Management and Real-Time Strategy

Once or twice a week, I drop this legendary gif into a slack chat to make a point about latency. Usually when talking about UX, network services, or feedback cycle time in people systems. pic.twitter.com/hcnPj5bkhk

— Tobi Lutke (@tobi) August 30, 2021

Managing a startup organization can sometimes feel like you're playing a real-time strategy game (RTS) with 2500ms latency. Every decision takes a day, or a week, or even months for functional units within the organization to acknowledge and execute. As your tech startup scales in head count and as markets evolve, your organization may start to show signs of strategic dissonance.

There's a concept in RTS called APM (actions per minute). Most professional Starcraft players can sustain 300 apm throughout the game and during intense battles can burst up to 500 apm. To put this into perspective, beginners usually sustain at 50 apm. In real-time strategy, the ability to make quick decisions based on game state and effectively achieve results can decide whether you win or lose.

If we relate the concept to a typical Series A technology startup, it could look like this:

The most important part of this diagram are the lightning bolts. These lightning bolts represent lines of communication that put the organization at risk of increased latency. When decisions are made by executive leadership, these orders need to be relayed down through several layers of the organization. It's not as simple as blasting an email or Slack @everyone message and have everyone acknowledge it. 

In between the layers, miscommunication can happen: precision and speed. In order to manage precision of your lines of communication, ensure managers  In order to manage speed, managers need to have frequent 1on1s (weekly) with their direct reports.

From a tactical standpoint, 1on1s with direct reports are generally 80% them surfacing any critical issues with the organization; however, that 20% is used by the manager to reinforce what are the new decisions, why these decision are being made now, how their contributions impact the company's OKRs. Lastly, great managers always find a way to reinforce why it's exciting to be working at the organization.

Depending on the industry the startup is in, competition can be fierce, talent can be limited, markets can change quickly, and opportunities can emerge at a moments notice. These are called Strategic Inflection Points (SIPs). Hard times will inevitably happen to you and your team. In a leadership position, it is absolutely critical that you are able to identify when there are shifts in the market and start making strategic decisions. When your strategy changes, your organization needs to be able acknowledge and execute quickly by monitoring and reinforcing the lines of communication between different teams.

Training Games

At the height of our growth in the Battlefy engineering team, we started practicing different ways to positively reinforce open communication (core value). Open communication meant being frequent at high quality communication. In the military, communication is absolutely critical; however, it is not just any communication -- it's really about distilling down the most critical piece of information to relay to your team so decisions can be made to stay on course or adapt.

In daily engineering standups, we practiced the following

• stating what the blockers are and what they need from the team
• what they will commit to by end of day
• why they're working on it 

At the end of the round table, we would randomly choose a person on the team and ask them to repeat what another person's status update was. Not only was it a forcing function to pay attention and ensure that your team actually understood what your status update was (so a teammate could maneuver on your behalf), but we always get a laugh out of it when someone wasn't able to answer the question.

But why? Well, we wanted to positively reinforce one of our core values (open communications) and make standups more engaging.

At Y Combinator (W16), we did this exercise in group office hours. The reason why we did this exercise was to prepare founders for demo day. Ultimately, there will be hundreds of teams doing demo day and you have to get used to trying to make your company more memorable (this include investors!). Incidentally, it was always super intimidating to be in group office hours because you would have amazing founders who really go above and beyond in their updates (eg/ "this week we closed a customer for a 200k contract") and then I'd look back at my co-founders with a surprised facial expression (and of course, they'd look back in shock). My imposter syndrome felt like rising waters.

Creating a sense of urgency to perform by creating a group environment is both exciting and scary but super effective. After the first group office hours, the following week everyone's' status updates were super memorable.  

For remote teams wanting to make standups more engaging, try it out! You'll be surprised and you can even keep score! 

Be great,
Jaime Bueza

The Spiral

Ben Horowitz writes in his book, The Hard Thing About Hard Things, about "the spiral":

Things always go wrong

There has never been a company in the history of the world that had a monotonically increasing stock price. In bad companies, when the economics disappear, so do the employees. In technology companies, when the employees disappear, the spiral begins: the company declines in value, the best employees leave, the company declines in value, the best employees leave. Spirals are extremely difficult to reverse. 

- Ben Horowitz, The Hard Thing About Hard Things

So how does a CEO get out of the spiral? Here's a few things I would think about

• Investigation
• Identify whether your company is actually in a death spiral: high attrition. It's important to not be in denial about this. Be objective about the state of your business and react accordingly.
• Identify friction in how the makers of the organization (engineers, designers) are able to contribute to the product. If you find an engineer waiting on a decision, you'll soon realize how much more delayed the feature will become. Every decision delayed causes more delays down the road. The goal here is to identify major inefficiencies within your organization.
• Identify initiatives that do not have an impact on your primary objectives of being default alive (profitable). Communicate and shut down those extra initiatives to focus on hitting your targets.  The goal is to identify effort that is being invested in areas of the business that should be allocated towards the new direction.
• Identify teammates who aren't aligned with your direction of focusing the company on a clear set of objectives. Some teammates enjoy startup peace time as a way to build new products but during war time, you need your team to be extremely focused.
• Execution
• Clarify to the organization what changes must be done in order to stop spiraling out of control. Generally, this can be done in all hands.
• Conduct 1on1s with your executives and managers to ensure they understand why the company needs to have extreme focus on getting out of the spiral. This will help them explain your new direction to their direct reports.
• Keep yourself open to office hours. Employees will have questions regarding the company's health and direction, always ensure they have a way to reach you. 

So how do you know if you've reversed the spiral? One way to look at it is by measuring the morale of your team. Managers of the company should be asking their direct reports in 1on1s how they feel about the company's health and direction.

The mind of a CEO is a constant battle of psychology. Not only do they have to project confidence to their organization but they have to constantly battle their inner demons on a daily basis. In a startup, things always go wrong. It is important to understand why this is happening and go through the exercise of identifying and executing changes required to get out of the spiral.

Cheers,

Jaime