AA161 - How Company Size Impacts Business Agility (with Ed Martin)

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welcome to the arguing the Agile podcast where enterprise business agility coach Om Patel and me product manager Brian Orlando debate the real world challenges Agile professionals will face. We are not here to sell you anything. We are here to argue about Agile so that you don't have to. At a networking event that we went to recently a question came up about company size. Over a certain company size does agility work anymore? It wasn't exactly that question, but it was very close to that, and It put a seed into my head that has only grown since that event. Into a tree. Right. About business agility and its relationship to company size. And Ed is here staging his residency on the podcast for one more week to, to talk about when a company grows your business agility is strained I worked in a couple of startups. And in a startup, a lot of people think this like a startup is chaos. And I, I would tell people if you ever work in an effective startup, will you actually find product market fit? No, no, it's not chaos. In fact, when you run into something that is out of the ordinary, You, you meaning the collective you, we'll stop, decide how we're going to handle this. That will become the policy then that will you don't need to write it down. It's in everyone's minds. There's a single digit number of people potentially, there's enough people where all the processes can kind of stay in our head as we decide them. We set the process, we move on. Now, suddenly we're a couple of years later, we're 300 people, 500 people. Pick your number. It doesn't really matter. We're not all going to stop and agree. Someone's going to make an edict. This is how we're going to handle this, some people are not going to be okay with it. Some people are going to not care about it. Some people are going to ignore it, right? Anyway, you've gone from this super agile, super lightweight group of people that talk directly to the customer and are focused directly on one thing and now you've grown and you've got all these problems. So also that event and the conversation that I believe a statement I made that you chose not to dig in there and that was sorry. I was, I was too busy screaming that nobody has strategy. I think that's what I was doing. You were, yeah, strategy. Exactly. Exactly. But I was, I was quoting, I went back and checked it was actually in the, it was in Tim Ferriss's book Tools of Titans, but it was an article that I was reading that I, that, that referenced the fact that it was in the book. And I think it was an article was probably published around 2015, 2017, somewhere around in there. But the rule was everything breaks at multiples of three and powers of 10. So what works for three people won't work for 30 people, won't work for 90 people. And this is the example you're getting to, right? Yeah, that's a great example. And it, this is a, that's a phrase. So the rule of three and 10 is everything breaks at multiples, multiples of three, multiples of three and power of 10. And that was Hiroshi Mikitani, who was the CEO of Rakuten, which is in Tokyo. And there investment group and there was a product they did is one I forgot. Anyways. Ideally the concepts are, you have a process that. You put in place, this is what you're talking about, but we grew, we acquired, we grew again, we let some folks go, we and we haven't, ebbed and flowed through this. But at some point, something just wasn't working anymore. Whatever that thing is. Right. And I've got, I got some notes here on it's benefits, payroll, accounting, sales, marketing, business systems, decision making, infrastructure, marketing, sales, marketing, sales. Yeah. Yeah. Definitely. Right. So all these things break training somewhere along the way. Someone is going, Hey, something doesn't feel right. Right. Why are we struggling here? And so if you, if you stop and realize that that policy was put in place when we were this size and we are now at this size, you can actually start to anticipate. When it's going to break again, if you understand the laws of three and 10, hopefully get ahead of it. Correct. So you can be proactive, but you can also be reactive and realize, Oh, it's because we grew, not necessarily because of the people all too often organization grows and that That time management software they had when there was only three people putting time sheets in it was, it was sufficient. The reports came out, it were okay, but when you start trying to do it with 15, 20, 25 people and you talk about growing the company, it just doesn't scale well. Yeah, or worse you start blaming people because this is your culture now when you're you've gone from three to 30 people and now like maybe some of the leaders that you put in place they're not the exact right mindset that you want and they need to seek a reason that this is not working. Cause what you just outlined was a a problem with the system, the system, right. But system thinking, a lot of people, a lot of people. are very bad, understanding that it is the system that has a problem. Even in the place where the workers are the ones that are manifesting the problem. There's a difference between I have a problem because of a person and a person is experiencing a problem because the system is causing the issue. And people are super bad at detecting the difference between the two. It's a very thin nuance that leads you to seeing the problem from one person to saying well Let me step back and let me think about the quote System if this is truly a one time occurrence, this is a Deming thing about i was just gonna go. Yeah. Basically. It is a deming thing that deming basically said that right He said don't I know i'm gonna mess this up. Don't attribute one off issues to common occurrences when they're statistically like out of the ordinary. Yeah. I screwed that up systemic issues you're attributing to common causes. Oh, Om doesn't know how to work the machine or Om doesn't know how to do check ins or whatever. No, Ohm knows how to do it. But because of the because of the Byzantine check in process that we have, Om only 30 percent of the time does it without issue. Well, maybe we need to look at our check in process. I have a perfect example of that so you know, there's a system in place where if somebody wants to get access to the ALM tool, then only those that are admins can provide that access. And, and an email gets distributed out to the admin. Oh, quick. The ALM tool. Is it Jira fortunately it is not but anyway, yeah. So everybody gets an email. All the admins get an email. I think one of the admins have to just simply approve their request. So I happened to get, get up early that day and I saw this request and I know the person. So I like, yeah, this person legitimately needs access and I did what I've done in the past, which is click reply all and type the word approved and let it go. Four hours later, I get a message back from a group, not a person, a group, not very