How to Scale from 50 to 800 Employees: Organizational Growth Inflection Points and Leadership Strategies

Building trust, preventing silos, and creating accountability in high-growth companies - featuring Kristen Shannon, CEO of Highliner Technology

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Kristen Shannon is the founder and CEO of Highliner a consultancy that helps high-growth businesses scale across people, systems and processes.

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Highliner Technology

Additional resources
Rocket Fuel
Blitzscaling

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Company Growth Inflection Points: When Everything Changes

Brandon: What's your take on this thresholding of 50 employees and what happens after that? I know that Kristen is talking from 50+. I read an article years ago talking about how companies change when the number starts with a 1 and a 3. So 1 person to 3, 10 people to 30, and then 100 people. This has actually struck me as very true.

Bethany: I tend to join companies when they're about 30 people, and there's clearly a point there where you need some specialization. Then 30 to 50, I haven't noticed a massive difference, but when you get to about 100, the wheels start falling off if you don't have these processes in place. Interestingly, at least for me, around 300 is when I stop enjoying the job. I've always wondered if I stop enjoying it because it's 4 to 5 years in and I'm bored and overwhelmed and ready for a new challenge, or if there's actually something at 300 people where it becomes much more performative and less around knowing everybody in the organization. That is what I don't enjoy.

Building Trust in Leadership Teams: The Foundation of Scaling Success

There are 3 core tenants to set up organizational scaling success, regardless of whether it's 50, 100, or 300 employees.

The first one is building a good structure and ways of working around the leadership team specifically - and in particular, trust within the leadership team. Each individual functional leader needs to be in a position to share concerns they're having with their function, share concerns with other functions within the business, and do so in a way where they clearly feel the other team members have their back.

Bethany: It's challenging. It's not just challenging because you need to build trust within the organization or within the management team, but also you tend to have everybody being a specialist. They feel personally responsible for what their team does, and then there's also a certain amount of "don't step on my shoes, this is my patch."

It's not just around building trust, but there's also a lot of needing to let go of ego. So that you can listen, not feel threatened, and realize that you're in a room full of bright people who might actually be able to help you.

The Power of Informal Leadership Conversations

Brandon: What I've tended to find is that having an informal chat with a couple members of the SLT, usually the C-suite individuals, on a weekly basis where you're out of the company, you're having coffee, it's informal, there's no agendas... having this organic conversation around concerns or wild thoughts you're having around the business is incredibly useful in ways that I don't get from an SLT meeting.

Bethany: I had that type of experience at NuVoice Media because we were in the office probably 2 to 3 days a week altogether. Some of the best work and thinking and progress was made in those informal conversations. At Peak, we never really managed it because we have such a dispersed team, and I just think in Zoom it's hard to replicate.

External Coaching for Leadership Teams

Brandon: I've always found it very useful for SLT members that don't have experience in the phase that you're in - so let's say you're in a Series B round - to really give them access to outside coaching and counsel with someone that has been there and done that.

Bethany: Do you need experience in the phase to be successful? No. Will it take you a lot longer and will you make a lot more mistakes and could you have done it better with some outside experience? Yes. You can do it, it's just might not be the most efficient way.

We're having Pete Crosby on in a couple weeks, and what he did at his company was everybody on the SLT had to have a mentor who was 18 months ahead of them. It was their responsibility to source a mentor, see them regularly, and learn. Part of their SLT meeting monthly was everybody getting together and sharing what they learned from their coaches.

Meet Kristen Shannon: From Hiring 75 to 800 People

Brandon: I am thrilled to welcome Kristen Shannon to the show. Kristen is an expert operator and has been COO at multiple high growth companies. In one of her roles, she actually hired 800 people in a single year. Kristen is now CEO at Highliner, a consultancy that helps high growth businesses that have just raised their series A or B scale effectively.

Kristen: The 800 is interesting, because actually, when I started in that organization, we were hiring 75 people a year. The most interesting part was seeing when I got back from mat leave and we were hiring at that scale, some of the same systems and processes we had put in place for 75 were still being used at 800.

I remember asking the team, "Why are we running this particular selection process for this type of candidate?" Someone said it was super important, we've always done it this way. I looked at them and said, "That's not true. I had a really difficult senior manager who ran that unit years ago who insisted doing it that way, but there's no necessary reason to run the process this way."

"We've always done it this way" is the scariest thing to hear, or the best trigger to know that you need to make some change. If you're doing things the same way you did when you were hiring 75 people, it inherently won't work as it gets bigger.

Understanding Organizational Inflection Points

Brandon: What are the actual inflection points when you grow headcount where there is a change you can feel?

Kristen: Reid Hoffman has a really good model for this that he's used in blitzscaling. He starts with family (single digit employees), then tribe (tens of people), then village (hundreds), then city (thousands), and nations (tens of thousands).

I found there's a real inflection point around 30 to 50. Up to 30, you can have that feeling of "we're all around one table." That starts breaking down around 50, and you start putting in small organization processes to soothe communication pain.

The next point is 80 to 100. It's not when you hit those marks exactly - it's organizations that know they're going to double again. When they get to 80-100, they're like "there's already a lot of us, doubling this feels really big."

Then the next one is 300. If you're 300 and staying at 300, it doesn't feel as significant. But if you're 300 and you know you're going to be a several thousand person organization fairly soon, that's a jump you don't know how to make.

