Management With Alarming Predictability

Everything Breaks

We’re going to play a really simple and really dumb game. I’ll explain the setup and the rules:

  • Two one-person ‘teams.’
  • On a flat, boring surface, you draw two parallel three feet long white lines which are fifty feet apart.
  • Teams choose one home baseline. The other line marks the opposing team’s home base.
  • Team members start by standing completely behind their home base while facing the opposing team.

The goal of this stupid and dumb game is to earn points. A point is earned when a player’s entire body first crosses their home line, then the opposing line, and finally returns to the home line again. First team to 20 points wins.

Like I said, simple and dumb.

You already have questions. Can I interfere with the other players? Who is judging and counting the points? What do I win? Good questions, but I’d argue that with the rule set above you have a minimally viable game. You can start to play the game with little fuss. It’s going to be furious (and lame) sprinting back and forth, but you can play.

Third Time’s a Charm

I’m working on my third rapid growth start-up in a row. This phase in a company’s growth is my jam: the enthusiasm, the ambition, the plethora of blank slates. Very little is defined. Even less is written down. Everyone is fired up. We’re going to figure this out as we go… thank you very much.

Many of my favorite pieces were written in the past decade and are equally based on company-specific observations as well as recurring eerie patterns that keep appearing amongst companies with vastly different cultures, products, and businesses. One such pattern is the The Rule of 3 and 10. As told by former Evernote CEO:

When you go from one person to three people it’s different. When it’s just you, you know what you are doing, and then you have three people, and you have to rethink how you are doing everything. But when there are ten people, it’s all going to change again. And when there are 30 people, it will change again. Same when you reach 100 people.

At every one of those steps everything kind of breaks. Everything. Your communication systems and your payroll and your accounting and customer support. Everything that you put into place needs to change when you put in those three and ten steps.

I can confidently confirm based on my experience that things fall apart as a function of the number of humans with eerie predictability, but how? And why?

Game On

Thought experiment. Add 18 people to the game, nine for each side — Totaling 10 per team. More importantly, we’re not going to give anyone the above rules beforehand. Upon arrival, it’s on you; the newly anointed team captain – to explain the rules, make sure everyone understands them, and to make sure the game is played cleanly and fairly. However, you have just two minutes from start to finish to explain the game before the starting gun fires.

Ok? Ready. Go.

You don’t have to actually play the game to understand the ten versus ten person version of the Simple Dumb Game is going to be a shit show. Remember, our starting white line suggests a heretofore unspecified queuing system for our ten-person team. Basic rules are woefully incomplete on the topic of multi-person starts. Interference, a curiosity with solo player teams, is a nightmare at 20. Finally, you have our two respective teams who are looking at their respective captains who took two whole minutes to explain the rules. The teams wonder, “Why are we playing this stupid game?”

In the one player versus one player version of the game, it’s a simple foot race. Run back and forth, cross the line. Maybe… maybe one of the players who is falling behind realizes that interference is not specified in the rules and is perhaps legal (It is. Also, no referees. Bonus!), so they attempt to slow the other player down as they cross paths. Chances are, it’s a crazy amount of running hither and fro with the winner being the faster runner.

In the ten versus ten version, it’s a disaster. Even the best coach will be challenged by relaying even the simple rules to nine other humans in two minutes. With the woefully and incomplete set of rules in hand, the game starts OK. One player at a time until someone figures out there is no rule governing the number of players that can be on the field and there’s a rush of players from one side before the other teams see the rush and do the same.

Now they’re getting creative. If a team is behind, why not block the narrow three-foot entrance to the opposing team? (Allowed) Why not send players multiple times to get more potential points on the board? (Also allowed) Let’s be clear, the Simple Dumb game wasn’t remotely fun at one versus one, but now it’s utter chaos. A poorly defined and poorly communicated rule set which has not even been tested with humans at ten versus ten scale has created chaos.

And this is just a simple dumb game. What about the rules governing your company? Sure, no one calls them rules but buried within your company culture, and the product is a set of complex and fascinating operating principles. Some are spoken. Many are not. Everyone must discover them, and ten new humans are starting at your company next Monday. With their arrival, what is going to break at your company for the first time?

With Alarming Predictability

The Stupid Dumb game teaches us three principles and they frame my advice:

  1. Humans will greatly benefit from a clear explanation of the rules of the game.
  2. The rules need to evolve in unexpected ways to account for the arrival of more humans.
  3. The only way to effectively learn what is going to break is to keeping playing… and learning,

My advice for your growing company:

“A clear explanation of the rules.” The goal of your on-boarding program is to get the new humans up-to-speed and productive as quickly as possible. Each of my past three start-ups has invested in onboarding programs with the most recent being the most thoughtful. At each start-up, we should have invested five times as much.

The challenge with on-boarding as with most investments in the humans at your company is proving a compelling and measurable return on that investment. Everyone agrees that on-boarding feels like a thing we should invest in, but isn’t the first priority building and selling a product?