well named either. So you can't really see who's in it. It just says your request. For approval was denied because an inappropriate response was provided. Yes. And down further in their email, there are a couple of buttons. There's an approved green button and a rejected red button. And I'm, I, I was supposed to click one of those. And not just type approved. But still, it's a person that does the approval, right? So that person decided, well, I don't know. But you didn't follow the process. I didn't follow the process. But I followed the same process in the past. And a different person who saw my email My response understood the word approved means approved and they approved my request in the past this time another person didn't anyway This is all coming back to the same thing, right? Your process is a Too process centric at this stage and it's not the people necessarily and so back to I give another example using three and ten cow multiples is You know when you think of your when you say ALM's and project management portfolio management the tool that you the tool that you use To manage three projects versus the tool you need to manage 30 projects. Absolutely in a portfolio level so Om and I were on the same client one time and we had to roll up our reporting and the tool that we were using for our project management could not support the portfolio level that we needed. And so we implemented another tool and put in some automation. We added more process. We added more process. But we had to build, we had to build a solution to handle the scale that they needed because the process didn't support. This new multiple of growth that they were incurring. Yeah, absolutely. I've seen that too. You know, prior in, in my previous life as a project manager, I've seen that where the company was small. We had a handful of projects. So we use everybody used Microsoft project. It was fine. And then we grew. So they implemented project server. And back in the day, it was, let's just say, not very optimal. It would really corrupt your projects and that's what happened. Resource leveling button. Yeah, it would corrupt them unrecoverably. That's a great point. That's a great point about like that. You need something because I think right now I'm thinking of the ALM tools that I work with and they are all inappropriate at the portfolio level at the program. Basically at a leadership level, so let's say you're a small organization. Let's say you're six people. You can get a ticketing system, you can start a Trello board with no process. Oh yeah, exactly. It's just stickies on a board or Miro for example. Doing, yeah like truly no rules, no nothing. It really is just stickies on a board. And you can say, okay, well here's our business goal. You know, win this customer. That's our business goal. A better example would be a company of three. 1, 2, 3, the three of us and say, okay, the three of us, our business goals to win this customer. What do you think you can do to win this customer? Ed, what do you think you can, in your domain area? I don't know. We've, we probably all work different positions in the company, in the startup, but we probably all have different skills, different things that we're bringing to the table and we all can contribute something different to try to win the customer. So in the, win the customer Epic, we will each have a work item. We'll have three work items that lead up to a business outcome. We win this customer. We win this business. Okay. So we have tasks that lead directly to a business outcome. Now we turn around with 30 people. We go from three to 30. Okay. 30 people can't have stickies. Underneath winning this business outcome. And in fact, the three of us now probably are the leadership team and we probably have more than one business outcome. We're shooting for in a quarter. Maybe we have two should we're going to be reasonable when we're down to, I was going to say, maybe we have 10, we have 10, but we call them. Okay. Ours anyway. No, they're not. They're not. Okay. Are I just going for the, Oh, I'm going for the jugular. Really? Okay. Okay. Ours. So we, we have multiple goals now. We have multiple, 'cause we've grown, we've grown, we have competing values, and we probably have at least two teams. I mean, we're 30 people. We probably have at least two teams. So we have us. We have maybe some support staff and we have at least two teams. Can I add to that with existing customers? We have existing customers and new customers trying to onboard. Yes. Yes. So now since we're good agilists here at this company, here at Brian and Om's second startup, because remember, we sold our first one. That's right. And we cashed out and bro'd down or whatever. We couldn't buy a single yacht between us. We couldn't. Not at all. I don't even understand. But there's one in the bay you might be able to raise. No. Can't swim. Yeah. I can't hold my breath that long. The transition we just did. There's no one system that helps me do what we just did. We just said, Hey, we're three people working directly on business objectives. Now we are the leadership team. We're still setting the business objective, just like we did before, except now the teams have to come to the business objective, come to the planning, tell us how they're hooking into it. Present to us, let us move things around, you know what I mean, to kind of talk back and forth to the team about how they're planning to hit our objectives. A little collaborative planning. We're still directly involved in that. 30 people. Let's say there's three teams and then some support staff, some other people, right? Those three teams are coming to us and saying, hey, we're going to, we're going to do these things. To hit the business objectives, we're going to review it to help them with their quarterly planning, right? That's the system we set up and we can do that We can we can directly come to their planning all three of us because it's very important Because we're setting business direction for the next quarter now We sell out again. We got pe that comes in we got Three four more more people on our leadership staff that pe has put there right private equity is put there So now our leadership team is like seven eight people. We've not now we're 300 people You Now we've got, I don't know, maybe not 30 teams, but maybe we've got 20 teams now. Or maybe somehow our teams have been broken apart and now we're departments or whatever, where we've got giant departments trying to use the same systems. First of all, we're not going to be able to declare a business objectives and then go to every single team's individual planning and then let's say we have 20 teams. So we're going to have 20 stickies, assuming each team only has one contribution to each business objective. We're going to have 20 stickies under the business objective that seems outlandish. And we're not going to be able to go to 20 teams plannings, even if we wanted to. So that struck that won't work at all. So, so if anybody needed. A walkthrough of where this becomes untenable