat our young adults the same as we do our grandparents. And yet, in organizations, we rarely distinguish between lifecycle stages.

Like families emerging from family members, companies consist of business models. Some business models are unvalidated newborns; some are fast-growing young ones; some are mature and profitable. And others are near the end of their lives. With different parts of the company in different lifecycle stages, it makes perfect sense for these business models to be managed in different ways.

With mature business models, it is crucial to care about profitability. Company policies regarding expenses, salaries, workplaces, and office hours are perfectly reasonable for a business that carefully needs to monitor its margins. However, with startup businesses, the immediate danger is making a product nobody wants. Most corporate policies just get in the way of a startup’s capability to explore and experiment. It’s better to give the startup a fixed budget for everything, including salaries, and then to tell the team to be creative with it and get some results. Go play and be home at six!

Most corporate policies just get in the way of a startup’s capability to explore and experiment.

In a proven, repeatable business, it makes sense to economize and specialize. When business models have been validated, competition gets fierce, margins get slim, and enterprises need growth to survive. In such common scenarios, a bunch of specialists, central services, and hierarchal layers help the business to deliver products with predictable quality at scale.

In an unproven, non-repeatable business, it is quite the opposite. Innovative product development works better with cross-functional teams, distributed services, and less or even no hierarchy. The rules for exploration are entirely different from the rules for execution, and the teams need to be managed accordingly.

The rules for exploration are entirely different from the rules for execution.

Your business is like a family of products. Some are children; some are teenagers; some are grownups; some are grandparents. All of them are different. Never forget that startups are not scaleups. Different teams need different practices, or else you might end up with screwups.