Autonomy, ownership, and accountability. These three things unlock the highest level of execution. The most performant teams are able to maximize all three to make the highest impact. These are foundational principles that need to be embedded in all practices in the organization.
In this post I am going to walk through (1) a structure, (2) a process, and (3) a cadence that we use at Kik to make sure high performing teams are getting maximum leverage out of every opportunity and every resource.
Marc Andreessen said it best: Matrices are death.
Matrixed organizations turn into a web of dependencies. Teams are forced to be reactive, often toiling away on things that were thrown over the wall to them by another team. And if you’re the team throwing over the wall, you’re hamstrung to move forward until someone else delivers a key piece you need to move forward. When you’re the dependency it’s impossible to prioritize because everything that comes across your desk is “top priority” to unblock someone else. Death by a thousand cuts.
It makes sense that a lot of teams companies that scale evolve into a matrix. They’re building out from a core nucleus where there was likely one mission: ship the product. It’s an all-hands-on-deck environment which is what makes startups so much fun. However, as an organization evolves, and every employee is no longer a de facto head of X (because they’re the only one in that function), the organizational structure needs to evolve to match.
Many founders cite diminishing marginal returns on incremental resources. Scale begets stagnation. Amazon is famous for their two pizza rule for teams; a team can’t be bigger than what two pizzas could feel (and rationing a slice between three people doesn’t count). Teams need to operate with ruthless efficiency, but size isn’t the only thing that matters (yes, size matters). It’s also the scope and composition of the team. Not only do you want the team to be satiated from two pizzas, you want that team to function like the startup that actually was living off two pizzas in the early days. When we talk about optimizing for autonomy, we really mean autonomy. So as the organization scales, rather than organize by function, organize by mission. Think of these teams as their own mini startup within the company. Each has their own mission, strategy, and resources they need to execute. As scope increases, split the atom and spin up a new team (startup). As the company scales, optimize for more teams with narrower scope, not bigger teams with wider scope.
Every team has their own customers, too. For product driven teams this is easy to conceptualize; their customer is the user, and they are building for that user. But even teams like HR and Finance have customers as well: the other teams. For example, if a product driven team wants to hire another designer, they will engage the HR team to help in that process to help source candidates, draw up an offer, etc. but it is the responsibility of that team to close their candidate. They are a customer of the HR team.
Leadership comes from within the team; people management and mentorship comes from outside of the team. The team lead effectively serves as the CEO and is accountable to the success of the team. The management team works with each person in their domain, across the teams for people management and professional development. They also serve as a resource to the squad to tackle tough problems. Think of each manager as an Entrepreneur in Residence for the portfolio of mini startups. Below is a simple graphic that shows what this could look like. Depending on the nature of the business this structure may look different – nomenclature will vary on every business as well.
With a structure of autonomy in place, it is important to keep teams tightly aligned to the broader company mission and objectives so that we are all working in concert to drive the highest cumulative impact. The highest performing teams, and individuals within those teams, are motivated by hard problems and talent density to tackle those problems.
An effective tool to align teams to drive the highest impact is the OKR framework (Objectives and Key Results). There are many derivations of this tool initially implemented at Intel and popularized at Google, but in essence it is a set of objectives that are directional and strategic in nature – what the team is going to deliver – and key results that underpin those objectives. The key results are specific and measurable in nature – how we will know we are successful. The key results should answer: if X is true we will know we are successful and if Y is true we will know we were unsuccessful.
The role of the leadership team is to provide top down context on the tough problems we are going after which provides the directional clarity to empower bottoms up ideation. Not only does this maximize buy-in and accountability, this uncovers the highest impact opportunities; these teams are going to bed and waking up thinking about their specific domain. That being said, the company strategy is not a democracy – the management team should first set company OKRs and share those so that teams can build OKRs that drive maximum impact towards the company priorities. These should clearly articulate what the company is driving towards with enough breadth that each team can draw a clear line from the impact they can make to the topline company goals.