when you, when you go to a, to a factor. You know what I mean? When you, when you go to a power when you go to a 10 x I just walked you through a very real your leadership will now feel that they are no longer in control. Especially for the leaders that started when the business was small. grew to a certain stage, came up with a process that worked for them at that stage. Now the business is 300 people, now we don't feel like we're in control anymore. Them and, their culture, the cult, the culture at three, where's the culture at 300 Indeed. Indeed. Absolutely. And now, we enter all the bad practices that come with bad management. Now we now enter command and control. Now enter a PMO. All kinds of stuff that people recoil when they hear about. It answers because of all these reasons. How can we, the three founders of the organization, be sure that we're still in control of the organization, that the organization hasn't taken on a life of its own? And all those systems, all those areas that I had listed out earlier, right? All those are going to break at roughly the same time. So it creates a, it's, it's, you're not just going to have turmoil in one area. It's not just going to be the sales team. Accounting and payroll are going to have issues, right? Accounting, payroll, sales, development, decision making, all of a sudden, everything is more painful than it used to be if you don't anticipate it. So you have to anticipate that those changes are needed. Those changes are necessary. And the more you. Delay or defer making the change, making the decision to fix those real breaking points. The more pain the teams are incurring and you're blaming the teams for those failures. This is directly identical to deferring maintenance on your car or your house or whatever , okay, defer as long as you want. It's called business debt. However don't, I mean, don't be surprised when the roof is leaking and you have to set up buckets. This brings us back to Gino Wickman's traction, because like, how, what is, what is the, when are you working on the business? Mm-Hmm. not, not working in the, not in the business. Not not in the business. When are you working on the business? What is your cadence for that? Right. Oh, quick. Oh wait, we have none. So I have an experience of working with Traction, working with EOS. And filling out the weekly scorecard, but not taking action on the things that you're seeing on the scorecard. So, there's the other side of it, because it was deferred, deferred, deferred, deferred, later, later, later. No, I need, these numbers don't tie, these numbers aren't helpful to me. How do we make them better? Are they the right scorecard numbers? So, I've experienced it to even, well, we did the process, but was it helpful? What we're talking about now, I feel, Is continuous improvement, correct? So you and a lot of the topics we talk about on the podcast are nuanced. I, I wanna, I wanna throw out a challenge and see if, see if like this is an open, open challenge to push back on me because I feel that a lot of organizations that I've been in have been. Not nuance on this topic. They've been black and white. You either are doing continuous improvement or you are not. They would tell you otherwise, but yeah, I think, if you look at it impartially and just objectively, that's exactly what it is. There's a lot of lip service perhaps out there that we're doing these things. Yeah. They, they know the terms, they see them on social media, perhaps, but you know, not taking action on them. So ultimately if you boil it down, yeah, they're not, but they feel like it. They are, they feel good about it, right? But they're not getting the results. I'll give you an example from my experience about, how organizations that get large and start and they become paralyzed. How they think they're making continuous improvement, but in actuality, they're actually not doing anything. Have you ever been in a larger organization and they have a string of failures or a series of failures or setbacks, or they, they don't renew a certain customer or maybe they don't expand like they thought they were going to expand. And then they have, they bring in a new like department or division manager or whatever, and they have a big shakeup and they do a big org org chart restructure or whatever. That's management feeling like. They're making a difference by just shuffling people from teams. Oh, and people, if you've ever been on quote, agile teams, and you've had management mess around in your teams and move people around from team to team or restructure on a certain team leads or architects, this is the company doesn't want to do true continuous improvement. They're not willing to talk about the process, but they feel by moving people around under teams, under the, under the org chart, they feel like they're making a difference here and that they've done something. They'll cash their check and they'll say success and then they'll be done for six more months and then six more months They'll shuffle your teams again. I'm I'm snickering excited. Somebody show up on my team one time unannounced Please tell me more. I Was on the client site also this person shows up like what I didn't think you were coming I'm not expecting you and why is this happening? So yeah that it happens It's, it's their, it's, it's like, it's like the, it's like the movie based on a book version of Continuous Improvement. It's like something that somebody they heard about the book that was really good, and then they just watched the movie because they couldn't be bothered to read the book of Continuous Improvement, rather than actually talking about the problems and taking them seriously. Well, sometimes when you're when you're raising the problem and you're actually trying to do continuous improvement You're viewed as the troublemaker of the problem. You know, you're the problem because you're raising the issue. Oh, yeah, that's right. Yep, yep. You're raising the issue, you're the, you're the troublemaker and they take action. Yeah. You know, get rid of you. Right, right. Because you're the troublemaker. That's, that's the shoot, the messenger organization absolutely right there. And there are a lot of them. Well, all that gets you is a culture of nobody wants to say anything when they see problems. Yeah, once you, once you see one inmate, I actually worked for a gentleman who said sometimes you say one inmate? That's what I heard! Yeah, but the phrase was sometimes you have to shoot a hostage. And that was how he kept you in line. But that was a phrase that was used by a business leader. And that was his judgment for once you get, once you get rid of one person, everyone else is going to get in line. That's the, yeah, the fear based mentality. I, Out of everything we're going to talk about that. I think I understand the most. I understand why this management philosophy still exists. The, the, the, the Taylorism, I have the checklist. I know how the job's supposed to be done. If you're not following every single step on the checklist, I'm going