This blog was written by Michael Gladstone, Principal at Atlas Venture, as part of the “From the Trenches” feature of LifeSciVC.
I had an interesting discussion with a veteran of a rapidly growing biotech. He’d been at his company at the beginning, “when the lab was across the street from a crackhouse,” as he put it, and he’s there now. The lab/offices today are far more expansive and expensive, and all of the best crackhouses are miles away.
The discussion was a familiar one about how (or if) a growing, scaling organization can retain/regain the ingenuity of its gritty early days as a small, eager new company.
Where does ingenuity come from?
I’ll briefly re-introduce some of the critical components of this topic, and then focus on one where I can hopefully say something new (or at least interesting).
- Are employees financially incentivized to strive to actualize the company’s goals? Start-up equity is crucial but has been covered well.
- Do they have to succeed? Genuinely lacking a safety net is tremendously hard to “fake” (despite the frequent efforts of large organizations to mimic this). Again, this is ultra-important but covered well elsewhere.
- Do employees have time and encouragement to pursue new ideas? Or are they fully allocated to actualizing the bulleted “2015 Corporate Goals” presented to near-term-focused public investors?
- How likely are “creative accidents”? Do folks in different groups know, trust, and like each other? Might a pharmacologist and a physical chemist converge on a crazy new idea requiring inputs from both areas of expertise?
- Okay, so some folks have a new idea and are sufficiently motivated to pursue it. Can they get management to buy in? And then can they drive its actualization (efficiently) within the organization? This is where I’ll focus.
Knowing when and how to “productively rock the boat” requires good judgment. And your colleagues must trust your judgment sufficiently to indulge your ideas. Hence, we seek experienced managers, because as Vicki Sato sagely noted, we “use experience as a surrogate for judgment.”
But just as good judgment is the result of experience, experience is the result of bad judgment (that was Mark Twain, not Sato). If we don’t train people to think like deciders and give them opportunities to drive decisions and gain their colleagues’ trust, the first choices they’ll shy away from are ones that risk failure or entropy. But this is where innovation usually comes from. This is the company’s “creative conscience,” the voice that whispers (or screams), “let’s maybe do it another way.”
You learn more by being in charge of something
In many venture-backed companies, almost everyone makes decisions, even if they are small ones or fairly well-supervised: how to run a pharmacology model, prioritization of a technician’s time, what data to include in a business development presentation, and so on. This is by necessity; these companies are too small and their timelines too urgent to excessively funnel decisions to an oligarchic group of deciders or to consensus-driven, multi-round committee discussions. This makes it much easier to hear, receive, and heed the creative conscience.
Even holding aside the operational benefits of fluid decision-making, granting each employee a degree of executive capacity and experience is how to prepare them to advocate for and actualize innovation of any flavor. Making smaller decisions is the best practice and training for making larger ones.
Company growth comes with additional layers of management and decision-making controls. Some degree of this is necessary, but it risks atrophying the broader group’s executive capacity. If a medchemist grows accustomed to needing his or her superior’s approval to move 1.5 synthesis FTEs to a long-shot scaffold, will that medchemist be as ready to pound the table and advocate for even more radical boat-rocking, like starting (or killing) a new program at the company? I hope so, but I doubt it. Add to this that it takes a lot more force to change the direction of a larger boat. Inertia becomes harder to overcome, and at exactly the point where it’s so crucial to question the status quo.
If decision-making is either too concentrated (the oligarchic decider group) or too dispersed (large group[s]’s consensus), performance suffers. And when employees don’t feel empowered or trusted to make choices, innovation is one of the first casualties. The company’s creative conscience is wounded; its voice is either silenced or harder to hear and heed.
I talk to former employees (or those getting ready to flee) from larger organizations on a daily basis, and I’m consistently surprised at how little autonomy has been granted to so many talented people. And so often it’s primarily the promise of project ownership and the trust of their colleagues to take risks that draws them to a small company, even more than the financial upside of company equity. They want to feel that their decision-making is trusted, valued, and considered.
And the day came when the risk to remain tight in a bud was more painful than the risk it took to blossom
So, the simple question (surely without a simple answer) is what can companies do to create a structure and culture that empowers employees for productive boat-rocking?
- Provide everyone an opportunity to make or advocate directly and specifically for pivotal decisions: Good managers don’t just review an employee’s contribution (research, analysis, etc.); they also push the employee each time to propose conclusions and next steps. It really takes an active effort to shift from telling people, “Thanks. OK, here’s what we do next” to asking someone “So, what exactly do you think we should do next?” and then working to optimize their suggestions. It’s worth it though, because that’s the best way to escape subconscious top-down reinforcement of the status quo, and the best way to build bidirectional trust between employees.
- Provide everyone opportunities to present their work in meaningful settings, both internal and external. Allowing folks at all levels to present their work is a phenomenal way to increase each team member’s sense of ownership and impact. It is also excellent practice for communicating data, conclusions, and recommendations. Ask (hard) questions, too – discussing and defending our work and ideas strengthens both the ideas and the individuals. This might occasionally be painful, but it pays dividends on many fronts.
- Encourage informal mentorship, including across functional groups/specialties. The value of mentorship has been covered in great depth elsewhere, but I can’t overstate its importance. It’s crucial for helping employees at all levels develop professionally and for building trust vertically and horizontally within the company. This trust allows mentors to serve as sounding boards for refining new ideas and elevating them within the organization. Informal, non-“mandatory” mentorship is best (far preferable to heavy-handed assignment of mentor-mentee pairs). I’ve improved many underbaked proposals (and simply killed many of my terrible ideas) because I’ve been fortunate enough to have experienced, receptive mentors who will hear me out with open minds.
None of these, of course, are simplistic or binary propositions. Improving the extent of their implementation (especially at larger companies) requires thoughtful execution. But you can start tomorrow by asking some junior scientists to share their latest progress and asking them what they really think could move things faster or in a better direction. You might disagree with some of their proposals, but there’s far more downside in not asking for it and not considering it.
Taking steps to better empower employees should be a priority for ensuring committees, consensus, and the chain-of-command don’t drown out creative ideas and stunt your team’s development. And that problem only compounds itself if employees then stagnate or move elsewhere (Atlas is always happy to chat!) in pursuit of this autonomy, ownership, and trust.