Preventing Organizational Silos at Scale

Brandon: The siloization effect - you see this in companies that roughly get to that 50 person mark and then it just gets worse if you don't address it. How do you set yourself up to ensure that doesn't happen?

Kristen: I think it's really natural for organizations to get siloed. You move from generalist to more specialized people, and you're adding whole new units. When you started, maybe sales was the founder, and suddenly it's a team of 20 with different targets and goals.

You have to fight really hard against it in two ways:

1. Clarity of aligned incentives and objectives: Being really clear what the organization is pulling towards. Your marketing team might focus on brand building and your sales team on lead targets, but everyone should be clear about how those feed into overall revenue targets.

2. Ways of working: At Highliner we break operations into 5 ways of working:

Systems and process
Tools
Roles and responsibilities
Cadence
Mechanisms (informal habits of the business)

The biggest things are not your tools or systems - it's your roles and responsibilities, cadence, and informal habits. Tools and systems should support those things.

The Tool Proliferation Problem

Bethany: Sales leaders are the most gullible of all people to be sold to. They're like "this reporting tool is going to mean that I absolutely hit forecast every time," and then they don't use any of them because they still have to do the boring cadence to make the tools work.

Kristen: I know another COO at a post-C company who said "I have 1000 tools. 20 of them are project management tools." If you start with the tools, you're missing something big. Start with roles, responsibilities, and cadence, then systems and tools follow.

Bethany: Take Gong as an example. If you think it's going to replace coaching and training of your sales team, that's terrible. But if it enhances really good coaching as a cornerstone to improve, that's great. It can't coach for you - it can give you information to help you coach.

Key Roles to Hire at Scale

Bethany: Around 300-350 people, I lose pleasure in working. You end up spending a tremendous amount of time being a minor celebrity and having to watch exactly what you say. One role we hired for was an internal comms person - it took so much off senior leadership's plate. What are some other key hires?

Kristen: I'm biased, but companies that don't have COOs yet make me anxious. It's not even the title - when I look at a leadership team at scale, I ask: Where's my balance of visionaries and integrators? Where are my functional doers? Where are people pulling things together across the board?

That minor celebrity bit is very real, and I think for CEOs, at 10 people there's this CEO aura that starts building that can be weird. At 300 stage, you're starting to bring in leadership from external places, functional experts. Being super intentional about executive onboarding is really important so the organization doesn't do organ rejection.

Managing the Executive "Minor Celebrity" Factor

Brandon: People really read a lot into what you say, misinterpreting what you say, the cues and behaviors you demonstrate. You're being watched and it's very easy for things to be interpreted in ways that are not helpful.

Kristen: I love the idea of the internal comms person. Even if you don't have that role, that expertise is useful. Having open and honest discussions about this - we should just talk about it more. This is part of being in this role and you need to prepare for it.

Coaching can be super helpful because it's such a personal and odd experience. My biggest tips: coaching and mentoring, plus open discussions as a leadership team about where this is happening.

Simple example: We have all our founders use clear framing on Slack. When they share anything, they frame it as:

For information: relevant to such and such
For interest: you may like this
For action: need comments from [specific teams/people]

"Operations is where people meet systems and process, not about systems and process. It's really about the people and how you help people go through the rapid change that is high growth organizations. That's how you make your organization successful."

Operations is About People, Not Just Process

Bethany: How much of your time is spent rolling out cadences and processes versus helping people be better leaders or working through baggage?

Kristen: We always say operations is where people meet systems and process. The vast majority of any project is about change management and how people adopt something new.

The hardest thing about being a leader in a scaling organization is everything that made you successful a year ago may not even be useful at the next stage. The skills you need to find product market fit are not the skills you need to scale.

Operations is about understanding the organization, being one of the few people that sees how everything fits together, and understanding where your people are in that and how you help move them through it. It's a lot of listening, conversation, and going through things with people.

Creating Accountability in Scaling Organizations

Brandon: When clients don't feel sharp enough accountability across teams, what approaches do you use?

Kristen: If our accountability problem was people taking naps and eating bonbons all day, that would be easy to solve. But that's never the issue. You have committed people working really hard, and things still aren't getting done.

To create accountability in rapidly scaling organizations, a lot comes down to focus. The leadership team has to take a hard look at what they're asking teams to prioritize and when. I start with: what is our process around prioritization and deprioritization?

Then we go into roles and responsibilities - having clear understanding about who is responsible for what using frameworks like RACI. But usually it's about focus first, then mechanisms around fluid roles and responsibilities.

Running Effective OKR Accountability Meetings

Brandon: In OKR check-ins with leadership and wider teams - should you be holding teams accountable in that progress review?

Kristen: I think it does happen there. We spend time with the leader running that meeting on how to question effectively and hold people to account. Getting into the retro piece of "why were things not done?" - digging into that in a collegial way.

From Amazon: "Good intentions don't solve problems, but mechanisms do." So what are we putting in place to solve for this next time? If OKRs aren't being hit because someone was pulled by another team, are you going to accept that or put something different in place?

Bethany: One trick is separating the person from the activity. It's not "you're lazy," it's "what are the blockers? Why is the system falling apart?" That takes the sting out and people are less defensive.

Kristen: Exactly. You don't reprimand publicly. It's almost always people not having what they needed or being pulled in multiple priorities.