to go get my wait, who do they have in Taylorism? That who's HR in the, in the Taylor? I'm going to go get the disciplinarian and they're going to wash you out. And because you have no education and no, no shoes and no, whatever, like basically getting washed out of the company is it's like the end of your life at this point, right? Cause you have no other options it's globalism is not a thing yet. So you only live in the little town that you're in. What happened in all seriousness, just to get human real quick, that's what's happening with some of these layoffs. Right now, some of these layoffs are affecting people's lives. I have, I have a person who worked with me in an organization, not for me, with me in an organization, probably 20 years ago on LinkedIn is publishing that he's about to be evicted. So, just to be real real quick, there, there are, when we talk about what it was like then with Taylorism we're seeing that happen again with some of these layoffs. Yeah. Yeah. So I just want to be empathetic to some of those folks out there right now that are really struggling that were part of last year's large layoffs with more this year. And hopefully starting to tail off. Yeah. Sorry to get, just bring it back, but wanted to pause for empathy for folks who may be listening to this. I don't want to. I don't want to make too light of that situation. You're absolutely right. It's real. It's affecting real people, real life. Absolutely. it's a leadership values question for me. You're a blockbuster running the most efficient video rental stores in the world while Netflix creeps up on you. The product manager in me. That's my takeaway is my goodness , why can't you see? That you're you're sailing the ship right into the rocks? Like, what are you doing? And so there, there was listening to a podcast. They don't know who to credit it to. Cause I've listened to so many. It was, it might've been the argument. It wasn't, I'm sure it wasn't this one, but, but you may value the question. I'm getting ready to share with you the person. Said what is your hundred percent when you when you put in a week's worth of work You have to know actually might have been do you know what? I think it was Yeah, I didn't know that. I actually think now i'm saying that a lot I think it was one of his one of his i'll share it with you after don't look for that Right here. Let me see. It should be i'll pull up for you. But anyways, it's what is your hundred percent and the here it is so what is your hundred percent so for Some founder, entrepreneurs, their 100 percent is 85 hours a week. And if their 100 percent is 85 hours a week, they expect everyone else's 100 percent to be 85 hours a week. If your 100 percent is 55 hours a week, and then after that, your family time and sports with your kids or whatever. some people have to actually stop and think about what their 100 percent is. And then making sure that they're not allowing the business to encroach. On that or if they if that is a boundary they set that correct boundary but without it you have you have leadership teams out there getting all over other people because Other people aren't running the business other people aren't making the same salary the same bonuses the same While we're all going the same direction 100 are different Yeah yeah. That's commonly what we these days refer to as the work life balance, which I reverse the phrase and say, it's really life work balance because we had life before we have work. But yeah, I agree with you. People aren't equating what their, what their role is with their hundred percent, because like you said, leadership, if you're an entrepreneur, you're fully invested invested in the company and 85, 90 hours. When there's an exit, you win. Yeah, exactly. And you expect other people to do the same thing because you're modeling the behavior. You want them, you mean leading by example? Well, in this case, it's leading by bad example, right? Cause you're not really being aware of what, what you're causing. That was a throwback to another conversation. I mean, I mean, I mean, like that's easy to push back for me. Cause again, like when I was in consulting, I got partnered with the startups a couple of times. And in the startups, let me think about a tactful way to say they don't value you unless they believe that you are committed to the level that they are committed. And like you just said, like they're, they're in it for life. Yes. You know what I mean? Like regardless if they see an exit or not, like they might just be burned them in. I will. They don't see an exit. You know what I mean? They're, they're just trying to not have to fire everyone. They're just trying to make the next paycheck. It could be that. It couldn't, it could be like, we like to harp on people all the time on this podcast about buying your next yacht and whatever. And most, most people like deserve it, first of all. But you know, again, I've worked with those people that are like, they're not making hundreds of millions, hundreds of millions of dollars every paycheck or whatever. They're, they're close to zero on the balance sheet. Some. So, yeah, and, and, The true entrepreneurs are, are pulling in nothing. They're sleeping in the dust. And for those people, it's, it's the, their values come down to are we, are we making a difference? what we would roll that back up to his customer value. I mean, it will, what is the actual tangible customer value delivered by our solutions and they can really point to it and really measure it and they can like this customer testimonials and there's things that you could do to actually prove you really made a difference. But also like those people that are like you know, they're not that what have the opposite of phoning it in is what they're doing. Those people are highly transparent. They can't work without high trust. These are like leadership principles which is again, the opposite of where I was going, where, where I was talking about the organization blowing up and now you get this, this whole management class they're not really contributing anything this, this, this sense of leadership value what you said about leading by example this management class like the pushback they will give you is they will perceive this whole let me run an experiment and see how it goes as a lack of control or or they'll say Well, you don't have a set direction you don't know what direction you're headed in So they'll take that as like weakness of some sort And I don't think that's right at all. Because when you were startup, like that, that intuition of like, I'm not quite sure this is the next step, but let's go look for evidence. Let's test out ideas on the market, on the actual directly on the market with customers somehow when you grow 10 X, your size, especially for me going through that at a company I was at when we went from 30, 35 people to like 300 or 500 people or so somewhere in that range. Yeah don't, don't say like, oh, I don't know if this is gonna work, but we're gonna try it and show evidence that sign of