Once the company OKRs are clear and communicated effectively, the next step is for teams to develop their OKRs that ladder up into those. An effective tool to develop the OKRs (a tool for a tool – very meta) is a derivation of the operating plan format used at Amazon. At Amazon, teams develop an annual six page plan that takes a narrative form to articulate what the team is going to deliver. This format is driven by a mock press release with a retroactive story that outlines what got the team to where they are one year from now. Although I do love the idea of the six page narrative, we wanted to optimize for efficiency in the operating plans and keep them as lean as possible without diluting the impact.
The format we developed is a two-page template designed to add structure and clarity of thought to the development of the OKRs without creating unnecessary overhead. Here is a sample template (compressed to fit on one page):
Keeping with the mini startup framework, these teams then have a ‘board meeting’ with the leadership team to unpack the operating plan, get feedback and make refinements.
Something Amazon does that I believe every organization should implement is a memo-driven meeting. I wrote about why I love them here, in case you want to unpack this further. I would recommend that these board meetings start with a silent review of the operating plan, followed by a discussion. No presentation, no slide deck, no computers, just printed copies and pens. The silent review is a forcing function for the team to develop an operating plan that tells a concrete story and can stand on its own. A good operating plan that does this now stands as an artifact for the team to refer back to, share with others, and help onboard new team members as they can go through the previous operating plans to understand the trajectory of the team.
Three keys to this format
- Having the entire squad present eliminate asynchronous communication and allows everyone to get the feedback all at once, from the source. This helps the squad leads get maximum buy-in and keep everyone aligned. This also gave an opportunity for everyone to participate in the discussion, uncovering new ideas that were originally not captured in the operating plan.
- Doing board meetings with each team (not just the product teams) is empowering and ensures maximum leverage from every resource. It also allows the leadership team to get the full picture of all the moving pieces and uncover areas of opportunity that could have been overlooked.
- The standardized document and silent review maximizes efficiency of the discussion. Everyone is able to get the full picture all at once, organize their thoughts with full context, and jump right into a collaborative discussion.
Once the OKRs for the teams are locked, they’re shared with the full company. (1) This is a great opportunity to celebrate the high impact objectives for each team and get excited for each other, and (2) this keep tension on execution with very public accountability. I would recommend setting up a master spreadsheet with the front tab showcasing the company OKRs, followed by subsequent tabs for each individual team’s OKRs. This is a living, breathing document that can be referred back to at any time and tracks both progress and confidence. Here is an example of what that could look like:
Any good process accelerates execution, it doesn’t slow it down. In order to get the most of this process I would encourage that companies compress the schedule without rushing it. Compressed schedules are a great forcing function to deliver high impact work without getting into analysis paralysis. If a company can dedicate one week per quarter for this it will render high impact without slowing people down – a week is big investment of time and energy, but can pay huge dividends for the following 12 weeks of laser focused execution. It’s also a fun environment and can feel like a strategy hackathon for the quarter. Here’s a sample schedule:
Once this is shared with the company, this is a tool to be used day-in and day-out; it is not a set it and forget it document. The third piece to execution is the cadence.
Fred Wilson wrote a great post on this titled The Heartbeat. It’s a foundational piece to drive momentum and keep tension on execution. The OKR process often happens on a quarterly basis, but it’s not enough to just meet once per quarter and do 4 show-and-tells per year, this needs to be a daily occurrence. Just like our heart beats all times throughout the day, not just when we wake up and go to bed.
Every company culture is different and there is no one size fits all methodology here, the only thing that isn’t negotiable is the need for consistency and tight feedback loops. This also happens at all levels of the organization.
A framework that has worked well is the following:
Quarterly: OKR Week
Mid Quarter: Teams check in with leadership team; present findings, progress; make iterations/course corrections
Monthly: showcase from the teams to share wins, demos, graphs etc. The purpose here is to celebrate successes and share our learnings.
Weekly: management team combs through the OKR document and unpacks any OKRs that are at risk or have variables that have emerged. Encourage teams to leave notes in their tab on the confidence boxes; also to speak with mentors as anything emerges
Daily: some teams do daily standups, some do this weekly – no one size fits all
Tying it all together
Execution is what separates the teams that have an idea from the teams that make an impact. The marginal impact of a company often has an inverse relationship to the rate at which the company scales. This framework of structure, process and cadence is a tool to break through and realize increasing returns on scale in a world that is prone to diminishing returns. I hope this proves helpful.