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Scaling Up Excellence: Getting to More Without Settling for Less

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Scaling Up Excellence: Getting to More Without Settling for Less

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Highlights & Notes

This book shows what it takes to build and uncover pockets of exemplary performance, spread those splendid deeds, and as an organization grows bigger and older—rather than slipping toward mediocrity or worse—recharge it with better ways of doing the work at hand.

Scaling well hinges on making the right trade-offs between mandating that new people and places become perfect clones of some original model (a “Catholic” approach) versus encouraging local variation, experimentation, and customization (a “Buddhist” approach).

Skilled leaders found ways to stoke emotions that fueled tangible and desirable actions.

organizations that spread and sustain excellence are infused with a “relentless restlessness”—that often uncomfortable urge for constant innovation, driven by the nagging feeling that things are never quite good enough.

It means constantly seeking and implementing better ways of thinking and acting across old and new corners of the system.

Organizations that scale well are filled with people who talk and act as if they are in the middle of a manageable mess.

The fourth big lesson is that scaling starts and ends with individuals—success depends on the will and skill of people at every level of an organization.

Many organizations are born after some energetic individual discovers that something is broken and decides to fix it.

Start with yourself, where you are right now, and with what you have and can get right now.” That advice doesn’t just apply to kicking off the scaling process; it holds every day and every step of the way.

Scaling requires grinding it out, and pressing each person, team, group, division, or organization to make one small change after another in what they believe, feel, or do.

When big organizations scale well, they focus on “moving a thousand people forward a foot at a time, rather than moving one person forward by a thousand feet.”

As they expand, their goal isn’t just to maintain the status quo. The team works day after day to make their system better. They never leave well enough alone.

Scaling unfolds with less friction and more consistency when the people propelling it agree on what is right and wrong—and on what to pay attention to and what to ignore. Effective scaling depends on believing and living a shared mindset throughout your group, division, or organization.

Once the company got too big for Zuckerberg to personally influence every employee, it took to more systematic methods, notably “Bootcamp.” Facebook engineers and other product developers are hired after rounds of grueling interviews to assess their technical skills and cultural fit. But they are not placed in a specific job until six weeks after coming aboard. Management has a hunch about which role each new hire will play. Yet the final decision is not made until the end of “Bootcamp,” which is designed and led almost entirely by engineers—not the HR staff.

That is the Facebook mindset—if you want people to move fast and fix things, they’d better feel safe to break some stuff along the way.

When someone at the Directors’ College asked Campbell about the most crucial skill for a senior executive, he said it was the rare ability (which Jobs had in spades) to make sure that the short-term stuff gets done and done well, while simultaneously never losing sight of the big picture.

“How will this work when we are ten times or a hundred times bigger?” They thought, “Let’s not decide based on what is best now, let’s decide based on what will be best in two or three years.”

Accountability means that an organization is packed with people who embody and protect excellence (even when they are tired, overburdened, and distracted), who work vigorously to spread it to others, and who spot, help, critique, and (when necessary) push aside colleagues who fail to live and spread it. The trick—and it is a difficult trick—is to design a system where this tug of responsibility is constant, strong, and embraced by everyone, and where slackers, energy suckers, and selfish soloists have no place to hide.

  • @sergeiw @gabrielhdm

but the goal is always the same—to bake-in that constant pressure to do the right thing.

“What is our goal? Is it more like Catholicism, where the aim is to replicate preordained design beliefs and practices? Or is it more like Buddhism, where an underlying mindset guides why people do certain things—but the specifics of what they do can vary wildly from person to person and place to place?”

Too often, we humans convince ourselves that proven rules or technologies don’t apply to us or the apparently unique place or situation we are in, when, in fact, we are fooling ourselves.

Kurt Lewin said, “If you want truly to understand something, try to change it.”

Local ownership also creates commitment because the adjustments that locals decide to make will help determine success or failure; such responsibility—and the justified credit and blame that often go with it—fuel the feeling that a scaling effort is “mine” or “ours.”

Tilting toward Buddhism is especially useful when you have the right mindset in your organization or project but don’t yet have a complete template that has worked elsewhere. If there isn’t a proven model to start with, you need to experiment with different solutions to figure out what works.