weakness, you might as well like have blood in the water at that point with the sharks swimming around because the, the, the career managers that they brought in around the company at that point would eat you alive. At that scale, when you have 300 and you started with three, the original really cannot do those things themselves. So these other people that they bring in, they're not vested in the same way that in, in their thinking and commitment. So they're like, they're going to look down and say, yeah, lack of direction, like don't know what you're doing, that kind of thing. What do you mean experiment? It costs money to run these things, right? That's the mentality that it kind of gravitates down and it takes away. This whole idea of trying little things, figuring out what works and what doesn't, and preserving options. Yeah. It just gets rid of that. And one of the things is when you find yourself in conversation with, Well, when I used to do it, and there were only three people. Right. I didn't have a problem, why do you have a problem? Right. It worked for me, why can't you do it? Yeah. You've lost the, you've lost the culture of experimentation that it takes to get a startup off the ground. And, and, and. The funny thing about going through that again, I've, I've gone through the transition. The funny thing about going through that transition is like you, you don't even realize that you've lost it until it's like long gone. Yeah. You know, and now anything like I think of I think of like where, when you're going, when you're going to product manager interviews, one of the things that you will ask is, or even when you're interviewing product managers, I guess it's on both sides, I guess it's on both sides it's a very important question. Where do the ideas come from? Because ideally what you want to hear. And then everyone will tell you what you want to hear, but then you have to dig, right? It's up to you to how to dig but everyone will tell you Oh, they come from all up and down and inside and outside and left side and right side and whatever and I'm like, hey man, like I watch Willy Wonka too like calm down, I like what In most organizations, when you grow to a certain size, like the ideas don't come from the teams anymore. Like it's a top down that you, like the natural progression is to push you toward feature factory type of like, Hey, listen, kid. Go sit in your seat and we'll tell you what to code. You don't need to do standups and you don't need to question business value. You don't need to look what goals to look into. We have top people at the end of Indiana Jones right now. We have top people working on this. We don't need your contribution. This is exactly. So at this stage, you've now, you've now well start started to slide down the slope of business rigidity, right? Right. I mean, that, that's really what this is to the podcast that we're on business agility and size. I mean, size is almost. Proportional to business rigidity, right? The bigger you grow, the more rigid you get, right? Unless there's intense really intentional efforts made to reduce that, but you still can't go back to the level where the three of us started the company. Right, right. Correct. You can't because there's too many people involved. Yeah. Well, the idea that there's a parable, I guess, but you know, no man can cross the river twice, right? Cause he's not the same man. He's not the same river over time and everything you've changed. And so it was the river. So you can never go back. So from a leadership standpoint, You, you have to make sure you're reinventing the culture and reinventing the organization, reinventing the processes for what you want, but to what you're described, I see a loss of engagement with the, with the teams at that point, right? When we, when we talk about, some people use the word empowerment, some people use the word engagement. To me, those are two different things. Empowerment is when a leader gives you power, they can also take it back, right? I own my own engagement. I'm either engaged or I'm disengaged. No one can make me or take that from me. Mm-Hmm.. So that's my choice. So Empowerment's really cool ' cause you gave it to me, but you can always take it back. But engagement is, is more of that teal organization where it's an organism, we're all in it together, we're all, we're all doing this thing and moving and fighting together because we survive together. Yeah. I think it, that's an interesting point. You said. There needs to be an intentful rekindling of the culture, right? And, and entrepreneurs aren't necessarily the best qualified to do that. At that point, they were, they were gung ho about something. It really burned in there like they wanted to get this done. And that's why they, that was their purpose for being, but now you've grown to be 300, 3000, whatever the scale is. The same three people. I don't believe are qualified to keep that wick burning, right? They get the, get the culture back to where it was when they were there, because the inertia is too big. You've got all these people they have to deal with to change the culture. The, the only thing they can do is, and I'm not minimizing this by any stretch. The only thing they can do is lead by example, right? Which they've done. And hopefully some of that rubs off on their two ICs and they start to model the behavior they believe is coveted sure and then they they in turn pass them without them, but it gets diluted You just can't get that You can't get it done that quickly for culture if we can let's make sure we for me, right? It was I gave definition of power and engagement culture is the behave the behaviors you allow and accept So as you grow to 300 people, what behaviors are you going to allow those 300 people to exhibit? And what behaviors are you going to accept of what they are exhibiting? And that becomes your culture and culture is a lagging indicator. Those are the stories that people tell about your organization. And it's generally past tense. I remember when they did this. I remember when this happened, that's past tense, right? So you have to be intentional to change the stories that are being told about you. Every, every metropolitan area has a company that either overpays for bad environment. And everybody knows it and no recruiter can fill it in, fill it until the salary gets high enough that someone is going to stomach that bad environment. And so we know that it exists, but that's their culture. And those past stories are what's being told that's keeping the recruiting down. So without the intentional effort to get those stories changed, you're in a vicious cycle. So you have to be intentional as you grow. To manage the behaviors and to also change the stories. Yeah, in practice, the way that's done in practice often is through their policies and procedures. Right? And those things can be controlled to a certain degree by people that started the company. But it gets diluted every layer you go down. The 300 to 3, 000, it's hard. And you go beyond 3, 000, it becomes an