33. How do you scale from 100 employees to IPO?

The Operations Room: A Podcast for COO’s

In this episode we discuss: How do you scale from 100 employees to IPO? We are joined by Mark Logan, ex-COO of Skyscanner and currently Chief Entrepreneurial Advisor to the Scottish Government

We chat about the following with Mark:

• What are the foundations of scale?
• How do you prevent command and control from creeping in?
• What goes wrong with organisational alignment over time?
• Why doesn’t OKR cascading work?
• What are the three golden processes of an organisation?
• Why do things break when you scale? What do you need to look out for?
• What are the three golden processes of an organisation?
• How do you get the innovation process to work?
• When does it make sense to go cross-functional across the organisation?
• What is expected from a C-level role?

Biography:

I have over 25 years' experience in highly successful startups and 1st-tier internet tech companies. I have been instrumental in the success of multiple award-winning start-ups, including Skyscanner, one of Europe's most successful tech companies, where I joined in 2012 to take on the general management of the business, culminating in a £1.5billion acquisition in 2016.

My experience spans consumer internet economy startups, executive management, organisational development, change management, strategy development, contract negotiation and delivery, software development, growth science, sales and marketing , HR, large scale programme delivery and operations management, including lean agile techniques.

Currently mainly focused on helping to nurture the start-up community in Scotland and the UK as an investor, non-executive director and advisor.

Summary:

• Scaling a business from 100 employees to IPO with ex-Skyscanner CEO Mark Logan. 0:06
• Bethany: Investing in individual competence is essential for setting up employees for success within their roles.
• Brandon M: Mark Logan prioritized this by focusing on developing the skills of each employee at Skyscanner.
• Bethany highlights the importance of career development and line management effectiveness in retaining staff, rather than allocating budget to wellness programmes.
• Bethany suggests that companies need to carve out time and give permission for employees to think and learn at work, and celebrate their efforts to create a learning environment.
• Brandon M. shared his experience with OKRs, highlighting the importance of practical application and alignment with business strategy.
• Bethany agreed, emphasizing the need to balance structure with flexibility and contextual understanding, citing Nike as an example of a company that executes OKRs effectively.
• Resource allocation and technology adoption in business. 8:17
• Bethany highlights the challenge of resource allocation in product development, particularly when it comes to balancing the need for new technologies with the reality of limited resources.
• Bethany emphasizes the importance of having a clear understanding of how new technology will improve processes and outcomes before investing in it.
• Scaling organizations and maintaining agency. 11:03
• Bethany: Friend's security company has accidentally implemented decentralized decision-making, leading to no bottlenecks as they scale.
• Mark Logan: Foundation of scale is agency, as company grows, founders' urgency decreases, and staff takes over.
• Mark Logan: As company scales, agency of frontline staff drops rapidly, leading to productivity crisis.
• Bethany: How to keep agency alive as company grows? Contrast agency with autonomy, and define agency as consisting of basic competence and other factors.
• Restoring agency in organizations. 16:03
• Mark Logan emphasizes the importance of competency and ownership in a growing company, citing examples of incompetent leaders and lack of clear ownership boundaries.
• He uses the analogy of a book club to illustrate how founders should not assume that everyone is on the same page and should actively push ownership to the frontline.
• Mark Logan: Alignment issues can lead to loss of agency, where employees feel disconnected from the company's strategy and lack access to necessary resources.
• Mark Logan: Best practices for maintaining agency include regular check-ins, clear communication, and providing employees with the necessary tools and resources to do their jobs effectively.
• The challenges of implementing OKRs in a rapidly scaling organization. 21:00
• Mark Logan describes the evolution of his company's goal-setting process, from initial alignment to cascading objectives across teams, to eventually hiring a project manager for alignment.
• The company realized that the goal-setting process had become cumbersome and was hindering progress, leading to the creation of a new role to manage alignment.
• Mark Logan and Bethany discuss the challenges of scaling OKRs (Objectives and Key Results) in businesses, particularly in terms of losing alignment and control as companies grow.
• They believe that the solution lies in enabling and influencing employees, rather than controlling them, and that this approach should be reflected in the contract between managers and employees.
• Organizational structure and innovation. 26:20
• Mark Logan argues that neglecting certain aspects of agency can lead to poor management and creation of barriers within an organization.
• He suggests that over-reliance on functional hierarchies can hinder the implementation of key business processes such as customer acquisition and maintenance.
• Mark Logan: Functional hierarchy can hinder innovation, as it creates walls and silos that slow down scaling.
• Brandon M: Innovation needs wiggle room and clashing of different skill sets, which can be encouraged through informal relationships.
• T-shaped skills, hybrid working, and team collaboration. 31:12
• Mark Logan emphasizes the importance of T-shaped skills in a fast-growing startup, where individuals should have a deep specialism and adjacent knowledge to innovate holistically.
• Bethany and Brandon discuss how to enable individuals to gather and make an innovation difference, with Bethany highlighting the need for informal collaboration and Brandon focusing on the importance of encouraging T-shaped skills.
• Brandon M suggests creating hybrid teams with diverse skills to foster innovation and collaboration.
• Mark Logan advocates for embracing the squads and tribes model in organizations to promote ownership and productivity.
• Implementing cross-functional teams and tribes in a business. 36:37
• Mark Logan emphasizes the importance of cross-functional collaboration in product development, citing Skyscanner's success with squads and tribes.
• Mark Logan explains how Skyscanner's product engineering efforts evolved to better serve diverse international markets by creating growth tribes with local engineers, commercial people, and marketing teams.
• This approach led to improved performance in markets like South Korea, with a 300% increase in performance, as the team was able to adapt the product to the local business case and handle code bases more effectively.
• Transforming organizations for success. 40:59
• Mark Logan emphasizes the importance of taking a thoughtful and structured approach to organizational change, rather than simply implementing new processes or structures without proper enablement and support.
• Bethany agrees, highlighting the need for CEOs to be transformational and think about how to make things dramatically better, rather than just focusing on incremental improvement.
• Mark Logan emphasizes the importance of optimizing for agency in organizational change.

This podcast uses the following third-party services for analysis:
Chartable - https://chartable.com/privacy