The lesson from the Big Mac story is that innovations that ought to be scaled won’t happen everywhere but can happen anywhere. Sure, there may be conflict and uncertainty. There always is, even in the best organizations. But McDonald’s was Buddhist enough to tolerate bottom-up innovation. And when executives discovered that the Big Mac worked, the company took a sharp turn toward Catholicism to ensure that every Big Mac would look and taste the same.

Take the choice between going it alone versus working with partners. A partner can provide you with resources, expertise, and the ability to reach more people and establish more locations, which allows you to create a bigger footprint (and do it faster). But maintaining the purity of some original model is more difficult when your partner has a different history or different ideas, tastes, skills, and information than you have—as they always do. Partnerships generate Buddhist pressures.

To spread your footprint faster and further, it is sometimes worth sacrificing a bit—or a lot—of short-term excellence. Dips in excellence are temporary and predictable effects of the learning curve. As a doctor at the Stanford Hospital explained to Rao, when the hospital spreads practices from an exemplary unit to others (such as methods for reducing infection rates), some “voltage loss” is inevitable at first.

In other words, there are times when tilting—or lurching—away from Catholicism doesn’t produce excellence but is still the best path forward because, as Rod Park would have said, “snowballs are better than no balls.”

saving money was encouraged, but skimping on staff, training, equipment, and other expenses that would undermine the quality or schedule was unacceptable.

The key to using the guardrail strategy is specifying as few constraints as you possibly can—picking those precious few that matter most and pack the biggest wallop, and then leaving people to steer between and around them as they see fit.

The question of whether beliefs are largely the causes or consequences of behavior has key implications for scaling up change. Many studies show, as Emerson would have it, that first altering people’s beliefs via persuasive and emotionally charged slogans, stories, and arguments induces behavior change.

So, as a practical matter, you can stoke the scaling engine by targeting beliefs, behavior, or both at once. The key is creating and fueling a virtuous circle.

When it comes to getting people to rally behind a hot cause, the key is creating experiences that generate “communities of feeling.”

“What I hear I forget, what I see I remember, and what I do I understand.”

Take a page from the Watermelon Offensive and JetBlue: stoke the scaling engine by connecting beliefs and behaviors. Remember, Facebook’s sacred belief: “Move fast and break things.” As Chris Cox explained, veterans talk with newcomers about it, but their commitment to and understanding of this mindset is cemented only after they start living it—after a new engineer has made a change to the site during their first week on the job, and then another ten or so more, and shows colleagues, friends, and family, “Look, I did that.”

“Whenever one takes a stand that is visible to others, there arises a drive to maintain that stand in order to look like a consistent person.” Public commitments foster especially strong accountability pressures in long-term relationships. As others see you act in a certain way, you become surrounded by witnesses who impose pressure on you to remain true to your new behavior.

Rituals can serve as on-ramps for creating or reinforcing a mindset—especially when they are performed in front of others, done by all, and repeated over and over. Such public displays of commitment are difficult to revoke or reverse, and as people perform them over and over they become ingrained habits.

A big pile of studies shows that putting forth effort to do something, doing it in front of others, and doing it voluntarily add up to a potent recipe for changing hearts and minds—and that is exactly what this new ritual accomplished.

rewarding merit rather than seniority, excellence rather than mediocrity, and especially leaders who were drawn to big and bold objectives and didn’t mind taking risks.

Four hallmarks of “change resisters” emerged from this research: 1. “Routine seekers” who agree with statements like “I would rather be bored than surprised.” 2. People who have strong negative emotional reactions to change, those who become “tense,” “stressed,” and “uncomfortable” at the prospect of doing or dealing with new challenges and chores. 3. Short-term thinkers, those who agree with statements like “When someone presses me to change something, I tend to resist even if I think the change may ultimately benefit me.” 4. People who are “prone to cognitive rigidity,” who agree that “once I come to a conclusion, I am not likely to change my mind.”

scaling entails subjecting people to an onslaught of unfamiliar, difficult, and upsetting changes and chores.

As organizations expand and mature, rather than rationing or subtracting load, leaders and teams often pile on so many metrics, procedures, and chores that people lose the capacity and willpower to do the right things.

