When organizations grow they become risk averse, they stop innovating and they become much slower.

In this post I’ll talk about some of the reasons of why this happens and how you can build a bigger org that doesn’t have this problems.


Risk Aversion

When a company starts, you’re just fighting to survive and get customers You have nothing to lose. However, then you start getting lots of customers, lots of revenue and lots of employees. *Then, there’s a lot more to lose!

Because of how our mind works, we prefer avoiding losses to acquiring equivalent gains. This means we become risk averse.

Loss aversion
Loss Aversion

Lack of innovation

One of the biggest asks from investors and stock holders is predictability. Predictability means finding a way that for every dollar we invest, we know we’ll get X in return. Predictability is about control. Companies believe the best way to create this control is with processes which make everything repeatable.

The problem with this is that creativity and innovation comes from reflection and chaos. If all our teams do is follow processes and take “requests”, there’s no space for reflecting if doing those requests is the best use of their time or if they could be doing something better for the bottom line. Processes also remove chaos. If you remove all chaos, there’s no way to create something really innovative.

Becoming slower

Every team in the company now has asks/requests for other teams. Every team believes their ask is the most important ask and therefore all requests become urgent. Since the receiving team only follows process and goes through the requests one by one, that means that maybe the most important thing is done last. Or even worse, nobody stops to think what’s the most important thing to do. This means things slow down.

Possible solutions

So how do we deal with this?

1) Instead of creating too many dependencies and processes between teams, try to find ways to make each team autonomous. Create self service tools that allow teams to be self sufficient.

2) Even though processes are useful, make sure to leave space for some chaos and some things that aren’t perfect. This will help foster creativity in the team.

3) Make sure to create a culture where everybody can speak up when they see bottlenecks/waste/problems.

4) Predictability is good, but let’s not fool ourselves thinking that we can have control over everything. Let’s accept a bit this lack of control and use that to do new things!

5) Make sure to create some “artificial” time for each team to reflect on what they’re doing and why. Pause. Stop. Break.

6) Make sure that your teams are created based on objectives, and not functions!

Thank you!