order of magnitude harder, right? So, would you use the 3 in 10 rule? To be the trigger to re inspect your processes and policies what can we put in place to, to, to inspect on a regular basis, make sure, at least we're trying to stay on top of it as opposed to just ignoring it and just letting whatever happens happens. Well, one of the things is be very well, be very aware of the licensing of your tools, right? So as you're growing Is there a limit on the size of the number of users you can have? And do you go to a different tier of pricing based on the number of users you need? So it's no longer 5, it's 15 per user. And so now when you hit that threshold, you've now increased your cost. Did you make a budget change? Because you know, it's going to happen in August. So the last four months or five months of the year, you're going to your cost increased, but you didn't fix the budget line. And so. Why did we miss our plan? Because we didn't plan for it. So making sure that size the amount of data storage that you can have and the speed of the system, right? So, is it going to slow down as you start adding more users to it? So, just from a tooling part of this conversation is being proactive and knowing the tools that you're using and what are the economics of that tool, the performance of that tool as you start to grow, is it going to be the reason your teams are breaking in their processes? Mm hmm. Can you manage 50 projects in your, in your project tool? Yeah, absolutely. Very valid. I think the other side of it is also trying to try and instill an organizational design. So it makes it less it makes it less rigid, right? It makes it easier for people to, to be fluid as opposed to putting friction in place. And that's an intentional thing. You can do that to the extent it works. I mean, it's not a hundred percent. You can't just wave a wand, but you can make changes to the structure of your organization where it is, it is more amenable for people to be more. Well, would you set that up as a, like a like an on demand pull process or would you set that up to just automatically trigger your inspection phase at certain milestones? You know, do you understand what I'm asking? I know what you're asking. I mean, going back to the rule, right? Yeah. You don't have to wait till you grow that big. You can constantly be looking at it saying, well, are we slipping in any way? And make corrective action throughout as opposed to wait till we're 300 and then look at something and then put something in place. You don't have to do it that way. It's not a step function thing, I don't think. I think, I think the thing is to be aware that as you grow, you will have these pains. And then look at it throughout and say, what's not working today, right? You don't have to put a calendar event on. Just make it open for everyone to say, hey, you know what? I have this issue. Right and that should trigger something. We didn't used to have that. Why do we have it now? Why are people so bad at this? Because I've met a few people that have studied like a few people that are like doctors or organizational, like they have their degree in organizational design very few that are actually professionally in the workplace and like working as on behalf of the company of like, Hey, I'm an expert organization, organizational design, and I'm helping the company to work through The challenges of org design, where they're at now, trying to get them to the next level. I almost never I've met someone who actually is working on behalf of the company. If you go from the point where we were, we were founders in the organization and now we've you know, 10 X our size. Twice over and the three of us are still running the company and the company is 300 people like we're all out of our element. We were all three people that had had a specific specialization in our areas. None of which, unless we're running an organizational design company, none of us are experts. And then, and then when we have a bad org design, now it is a challenge to our identity. We're good business owners and business people. We were running this company when it was three people and now it's 300. We must be doing something successful. I will not take any kind of pushback against that. I know what we're doing for our org design because again, it's an attack on my identity. I'm not going to say that's been the main. Thing that I've observed, but there has been a lot of I'm going to take it personally, if you're going to bring up the fact that our org design is not good. Just going back to the question you asked, why are people so bad at this? Taking the example of the three of us, we're going to be focused on growing the business. And not necessarily focusing on the culture because you know, the culture is just what happens people are around us and they're going to do what we we want them to do basically until they're out of sight out of mind because now with 300 3000, but still our focus is on running the business, growing the business and not necessarily on fixing the culture, right? Or influence of the coach. It's not something you do every day. Yeah. I have to hard pivot back to traction is there should be a framework where yes, I agree with you, yes, we are consumed with working in the business. We've got goals, we're super busy, etc. If you've been working in software development and you don't understand why you keep Putting out successful releases and somehow the business keeps like there's this friction Oh, it's because there's this whole other thing outlining running a good business. That's just not getting done There's your business leaders are just not filling a responsibility That they should be filling as leaders, which is hey We need to look at all, all the little connecting points between teams even in team topologies. There are connecting points between teams You And someone has to be managing those. And if the people like, if the people that are supposed to manage those absolve themselves of that what's going to happen? Like Back to traction. So we have the with traction. You have the weekly pulse with the weekly pulse. You, you check your scorecard, right? Financial metrics, turnover, the whole business on a scorecard. How are you doing? Once you go through your, once you go through your scorecard, you start looking at your your rocks. How are you doing your rocks? You're on track or off track rocks or things that every quarter something try to have three, no more than five, the big goals for the quarter that you should get done. It's part of working on the business, right? And it's, and it's just, are you on track? You're off track, but. Are you doing those things then you can get into your weekly to do is what was I supposed to do this week in order to move the business forward that may have been if we're using an agile term may have been the equivalent of a user story right the week my weekly to do could be a user story it probably it probably is moving forward in epic but epic could be rocks I think I would say I put the rocks right but but