As Office Depot discovered, the more tasks that people do, the worse they tend to perform each one.

In short, cognitive load is another reason that scaling is the Problem of More. It can tax human minds and organizations beyond what they can bear. When that happens, people ignore their best intentions, work on the wrong tasks, shift focus too often, and perform less well at everything they attempt. Scaling provides a potential antidote: adding people to share the load.

As Intuit CEO Brad Smith says, “When it comes to building a culture of innovation, less is often best.” Much as teams do at online retailing giant Amazon, Intuit lives this philosophy with the Two-Pizza Rule: “Our development teams can be no larger than the number of people who can be fed by two pizzas,” which helps members “stay nimble and make decisions quickly.”

Related research shows that as organizations grow and age, “maintenance,” “coordination,” and “grooming” costs accelerate as decision makers add layers, form teams and departments, and pile on rules and processes. Administrators are often added at a faster rate than those who perform the organization’s main work.

As organizations and programs expand and age, they often propagate ever more convoluted procedures and processes. Ballooning brigades of administrators must justify their existence. So they busy themselves by writing more rules and requiring colleagues to jump through more hoops—stealing bandwidth, effort, and willpower from more essential work. In the worst cases, the result is “BDC” or “Big Dumb Company” disease, as venture capitalist John Greathouse calls it.

Geoffrey West, a physicist at the Santa Fe Institute, asserts that this penchant for organizations to devote more and more resources to the care and feeding of the bureaucracy and less and less to the work itself spells their ultimate doom.

To us, this means that the key challenges are how to add rules, tools, and people without creating bloated and overbearing bureaucracies, filled with overloaded and irresponsible people.

Well-crafted rules and processes create predictability, reduce conflict, facilitate coordination, and reduce cognitive load because people (often with help from computers) are armed with proven responses to routine situations—rather than having to reinvent the wheel each time. It is impossible to grow an organization or spread excellence without such tried-and-true controls, constraints, and building blocks.

Leaders and teams that spread excellence act the same way, ruthlessly spotting and removing crummy or useless rules, tools, and fools that clog up the works and cloud people’s minds.

achieving such “profound simplicity” often requires slogging through some mighty messy complexity along the way.

We have a rule of thumb for practicing subtraction: if you aren’t upsetting people, you aren’t pushing hard enough. Remember how upset those Apple engineers got when the technical writer wanted to remove the second button on that mouse? That was a promising sign. Subtraction often entails removing the old and familiar and replacing it with something new and strange (or nothing at all). Subtraction is jarring because we humans have positive emotional reactions to the familiar and negative reactions to the unfamiliar.

load busters: they turn attention to what matters most when mental demands are high, priorities clash, and key information is easy to lose or overlook.

Even when coordination is less daunting, every team and organization depends on people with enough general knowledge to grasp how the system fits together and enough particular knowledge about each part to do specific tasks well.

Organizations use varied antidotes. Money is one: paying people for the overall success of an effort, not just for individual or local performance, can motivate individuals and teams to cooperate, coordinate, and help each other learn and do better work. Incentives help explain why people in start-ups such as Pulse News often cooperate so well: every employee gets stock, so all have a stake in the company’s overall success.

If you are forming a new team, or fixing an old one, try to bring in at least two or three people who have worked together effectively before.

Carnegie Mellon’s Anita Williams Woolley and her colleagues studied 669 people in groups that had two to five members. Groups with higher percentages of women had greater “collective intelligence,” performing better on cognitively demanding tasks, from “visual puzzles to negotiations, brainstorming, games and complex rule-based design assignments.”

British Prime Minister Winston Churchill praised naps: “Nature had not intended mankind to work from eight in the morning until midnight without that refreshment of blessed oblivion which, even if it only lasts twenty minutes, is sufficient to renew all the vital forces.” Much research supports Churchill’s claim: A fifteen- to sixty-minute nap bolsters alertness, error detection, and mood.

