The Impact of People and Leadership on Scalability
- Fighting with a large army under your command is nowise different from fighting with a small one; it is merely a question of instituting signs and signals.
- —Sun Tzu
People, organizational structure, management, and leadership all have an impact on the scalability of your organization, your processes, and (as a result) the scalability of your product, platform, or systems. They are at the heart of everything you do and the core of everything you need to scale a company and a platform. Paradoxically, they are the things we overlook most often when attempting to scale large systems: Our people are overlooked and underappreciated; organization structure is a once-a-year, check-the-box exercise written in haste in PowerPoint and managed by HR; and our managers and leaders are often untrained or undertrained in the performance of their duties. In this chapter, we will explain why the people of your organization, the structure of the organization, the management, and the leadership in your organization all have an enormous impact on your ability to scale your product, platform, or services.
Throughout The Art of Scalability, we will refer to a fictional company, AllScale. AllScale started out as a custom software development company, contracting individual developers out by the hour for projects. Over time, the company started to bid on special custom development projects for both back office IT systems and Web enabled Software as a Service (SaaS) platforms. As the company matured, it started developing tools for its own internal usage and then started selling these tools as a service to other companies using the SaaS model.
The tool with which AllScale has had the most traction is the human resources management (HRM) system. The tool is an employee life cycle management system, covering everything from recruiting to termination. The recruiting process is automated, with resumes held online and workflows depicting the status of each recruit and notes on the interview process. After an employee is hired, all corporate training material is performed online through the system. Employee reviews are performed within the system and tracked over time. Associated merit increases, notes from one-on-one sessions, previous jobs, and performance information are all contained within the system. When an employee leaves, is terminated, or retires, the notes from the exit interview are retained within the system as well.
AllScale is a private company with a majority ownership (51%) obtained by a single venture capital (VC) company after a B-series round. The VC firm invested in both rounds, having decided to make its initial investment after the company started building SaaS product offerings and seeing how AllScale's HRM software started to rapidly penetrate the market with viral adoption.
AllScale is an aggregation of our experience with our clients and our experience running technology organizations within Fortune 500 and startup companies. We decided to focus on one imaginary company for the sake of continuity across people, process, and technology issues. The evolution of AllScale from job shop contractor to the developer of multiple SaaS offerings also allows us to take a look at several unique challenges and how the management team might overcome them.