something like something I can do in a week's time sure is probably a story. So, I, I need to get this done and it may be part of you know, let's, let's say performance reviews. We're going to do performance reviews, but this week I need to make sure that the system is configured. We're, we're transferring to a new system. We need to make sure it's installed. Make sure we've done some user tests. Right? So, there's all these things that go into doing performance reviews that probably take three months prior to the actual test. Turn the switch on for people to do them. So a to do item could be related to that. Well then, so we did rocks, we did quarterly, or we did to do's. And then after to do's you do your you, you, what are the issues? What are the issues that came up this week that we need to talk about? And then an issue is either a new to do, we've discussed it. So you IDS it. So you identify it, you discuss and you solve. I think it's a D, it might be decide. Anyway, IDS it, so you IDS it, so you either becomes a to do, or it gets, Put on for a later rock item or something. So that is, if you're using Traction to run a business, and you're doing that every week, yes, you should be working on your business. And it should be a focus. But there are times where you go, I'm busy running a project instead of working on this rock. Because that's how we're set up. We can't afford to hire the right number of people we need to run the projects we have. Our projects aren't long term enough. Right. So we keep buying, we keep bidding these short projects. So I can't staff to full staff in order to ensure that I'm not going to have to let someone go after three months. You know, the, the other great thing that you just pointed out is the, the concept that you have that's the, Oh no, I'm sorry. Ed said working groups. I've broken down my org into logical working groups where I know that like most of these teams are working with each other in a segment of the business or a corner of the business that really works with each other. And on the bottom line that they're contributing to the same bottom line. Okay. I don't know how big, how many teams and how large that group becomes until you just say logically like, What these teams are doing doesn't affect or influence at all what these other teams are doing. But I think If you could like have the AI equivalent of a coach segmenting your business, I'm going to guess that there's somehow magically magic. They're going to be around a less than 150 people. I'm going to guess they're going to be less than 150 people working groups, probably closer to your max one 20 number. We probably should have a whole different podcast about this particular subject. But I have a question though, because it's crossing my mind right at the moment that the majority of businesses. In the United States are less than a hundred people, but. In the technology space, we're talking about business agility and things like that. I wonder what the most of the business size is is 3000 a legitimate number for the scaling conversation of our business, or is it truly three to 500 small to midsize business? But we still need to be focusing on when we're talking about, can we adjust as size goes and the rule of the rule of three, do we have the right The things in place to predict that it's coming. So how do we keep this from happening? Do we have the time because we're using something like EOS and we have the teams that we're, we're, we have enough revenue that we can hire the right size of organization necessary to service our customers such that the leadership team. Can service the business. We have the right culture so that we can delegate empower with engaged employees, right? There's a lot of things that go into this perfection that when change starts happening, engagement becomes disengagement. Empowerment becomes command and control. You start twisting on the levers about culture that if you're not. If you're being reactive and you're not being prescriptive in what you intend to do, you are going to miss it. So, you're using 3, 000, but I just want to say, I think it's a much lower number. thanks for coming to my office, Ed, because this is the conversation I wanted to have that's very esoteric, that I, I think that luckily we saved it to the point in the podcast where nobody's listening anymore, and I want to ask, Is that the natural order of things? Like like in the universe, like entropy is the natural order of things. Everything breaks down over time, if not maintained to stay together. So like, it is the natural order of things reverting to command and control as we bolt on additional teams, add additional people to an organization. The drift is the natural order drift to command and control. And if so, if you peel back a layer on top, if you could crack it open a little bit on top And you look inside one eye, is it Taylorism? Is that why? If you want to talk about what is in, what drives entropy, it is in, when, when you're, when you have a value statement is to increase shareholder value. You're destined to have MBAs looking at numbers, only metrics, only quantifying, not qualifying. You just went Taylorism on me. I just wanted to let you know, but that's where the, yeah. So I'm saying yes to, I mean, 1914 or whatever, 16 or whatever it is it's, it's over a hundred years at this point of ingrained. Successful organization in the business, in the education system, in whatever, like it's permeated everything. Is it so permeated this way of working? That it's become the natural order. That's scary. Actually, it is scary. I'm just thinking, yeah, is the, yes, is the answer that it has. I think that's why there are, there are some leaders out there who say they will only work in small, mid sized business. Once that next acquisition happens, that moves them above 300, 500, they're out. I'm done. I'm ejecting. And I've been trying to get in line again. I was in line at one point and it's hard but yeah, it, I, yes, I believe that a, the what someone once told me closer to the top, you get the closer to the door you get. And as acquisition starts happening, acquisitions are about capital, about the raise, about the exit. And as those become the decisions, that becomes the focus. There are some really great PE groups out there that build some very nice businesses that are phenomenal when it comes time for the sale. And there's some that When the sale starts to get close, they start backing off, withholding, and the team suffer, and then you start having turnover, and culture changes, and people aren't happy anymore. And as soon as the acquisition happens, the sentiment is, it's not the same company. And we've, I mean, it's happened here locally to some of the brands that used to be phenomenal brands, that somewhere along the way, something happened to their culture that the stories you hear on the street aren't what they used to be and relate to some of those. Yeah. In the area for sure. I'm just thinking like large companies like GE, for example, right. G is not a