If you want to make good decisions as the day wears on, watch for signs of fatigue. Even seemingly trivial levels damage performance. Build in ways for yourself and others to take breaks, whether it’s getting a bite to eat or taking a few minutes to stretch your legs. It sounds easy to implement. Yet too many hard-charging leaders and busy teams don’t do it.

running an organization as close to maximum capacity as possible for as long as possible is a recipe for a scaling disaster. This is true, they argued, despite all those experts who are enamored with “100 percent utilization of resources.” When you do that, there is no slack. People are already overwhelmed and making questionable judgments. So the smallest surprise or setback can produce mayhem. Here’s how Fry framed the problem: everyone knows that this is a bad way to treat a machine—they would never run a computer at 100 percent of capacity day after day because they know it will break. Why shouldn’t organizations, large or small, apply the same logic to their people and teams?

is that the capacity for effective scaling depends on both bringing in the right talent (people with the right training and skills) and having people who feel compelled to act in the organization’s best interests (“accountability”) and who press one another to act that way too.

When employees put their needs ahead of clients, colleagues, and the company—whether this results from personality, bad role models, or bad incentives—excellence suffers because they feel no obligation to mentor newcomers or help colleagues do great work.

Annual compensation reviews are treated as rehiring decisions. Managers ask: What would the person get elsewhere? Is this person so good that he or she would be difficult or impossible to replace? What would we pay for his or her replacement? What would we pay to keep the person?

Employees with impressive skill and motivation are attracted by the pay. Then they stay—and work like dogs—because of the autonomy, pride in their work, and lack of friction.

A tug of mutual obligation is created because being “owners” entitles and encourages employees to push themselves, peers, bosses, subordinates, suppliers, and sometimes clients to support exceptional performance.

many a chance to rebuild their lives. Netflix may seem more cutthroat than Tamago-Ya. After all, you are fired rapidly at Netflix for merely adequate performance. But you are hired to be a star, to be the best of the best, and you know that walking in the door. You also have great latitude in how you do your work; bosses and peers don’t monitor your every move. The company is organized for extremely talented employees who give their all. Netflix makes sure that every employee understands the bargain: you are given much and expected to give back much in return—or you are sent packing.

The leaders and consultants that implemented self-managing teams in this plant didn’t fully realize—at first—how sharply effort, quality, and productivity would increase because they had created small worlds where every worker felt obligated to every other. In other words, this change generated that powerful—and sometimes distressing—feeling that “I own the place and the place owns me.”

Yes, having money to spend on talent can be helpful. But beware of spending money as a substitute for doing the deep thinking and demanding work required to instill, spread, and sustain excellence.

Financial rewards are most effective when they dovetail with hiring and firing practices. Hiring the right people is crucial, as we’ve just seen at Bridge. But so is moving out the bad hires.

‘During the interview, I look them in the eye, and tell them, “If I discover that you are an asshole, I am going to fire you.” ’

The Danish consulting firm Specialisterne (the Specialists) is an extreme case: they’ve turned high-functioning autism into an advantage. Thorkil Sonne was inspired to start the firm after discovering that his son, who has autism, was adept at memory tasks and had an intense focus that helped him to flawlessly perform repetitive and tedious chores. Sonne realized that people like his son could excel at tasks such as data entry or software testing, even if their communication skills were weak.

Sonne describes people with disabilities as being prewired to master some tasks that the rest of us find difficult.

Similarly, some apparent weaknesses of autistic people turn out to be strengths for repetitive tasks that require extreme concentration.

Ignorance, mediocrity, and mistakes run rampant when organizations fail to link the right people to the right information at the right time.

As CALL’s success suggests, scaling hinges on discovering (or creating) pockets of excellence and connecting the people who have it, and their ideas and expertise, to others.

Researchers have portrayed scaling as a three-stage process: excellence, efficiency, and expansion.

“To spread excellence, you need to have some excellence to spread.”

I’ve heard our strategy described as spreading peanut butter across the myriad opportunities that continue to evolve in the online world. The result: a thin layer of investment spread across everything we do and thus we focus on nothing in particular. I hate peanut butter. We all should.

SPaM succeeded because they focused on developing and transferring real excellence instead of spreading a thin coat of supply chain peanut butter across HP.

Most leaders who aim to spread a mindset don’t have a dream team like Darwin’s, but any scaling effort will move faster and farther if you start with a diverse group of evangelists.

Even if he didn’t know their names, Halsted had a sharp eye for talent and didn’t hesitate to remove interns and residents who lacked the necessary drive, skill, and temperament.

