Change is a part of every company journey, particularly during times of scale. From a major pivot in product positioning, to an overhaul of the business model or sales strategy, all companies will encounter the need for significant shifts in the way they operate as they grow.
At the SaaStr Annual event (held virtually this year) Greylock general partners David Wadhwani and Sarah Guo discussed the key elements to successfully navigating operational phase shifts, which David has experienced numerous times over the course of his two decade career as a software executive. Prior to joining Greylock, David was the CEO of AppDynamics, which he transformed to a multi-product business that was acquired by Cisco for nearly $4 billion. Previously, he served as SVP and GM of Adobe’s Digital Media Business Unit, and is regarded as the primary architect of Adobe’s overall transition to a subscription business. During the fireside chat, David detailed 5 things every company and founder should do to navigate phase shifts successfully, and share examples of how they played out during his own experience.
You can listen to the recording here.
Below are the key takeaways from the talk. Quotes are from David Wadhwani.
Clarity: Have a clear and simple end state. Complexity is the enemy of transition.
“Successful transition requires centralized decision-making and simplification so that you can actually get your arms around where you want to move from and to. The only way to do that is to push hard on simplifying the core of what you spent the past many years complicating before you can efficiently transition it.”
Conviction: Difficult decisions need to be made during a phase shift, so you have to be willing to burn the boats.
“When you are going through a phase shift you have to recognize that all the systems you’ve been relying on to make good decisions (e.g. reports, research, institutional research, etc) in a steady state are defined by the framing of the past and the data. When you make a transition, you have to remember those systems are optimized for something that you no longer want, and so they can get in the way of you getting confidence in the transition. If your goal is the opposite of what you currently have, you can’t just rely on the data. You have to also rely on your own beliefs.”
Command: Make decisions quickly and avoid pushing them out to the edges.
“It’s never more important than in a transitional moment to be able to make decisions really quickly. Making decisions at that time versus making decisions during a steady state period is like looking at federal versus state – when you are pushing a decision in the organization in a phase shift, you really need to pull decision-making back to the “federal authority,” i.e. a small group of people who are just going to make that decision. You’ve got to be willing to make decisions as a command control organization, and be willing to make a few mistakes and correct it as you go.”
Communication: Deliver the same message across all audiences.
“Communication is about bringing all the people who know the business so well along. So you don’t want to manage different communication to different groups. You want to be able to tell the employees, the customers, and the investors the same story. It’s very easy in a one-on-one conversation or in a small group to tell people what they want to hear. But in doing that, you’re not doing them any service, which is why I believe so strongly in a single, consistent set of messages across different audiences.”
Community: Help employees embrace change.
“Take the perspective that in order to bring people along, communication needs to be a two-way street from the beginning. If you believe in something, promote it, but listen to the feedback, improve it and promote it again. It really comes back to that. Then you pair that with providing everything that those that individuals need to do to make that transition and move themselves from (maybe) the bad side of that equation to the positive side of the equation. If you do that, my view is you’ve done your job as a leader, and then it’s really up to individuals to make the decision whether to make that transition or not. “