On March 1st, we welcomed a couple of new employees to the company, which make 38 people in total. We grew to this number just in 2 years.
In my experience, one of the first things you as CEO need to do before a number of employees hits 30 is to change reporting lines in your organization. Thanks to Slack, Hipchat and other modern communication tools. It is now possible for a single person to handle so many 1-on-1 conversations with people in an organization today.
However, you will run into a serious trouble later on if you continue to let employees report to you directly. For employees it’s always a preferred way of communication because they don’t have to deal with intermediate people in organization and they can get a straight answer from CEO whether the answer is yes or no.
A problem gets much worse once that habit becomes a part of company culture. I’ve seen few CEOs who struggled with this communication overload problem because their startup stayed in 10-20 people stage for too long, which resulted in everyone at the company getting so used to report to CEO directly. It will require great effort to change the reporting lines in such organization since it’s equivalent to changing a company culture.
So here is a list of action items I would recommended before that happens.
1. Remove yourself from unnecessary Slack channels
There is a tendency for employees to bring you into every new Slack channel they create. Remove yourself immediately if you find it irrelevant from the perspective of company management.
Product update or project specific channels are the usual suspects. Do not feel guilty about removing yourself from these newly created channels. Do it fast before they assume you are in the channel.
2. Stop attending product/service update meeting
If you are involved with every product/service update meeting, stop attending it. Instead, get updates from CTO, VP of Product or a person who is in charge of product/service. Again, employees tend to bring you into these meetings without thinking much about the value of time given to CEO. Say no when you get such an invitation from Google calendar.
In my opinion, there should be clear distinction between management and execution even in startup at early stage. You as CEO and other C-level people are responsible for management. Employees are responsible for execution. Product/service updates are considered as execution. Attend these meetings if and only if they are absolutely necessary.
3. Narrow down your reporting lines
The ideal scenario is that you get product/service update from CTO, sales update from CFO, and everything else from COO. These 3 reporting lines should be enough for you. CEO has additional reporting lines that no one else at the company has. These are the reporting lines to stakeholders, which include investors and key partner companies.
The information goes the other way around through these additional reporting lines. It’s CEO giving updates to the stakeholders, and it requires careful and thoughtful preparation by compiling the updates you get from CTO, CFO and COO.
4. Be clear about your communication policy and state it company-wide
Once you decide to change your reporting lines, then share your communication policy with all employees at the company. This helps them understand why you are doing it. Again, the time given to CEO is one of the most valuable assets within the company and everyone should understand it.
Successful startups are organized in such a way where CEO can maximize his/her time for the things that only CEO can handle. Startups grow slower or sometimes fail because CEO is always busy with the things that someone else can handle.
Hope above list helps a startup CEO do the right thing. I know my suggestions are a bit extreme to some extent, but running a company in resource constrained environment requires a high-level discipline. Without it, a company cannot grow beyond 30, 50, and 100 people. It’s up to CEO to make the call as soon as he/she can.