Page 63 - (DK) The Business Book

START SMALL, THINK BIG 61

Spotify CEO Daniel Ek worked with
co-founder Martin Lorentzon to build
a large but agile company. It avoids
Greiner’s growth problems by working
in small squads overseen by “tribes.”

as a start-up business. Mirroring
the benefits enjoyed by companies
in Greiner’s first stage, every squad
is fully autonomous, has direct
contact with its stakeholders,
and operates with minimal
dependency on other squads.
To deal with the various crises
of growth (such as autonomy and
red-tape), related squads are
grouped into “tribes.” The function
of the tribe is to support and enable
the activities of each squad, in
capabilities, and the capacity of In this regard, the various crises essence mirroring the role of
its core markets, and seek identified by the Greiner Curve can venture capitalists in incubating
external growth. be seen as natural transitions. An new start-ups. The operation is
The actual rate of growth— organization must manage its way kept small and agile by limiting the
in terms of customer numbers, through such transitions and head count for each tribe to 100.
revenue, or profits—within each growing pains as it continually Spotify appears to have managed
phase of the Greiner Curve will defines and redefines the scope of its to maintain a balance between the
vary, depending on the individual operations, its values, and its overall benefits of growth and the feel-good
company. Organizations such as purpose. As Benjamin Franklin elements of a start-up. The founders
Facebook were already large by the observed, “without continual nevertheless admit that the system
time they started to face crises of growth and progress, such words is not flawless, and as the demand
delegation and control. Others may as improvement, achievement, and for an organization-wide strategy
remain small for many years, success have no meaning.” grows, it may be that even Spotify
perhaps never even reaching will not escape the crises of growth
the leadership-crisis stage. Large but agile predicted by the Greiner Curve. ■
One company that seems to have
Using the Greiner Curve heeded the lessons of the Greiner
Knowledge of the Greiner Curve Curve is the Internet music-
can help start-up founders to streaming service, Spotify. The
predict and manage the inevitable organization’s Swedish founders,
crises of growth. Even when Daniel Ek and Martin Lorentzon, All growth depends upon
enjoying the heady days of early knew at the company’s inception activity. There is no
growth, entrepreneurs need to be in 2008 that their aim was growth. development physically or
mindful of the steps required to They also knew that they were not intellectually without effort,
build the business further. They willing to compromise the benefits and effort means work.
must put structures in place as that accompany the excitement Calvin Coolidge
soon as possible; the earlier that of a start-up business.
US former President (1872–1933)
formal systems and professional Spotify organizes itself around
management are introduced, the project-based teams, called
less they will be resented and “squads.” The organization is
resisted, and the stronger the divided into small clusters of
foundations for continued growth. squads, with each squad running