If your company is growing — especially if it’s growing at a fast pace — there is plenty of cause to celebrate. But there is also cause to look cautiously before you run full-steam ahead.
Tech startups with venture-backed funding in particular face the unique challenge of scaling a business while maintaining quality and integrity.
Related Article: How to Maintain Company Culture in a Rapidly Growing Business
So, what steps can you take to keep your company on the right track? Justworks has experienced some explosive growth in the past couple years. But Justworks’ CEO and Founder, Isaac Oates, has focused on scaling the company in a healthy way from the beginning.
Since Justworks is an HR company first and foremost, Isaac has taken special care to focus on keeping employees happy and productive.
He answered some questions about the biggest challenges at each stage of growth, and what company leaders should keep an eye on when they’re scaling the business.
What were big differences going from...
When you’re scaling from 10 to 50 employees, the hardest thing is getting the business in a place where the model is working. In terms of people, having an All Hands meeting every week is very helpful. The company is still very tight knit, everybody knows everybody. You don’t have as many HR [behavior issues] as you do with a bigger company. At that stage, you still communicate with everybody, you still sit in one room, and there isn’t more than one layer of management.
Scaling from 50 to 100 is harder. It’s not until you get to 50 or 60 people where you start to see bad behavior. You can’t count on everyone to always do what’s in the best interest of the group, so you have to actively manage that. That goes from signs in the bathroom to flush the toilet to actual HR violations or misconduct.
The organization also gets more complex. You’ll start to have sub-teams. In our case, sales grew faster than the rest. We started adding more executives at that point. You start to think more of the challenge of scaling.
This is the point where you go through the process of building a full-fledged leadership team.
That stage is harder. That’s the point where you go through the process of building a full-fledged leadership team, and where you can’t rely on things like the All Hands meeting or an email to everyone@ to get the message across. Communicating is harder.
I’ve noticed a more inward-facing view. When you’re small, everything is outside the company. You’re very aware of the context the business environment operates in. When you’re 200, you could easily only talk to your coworkers and exist within the organization. It’s important to over communicate and keep an outward orientation where employees are focused on customers and the environment in which they operate.
At this stage, many of the tools that I used to lead the company stopped working. For example, it used to be easy to get the entire company in the room and talk through challenges and really engage with people. At 400, it’s physically difficult anywhere other than a theater, which is expensive and challenging to schedule.
Each job role or function is more complex, and it becomes more difficult for employees to understand what people do in other departments. For that matter, the entire company is more complex, and it’s difficult to explain in a simple way how the whole thing comes together. Employees want to get things done, but in a collaborative environment they have to speak with more people to achieve things. Ultimately it’s harder on the margins to make changes.
What was the most challenging?
Growing from 100-200 was definitely the most difficult stage.
Growing from 100-200 was definitely the most difficult stage. Every founder I’ve ever talked to who has scaled past it has thought the same, which was helpful for me to hear. It gave me some warning ahead of time, and when I was in it, I knew what it was. Continuing to communicate as much as you can is really important, as is knowing you’re going to have to make some tough decisions.
How have you set up Justworks to scale?
The funny part is, people in the organization are much more wed to how the organization works than I am. For me, we have business objectives and should organize accordingly. But to people in the organization, it’s a way of life. Change is scary and creates uncertainty and anxiety.
I have noticed this tendency that we have to be the final version of ourselves, to get the final answer. But you’re never at the final answer. This desire is at odds with what happens — what is appropriate six months ago versus six months from now.
What challenges do you see coming beyond 400?
Based on my experience over the past couple of years, I think communicating effectively as the company grows will continue to be a challenge. It’s going to be important to contextualize all the things that are happening so everyone understands how their role fits into the bigger picture.
How do you keep employees connected?
Keeping people connected to the larger purpose of the organization is a part of it. Communicating change deliberately is another part of it. The bigger we get, the more change people see. A lot of planning goes into restructuring things, and people find out but have time to ask questions. I think we do a really good job of that.
What are common mistakes?
Probably leaving people in positions they shouldn’t be in. Startup lore suggests that you should fire people as their positions outgrow them, but I would say in almost every case, we’ve moved people. There are a lot of employees at Justworks today that were in the group of the first 30-50 people, and they’re in different positions than when they started. They’re some of our best people. You have to be direct but compassionate about it.
I cringe every time an early employee leaves, because they’re irreplaceable. It’s natural, but when it happens, it makes me really sad. Most people who work here recognize this is an unusual opportunity, and they’re flexible about changing their role. That has allowed us to keep great employees we might have otherwise lost.
Successfully managing a high-growth company is an incredible opportunity. It’s also a continual challenge. Take deliberate steps to scale the company with employee well-being in mind, and you’ll lay the foundation for becoming a great place to work.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.