Over 80 percent of women who own businesses in the United States were Girl Scouts, as were nearly 60 percent of current female U.S. congressional representatives and 70 percent of female senators. Almost every female U.S. astronaut who has flown in space was a Girl Scout, as were all three U.S. female secretaries of state, and all five female governors of U.S. states in 2013.

Another, especially controversial change cranked up pressure to build stronger connections: Mayer forbade employees to work at home. There were many outcries from employees and pundits. But Mayer insisted on making the move because Yahoo! was plagued with weak connections among employees. When pockets of excellence did exist, that excellence spread haltingly if at all. Many Yahoo! employees felt alienated from the company and each other.

Reeves and other “gamification” advocates assert that workplaces would be more fun and effective if the principles for designing computer games were applied to designing organizations. They also argue that computer games ought to be designed and woven into the fabric of work to attract and motivate employees and to enable organizations to operate more effectively.

“If our own employees weren’t convinced that texting was something useful, there was little likelihood we were going to convince customers of its value.”

you can’t get a promotion to the next level unless you “grow your own replacement.”

The upshot? When it comes to one-on-one influence, focus on supporters and fence-sitters. Try to pair the “persuaders” on your scaling team with powerful people who already trust and admire them. Beware of pairing up with resisters. Even if they are good friends and those resisters otherwise admire your skills and judgment, your efforts may provoke them to harden their positions and may damage your relationship.

The key, as experiences at both Kaiser Permanente and P&G show, is that successful scaling depends on never forgetting that you are fighting a ground war rather than an air war. The few must use their grit and skill to teach and convert others, who, in turn, start the domino chain of goodness in motion.

When a pocket of people have got something good, but no path connects them and their knowledge to others who need it, excellence can’t spread.

When people share the same daily, weekly, monthly, and seasonal rhythms, connections among them form faster and stay stronger.

During daily scrums, each team member answers three questions: (1) What did you do yesterday? (2) What will you do today? and (3) Are there any impediments in your way?

“It is not the meetings that matter; it is the rhythm that matters.”

In a healthy business, you will see subtle but frequent exchanges such as smiles, winks, and quick conversations that suggest strong human bonds and a constant flow of information.

“confirmation bias,” the tendency to trust, remember, and act only on information that supports what you already believe. Confirmation bias is fueled when they reward subordinates and peers who flatter them, skew the data to confirm their views, screen out messengers and messages that deliver news they don’t want to hear—and ridicule and punish people who present them with uncomfortable truths they don’t want to accept.

Destructive behaviors of just about every stripe—selfishness, nastiness, anxiety, laziness, dishonesty, for example—pack a bigger wallop than constructive behaviors. That may seem unfair. But leaders and teams in organizations that scale effectively realize that, to clear the way for spreading and sustaining something good, they’ve got to take out the bad and keep it out.

Bad apples also undermined performance. Felps found that if just one deadbeat or asshole joins a small group, performance drops by 30 percent to 40 percent. Destructive members appear to pack such a punch because bad emotions and actions are so much more contagious than good. Teammates also spend so much time thinking about and dealing with the bad apple that precious time and emotional energy are diverted from the work at hand.

The lesson is, to stop destructive behavior in organizations, you’ve got to remove any doubt among witnesses that the words and deeds in question are, indeed, very bad.

In short, three kinds of moves can reverse bystander inaction in organizations, and elsewhere. First, make sure that each person feels personally obligated to reverse or repair problems, no matter what others around him or her do or don’t do. Second, make sure that everyone knows and agrees on what bad behavior looks like. Err on the side of being explicit, loud, and repetitive. Don’t assume that what you think is bad is the same as what they think is bad. Third, make sure that bad behavior doesn’t become “normalized,” collectively seen as a necessary evil, inevitable and unstoppable, expected and accepted, or even good naughty fun.

The broken windows theory suggests that allowing even a little bit of bad to occur or persist is a mistake because it signals that no one is watching, no one cares, and no one will stop people from doing even worse things.

The experiences in New York and studies such as Cialdini’s imply that clearing the way for excellence in organizations depends on being a stickler about stamping out destructive behavior. If you look the other way or decide that some small violation isn’t worth dealing with, things can quickly degenerate.

when it comes to scaling up excellence, the best path is rarely the easiest.

