Every start-up that forms in Silicon Valley has a leader with an opinion around how bureaucracy and loss of agility in operations will be minimized as growth happens. The fondest dream of every founder is to create an organization that somehow combines scalability in operations with flexibility and freedom. Yes, Google and Facebook too! Some succeed where most others fail. Lessons for companies? A core set of beliefs/ principles is important (sometimes its worth starting with what’s at the core), everyone seems to agree with that. Starting with the obvious example (e.g. Google’s mission is “to organize the world’s information and make it universally accessible and useful”), and moving on to other companies its relatively easy to identify that companies that have definitive statements do tend to enjoy success @ scalability for a while (there may be other reasons for the company to falter eventually). Developing a consistent set of operating policies and processes….well, that’s a harder one. In discussion with several founders and after studying the evolution of a few (more famous) startups, there seem to be a variety of perspectives on this. One view tends to side with so-called organized chaos, and at the other end of the spectrum, we have examples of companies that spend a lot of time and money defining detailed guidelines and procedures.  Which works better for your company? The consultant’s response – “It depends.” But of course. It depends on the size and scope of the company, the growth trajectory and the aspirations. Do you want to build a $10b company that lasts a generation? Definitely need those (well-defined) operating policies and processes for sure. Interested in growing the business to a point where there is interest from other larger companies that have lost their innovation momentum and want to buy companies that are early on the growth curve? We should have the essentials  in place for sure -governing policies and defined processes across core financials, manufacturing and procurement, supply chain, sales and marketing, along with some aspects of customer operations. Want to grow the idea beyond the core team to demonstrate scalability and attract a bevy of late-stage investors and/ or a buyout? Well, then don’t waste too much time or energy on anything else!

Bottomline, the perceived “slowdown” in operations attributed to institutionalized policies and processes, along with enabling systems is often due to increases in scale and associated inertia and operating complexity. To speed things up again – don’t wipe out the policies and processes; rather, an intelligent analysis and rationalization, followed by definition of operating norms particularly for key roles through the organization. Absence of structure, policies and processes doesn’t guarantee the continuation of prized agility and innnovation. Neither will their presence! Don’t believe me? Take a closer look at two companies in the news last week – Yahoo and Kodak.