company. No, it's, it's a holding company that has all of these companies. Right. Is it feasible even theoretically that each of these companies could run as lean companies, there's small enough, whatever that means That they can run to the point where they can almost like define their own culture. Sure. Yeah, sure. Answer. And so if that happens, then you can kind of take that down to the next level of abstraction, right? Sure. So GE makes appliances and then there's, I'm sure there's a lower breakdown of that somehow, like they make X and Y. Refrigerators and dishwashers or whatever appliance or maybe that's not a great example, but you know another level of extraction and even those little companies can have their own cultures. If you're doing that, then GE as a whole is deemed to be successful, right? Because all of these can be successful. Maybe not all, but most, right? Is that utopia or is that something that can happen? I don't know. I'm just thinking out loud here. I'm thinking scale, right? Scale. So I'm thinking about large companies. GE came to mind. Could be any company. If they break down, they break down. Right. And then instill that culture of, yes, we're still a small company. We're going to operate this way as autonomous as possible. So your, what Om, where you were going was it is possible to break down a large organization into logical, small segments that, can manage themselves appropriately. So, so Ed, you had a suggestion here. Yeah, I was just, I was going, I pulled up my, my Kindle book of reinventing organizations. Once again I did a talk on it probably five, six years ago was when I was introduced to it. People were really talking about teal organization, like what's a teal organization. So I found the book, read the book. But what Om was asking was, can organizations work in smaller units? And I was saying, yes. And there, one of the examples in the book was Bertsorg it has 9, 000 people, but what's the name of yours? I believe it's Bertsorg, B U B U R T Z O R G and it has 9, 000 people, but no one is the boss of anyone else. Right? And so it takes a certain dynamic, a certain culture, a certain belief system to the core of everyone in that organization to make that work. As soon as someone shows up with ego and is the first person to say, I'm the boss of you, I don't have to listen. And then some of them say, I don't have to listen to you. And that's, that's an extreme independence. Sure. Then one person is trying to be extreme independent and one person is trying to be the boss. So I'm looking at those of extremes. Then that culture starts to break. So you, you have to have that value in you, that internals, the drive that I'm going to help make this work. I am engaged and I believe I'm buying in and we all are, but as soon as someone says, I'm the boss, yeah, it changes it. You know, as again, as a product manager on the on the podcast I normally, I, I've not contributed much in the way of product management on this podcast, but I feel what I can add today is When you have solid goals that are visible, a company mission that is visible to everyone that everyone really believes in and when your leadership like lives the values, it's easy to do what you're saying. Like, Oh my goodness, how can you align 9000 people? Actually, it's kind of easy if you're, if your mission of your organization, your vision for what the future might look like are big and bold. And like, it's, it's honestly, it's not that difficult to attract people. I have a bad bias on Mission because there was a comedian by comedians. He was the, actually not the speaker, he was a motivational speaker, a demotivational speaker. Oh. Yeah, he was the pitbull of moti anyways, this is his own brandy, but Larry Wingate back in like 2003, 2004, I heard him speak. And one of the things he did is he took the Dunder Mifflin, the office, he took their mission statement, removed Dunder Mifflin, and moved the reference to paper, and said how many people have a mission statement that sounds like this, and everyone's like, oh, it's great, rah. So even a fictional, comedic, company can write a really good mission statement. So mission statements sometimes to me, I, I just, I roll all the way back to the comedian, making fun of it because sometimes it's not worth the papers written on. I understand. However, like it's, it's one thing to, it's one thing to, this is like when we say, Well, your leadership has to really embody the values. Like this is one of the things it's like people, especially, especially the younger, the people I feel the more they can detect. If your words do not match your actions it's Immediately, you're not authentic and people will cash out and that's the type of organization you'll get almost overnight They've got a model behavior. They want absolutely right. I believe that a company that is like, Burtzog That nobody's the boss of anyone else Their organizational structure is more flat, I imagine, right? Maybe more like a holacracy. There aren't too many of them out there, I want to say. I mean, I'm trying to think about some of them, maybe. You know, I don't know, Zappos comes to mind, I don't know who else. To be flat like that you probably have to be distributed . Or product line or something. Product line, yeah. In the book one of the examples was, was nursing. It was an overseas nursing, I believe it was in the UK. They had 50 nurses in this neighborhood area. Sure. And they would actually go sit and have coffee and get to know these elderly patients and more so than just a doctor's checkup. They actually got to see them in their environment. They got to visit with them and it became a whole health thing where the actually patients stopped didn't have to go to the hospital as often. Their sense and value went up all because these nurses were empowered to function within the space that was necessary to make their patients better, not to meet a financial number. But yet the benefits actually drove cost of health care down because those patients weren't actually going in. So, I don't have, it's been a while since I read those sections, but it's a book that came up via our conversation. The Pretty predictable success. We're like, we're gonna, we're gonna refresh ourselves on that one. And we're gonna have a future podcast on that one. We'll, we'll do one just on that book. And and I want, I want to have you back to do one on extreme ownership as well. So the, two book reviews that I want to do, any books you want to do on here, man. Yeah. Well, this sounds like a great, future podcast. what should they do, Om? I'll catch you when you slip sipping, sorry, can't, can't be caught sipping. Not slipping, not slipping, just sipping. And, and kind of just taking it all in thinking already for the next podcast, what are we talking about? Like and subscribe. I was trying to queue you up for it. Yeah. I want to try that again. If you're still listening, first of all, thank you to both of you and like, and subscribe our podcast. Let us know other topics you'd like us to delve into. That's right.