CEB’s research shows that customer loyalty has more to do with how well companies keep their “basic, even plain vanilla promises” than with how well they dazzle customers.

Thus an effective way to eliminate the negative is to recruit the most admired and connected people in your organization, teach them what “bad” looks like, and encourage them to stop being perpetrators.

The executive didn’t have much luck changing the norm as the lone advocate. But once he recruited those two influential members—the local cool kids—to stop themselves and others from being bad, the team’s norms changed rapidly.

“There is a charm about the forbidden that makes it unspeakably desirable.”

The first dangerous feeling is fear of taking responsibility, especially the sense that it is safer to do nothing, or something bad, than the right thing.

Silence is one of the most reliable signs that people are afraid to take personal responsibility and that the learning and self-criticism that fuel excellence aren’t happening.

The key to curing helplessness in both animals and humans is to convince them that, despite what happened in the past, there are steps they can take now to make things better.

When someone can find some way to direct a team’s or an organization’s attention toward the people affected by what it does (and away from members’ own needs and wants), they will take greater responsibility for doing the right thing.

Pretending that a success or failure has already occurred—and looking back and inventing the details of why it happened—seems almost absurdly simple. Yet renowned scholars including Kahneman, Klein, and Karl Weick supply compelling logic and evidence that this approach generates better decisions, predictions, and plans. Their work suggests several reasons why the premortem approach helps inoculate organizations against the scaling “clusterfugs” that we discussed in chapter 1—where illusion, impatience, and incompetence taint a scaling team, in turn making life hell for everyone involved.

This concern is reinforced by “the Startup Genome Project,” in which Max Marmer, Bjoern Herrmann, and colleagues surveyed 3,200 high-growth start-ups. They found that 74 percent of these young organizations suffered from premature scaling, which Marmer and Herrmann conclude is the main reason that so many start-ups grow too slowly or fail. Companies that stall or disband hire about 50 percent more employees in early growth stages compared to their more successful counterparts—which don’t add employees until needed. Hiring too many people too soon burns through cash, creates unnecessary administrative burdens, undermines innovation, and causes companies to focus on landing customers before they have anything worthwhile to sell them.

Scaling comes down to making sure the machine is ready to handle the speed before hitting the accelerator.”

This means that instead of asking, “What will we do tomorrow?” you ask, “If we do have a successful day tomorrow, what will we have done?” and framing the next week, month, year, and so on in a similar fashion.

Much like corporate kick-offs where follow-up is lame or nonexistent, training has little effect when new behaviors and beliefs are taught but no steps are taken to enable people and teams to live those lessons.

On first blush, it may seem that imagination will flourish when “anything goes.” Yet virtually all creative feats are accomplished by people, teams, and organizations that face challenging and immovable constraints.

It isn’t a question of whether there will be constraints; it is a question of whether people have the will and skill to find ways around the constraints and transform them into virtues. Research on creativity and constraint demonstrates that, when options are limited, people generate more, rather than less, varied solutions—apparently because their attention is less scattered.

Fry and Greene emphasize that, although more roles and processes are needed as organizations and projects expand, skilled leaders wield their power to eliminate needless friction and complexity—not burden employees with “rules, tools, and fools” that make it tougher to do their jobs and waste money and talent.

Chapter 6 shows that, although most people prefer to be around others who are similar to them, new mindsets, skills, and practices travel faster and farther when team members have varied backgrounds, skills, and viewpoints.

Abraham added that the goal should be to hire people whom you respect and who bring new thinking to the organization; whether you like them should be secondary. Teams need to work together regardless of whether they are “friends.” Diversity of style, thought, and culture can sometimes generate friction. But if it is productive friction, and if your team frames it that way, it can help build resilience “almost like allergy shots for your organization.” Abraham emphasizes that this approach works best if “you are not too proud to empower them to try out ideas that are different from yours, or to change your mind when they prove you wrong.”

“fight as if you are right, and listen as if you are wrong.”

In contrast, excellence spreads and persists when accountability pressures permeate a workplace—when that feeling of ownership for problems and solutions pervades each handoff, each meeting, and each interaction with the people whom an organization serves.

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