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Operational Dilution in Startups

Distraction, divergence and complexity are 3 defaults in organisations in absence of forcing functions.

Organisations are living and breathing multivariate beings. Just like people, the organisation behaviour and their effectiveness change over time. When left on autopilot, organisations tend to start showing inefficiencies. I like to call it operational dilution.

What is operational dilution?

You’d have observed that every few weeks (or months if your org is large), you notice a sense of chaos in the organisation. People seem to be misaligned on the priorities. They often run into arguments about what’s important to execute at the given moment. Frequent discussions are needed to get people to agree on seemingly the simplest of ideas. Everything just takes too much talking and things seem to have slowed down.

This is operational dilution.

But why does this happen?

Operational dilution results because of the absence of a forcing function – the leadership.

There’s a straightforward way to avoid such a dilution. The leadership needs to set a cadence with their teams to work on the 4 main pillars of sharper execution.

The leadership charter

  • Bring focus back to the goals: What are our timeless goals and are we making progress towards them?
  • Drive alignment on problems: What are the most important problems right now and are we committed to solving them?
  • Achieve clarity on execution: What is the level of fidelity we’re expecting in the solutions and at what scope?
  • Drill in the tenet of simplicity: Are we approaching our work with the utmost simplicity? Is our approach today simple enough to scale for tomorrow’s problems?

As long as the organisation has the right structure to make such a cadence successful, their execution can be sharp, focused, of high quality and devoid of unnecessary surprises.

Remember: The key here is repetition. The only way to avoid gradual dilution over time is to keep bringing the key people together and repeat the exercise at regular intervals.

Startups vs BigCos

Big companies have a ton of checks in place to avoid dilution. I’ve seen a lot of product launches reach the very last stages of executive reviews and get shunned down because they didn’t quite align with the larger organisation goals or didn’t have the necessary simplicity. Big companies can do that because they aren’t bothered about ‘work that gets churned’ or ‘time that was wasted’. They have that luxury.

Startups are different though. They lack the necessary operational processes and the hierarchy that would catch misalignments and lack of simplicity. Startups optimise for speed and take shortcuts that leave their execution vulnerable to dilution. You must have heard that a team shipped a feature and later found out that another team already had built it (albeit differently) and now you have 2 versions of the same thing. Or that a team worked really hard on solving a problem and later realised that they missed out on an even bigger one.

Startups often execute first and think after. Big companies would rather wait painfully long to execute in the interest of thinking deeply.

This is why it’s even more important for the leadership in startups to be mindful of the operational dilution (catch the early signs sooner) and work towards curbing it. The longer it goes unchecked, the more time it takes to get the sharpness back.

This is a topic I am really curious about and would love to know if you have more thoughts or experiences to share.