It was. It’s not now. When it was two of you working in the garage, no one cares about on-boarding because sans a product there is nothing actually to board. However, you are now a legion of humans, and the product you are building is a business.

Your on-boarding program has three sections. Everyone has questions regarding health benefits and when they get paid, but those answers are quick and straightforward. The topics of substance you must describe are:

Our Vision. What is the ambitious mountain we are climbing? Why are we doing it? And what is going to happen when we get there?
Our Values. On this journey, how do we want to treat ourselves and others? Why did we pick these values? What do these values teach us? What do they look like in practice?
Our Practices. What are the specific proven practices we use on this journey to get things done? How do we build together?1

The content of each section varies wildly by business and the population of humans. Chances are, even if you haven’t written down the content that it’s 80% defined in an amorphous spoken-word existing-in-the-hallway fashion. Chances are, the new humans walking in the door are assuming this work is 100% done and 100% available because they want to know the rules of the game as quickly as possible.

“The rules will need to evolve in unexpected ways” At a start-up, fail fast isn’t good advice, it’s a way of life, and it’s the defining characteristic. It is up to you to make failure a competitive advantage.

Failure is an opportunity to learn. Yes, you should put out the failure fire as quickly as possible, but the moment the fire is out, you need to begin a systematic, efficient, and familiar process of figuring out how the fire started so you can build fire prevention.

The first start-up after Apple was particularly good at this. We used the 5 Whys-type process not just when there was a significant failure in the product, but a substantial failure in any part of the business. Why didn’t this key hire accept? Investigate. Why are new hires not getting their offer letters? Dig in. We took the time to understand the failure deeply and to find the root cause so we could begin to build a proper fix.

The identification of the critical fixes resulting from these failures represents one of your best defenses against future failure, but you need to finish.

“Play, Learn and Repeat” Here’s the deal. Your company probably already has on-boarding. You probably know the name of the human in the building who bangs the table preaching post-mortem processes. Disasters have occurred, and someone ran to the internet for help. They read an article just like this years ago, discovered a compelling argument for on-boarding or postmortems, assigned a DRI2 to the task, and moved on to the next crisis. My question: did they fix the problem?

My third and last piece of advice is the hardest. When things break, you must learn completely from the failure.

I was feeling pretty good about our post-mortem process at a prior start-up. It was engineering focused (not company-wide), but we trained folks in running an efficient post-mortem, we took copious notes, and we religiously logged next actions in our bug tracking system.

After a particularly bad incident, I read the post-mortem write-up, and something read familiar. A quick scan of bug database revealed we’d triggered the same bug that had been discovered by a prior incident. A critical bug logged, but not fixed. Becoming alarmed, I ran the following query: “How many issues identified by a post-mortem have been resolved as fixed?”

14%.

In our fury to fix, we forgot to finish.

Epic failure has the unique attribute that when it occurs, you have everyone’s attention. It is relatively easy to instigate change after an epic failure because everyone is staring at the sky, not blinking, and prepared for it to fall once more. Learning from epic failure isn’t hard. Disciplined learning from all failure requires thoughtful work.

I can’t think of a better inoculation to what ails all rapidly growing companies than building a healthy culture of learning from failure — which means not just identifying the critical fixes, but acting on them. Completely fixing them. You’re thinking I’m talking about bugs in your product, but I am also talking about critical bugs in your company.

Failure As A Competitive Differentiator (Or Don’t Play Dumb Games Twice)

The timing, type, and severity of failures at scale vary by company, team. And culture. With alarming predictability at specific team sizes these failures cluster. The humans see this failure spike, become alarmed, starting worrying to each other, and created a fear feedback loop. This is going to occur no matter what. It’s a cost of running a growing business.

What is this fear based on? Depends on the failure, but it’s likely a combination of:

  • Did leadership see this coming? (Nope.)
  • If they did, why didn’t they prevent it from happening? (Didn’t see it coming. Couldn’t prevent it.)
  • I saw this coming, I raised my hand, and no one did anything. (I wish we listened. I’m sorry.)
  • Is it going to happen again? (Not like this if I have anything to say about it.)
  • Who is in trouble? (No one.)

One of my favorite worry-in-the-middle-of-the-night threads is predicting what is going to break before it’s broken — wasted calories. Everything breaks. The primary way to discover failure is via the increasing entropy of a growing number of humans running around the building – good intentions in hand – breaking things.

Once broken, and with ruthless and calming efficiency, we set to the task of learning. What truly broke here? What is the best set of fixes? Who is accountable for leading those fixes? It won’t completely address the fear, but a culture of learning and acting on those learnings will signal to everyone that we take failure seriously and are eager to learn completely.

Ok? Ready. Go.


  1. For as long as possible, the humans who are building the company with their hands need to be a regularly featured speaker as part of your onboarding programs. 
  2. Directly responsible individual.