The Dark Side of Scaling Up

There are many splendid consequences of successful scaling: The wealth and jobs created by companies such as IKEA, Google, Procter & Gamble, Facebook, and Starbucks. Yet, despite our society’s penchant for worshipping such successes, bigger isn’t always better. Success is rarely all it is cracked up to be.

If you are in throes of a scaling challenge, or plan to tackle one soon, you might try a form of imaginary time travel. Pretend that a few years have passed, that you and your colleagues have achieved your scaling dreams, and that you are looking back from the future. This “looking back from the future” approach helps leaders and teams with all sorts of scaling decisions. One good question to ask is “Are we happy in the world that we worked so hard to build?”

As an organization grows, whether you like it or not, it will require more hierarchical layers, managers, rules, and (often) annoying administrative processes. It will also become increasingly difficult to maintain personal relationships with all your colleagues. The pressures created by a large and successful company often push leaders and teams to their limits and require them to do chores that they despise.

Consider this story. Mitch Kapor started Lotus in 1982. Lotus 1-2-3, quickly became the hottest-selling program for the IBM personal computer. Kapor didn’t have the desire or temperament to run a big company, so he remained chairman and promoted ex-McKinsey consultant Jim Manzi to CEO. Manzi grew Lotus and stocked it with many “sales types” and “process types” from traditional corporations such as Procter & Gamble, Coca-Cola, and IBM.

In 1985, Freada Klein (then head of organizational development) did an experimen: she pulled together the résumés of the first forty Lotus employees. Most of these early employees had skills the growing company needed, but many had done “risky and wacko things” such as being community organizers, being clinical psychologists, living at an ashram, or like Kapor, teaching transcendental meditation. Then she submitted all forty resumes to the Lotus human resources department. Not one of the forty applicants, including Kapor, was invited for a job interview. The founders had built a world that rejected people like them.

Summing-up: Kapor’s story shows that the people who develop great ideas are often ill-suited to run, or even build, the big companies or programs required to spread and sell them. And some of the best entrepreneurs and innovators dedicate their days to starting and building social worlds that they will abhor living in – and, as Kapor discovered, that will never hire people like them!

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