avoid the pitfalls of growth

5
Avoid the Pitfalls of Growth Building a 21st century business demands a thorough understanding of the demands that rapid growth can bring. For many businesses, rapid growth is the Holy Grail. Eager entrepreneurs envision their companies rising up from anonymity to take their rightful place on the Inc. 100 list, expanding rapidly from a mid-sized firm to a multi-billion dollar organization in a matter of months. It’s not a far-fetched idea – especially in the tech industry. These days it may seem like every startup with a bright idea is going from obscure to global giant overnight, but the reality is that for every success story there are hundreds of failures. Many emerging growth companies may start on the same track, but what differentiates successful companies from failed enterprises is how well company leadership can maintain the integrity of the strategic vision. Rapid growth can often monopolize leadership’s time forcing leaders to get caught up in the day-to-day challenges and causing companies to veer off track. And just like that, rapid growth can turn into rapid decline. There are ways to avoid the crash, however. Smart companies looking for long-term sustainability figure out early on that managing growth requires discipline, focus and being open to input. These companies know that guarding corporate culture, prioritizing activities, methodical hiring, guidance from outside experts and working with partners to hand off tasks that don’t deliver core value are all part of the toolkit for successful growth. Culture and the Art of Growth “The first rule of growth is to accept that change is going to happen,” says Bryce Maddock, co-founder of TaskUs. “[Change] is inevitable, so all you can do is plan for it.” Growth – and the change it unleashes – can pose a significant challenge to the health and wellbeing of any mid-sized business (revenues of $5MM-$150MM). Culture, operations and profitability can all be negatively impacted if the organization does not adequately plan for this change. Ideally, growing companies find a balance between accommodating increased business flow and maintaining the culture and core competencies that gave them a competitive edge in the first place. Maintaining culture may not seem like a priority at a time when a business should be focused on quantitative growth, but it is. Entrepreneurs spend a lot of time creating a workplace that will foster creativity, innovation and partnership. Indeed, culture is one of the most important aspects of a business, and it is often the thing that inspires the first round of employees to invest their time and sweat equity in building the business. “The only thing of real importance that leaders do is to create and manage culture,” Edgar Schein, Professor at MIT’s Sloan School of Management once famously said. “If you do not manage culture, it manages you.” Many business leaders understand this idea in theory. But when their companies hit a growth trend they get so caught up in growing to meet the challenge, they fail to see how growth is affecting the culture. And that is when it falls apart, says David Drake, founder of LDJ Capital, an investment equity firm in New York. “Company leaders have to be proactive in building the culture of the company, but when you grow too fast you can easily lose control.” Pressure on employees to produce

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Page 1: Avoid the Pitfalls of Growth

Avoid the Pitfalls of GrowthBuilding a 21st century business demands a thorough understanding

of the demands that rapid growth can bring.

For many businesses, rapid growth is

the Holy Grail. Eager entrepreneurs

envision their companies rising up

from anonymity to take their rightful

place on the Inc. 100 list, expanding

rapidly from a mid-sized firm to a

multi-billion dollar organization in a

matter of months.

It’s not a far-fetched idea – especially in

the tech industry. These days it may

seem like every startup with a bright

idea is going from obscure to global

giant overnight, but the reality is that

for every success story there are

hundreds of failures. Many emerging

growth companies may start on the

same track, but what differentiates

successful companies from failed

enterprises is how well company

leadership can maintain the integrity of

the strategic vision. Rapid growth can

often monopolize leadership’s time

forcing leaders to get caught up in the

day-to-day challenges and causing

companies to veer off track. And just

like that, rapid growth can turn into

rapid decline.

There are ways to avoid the crash,

however. Smart companies looking for

long-term sustainability figure out early

on that managing growth requires

discipline, focus and being open to

input. These companies know that

guarding corporate culture, prioritizing

activities, methodical hiring, guidance

from outside experts and working with

partners to hand off tasks that don’t

deliver core value are all part of the

toolkit for successful growth.

Culture and the Art of Growth

“The first rule of growth is to accept

that change is going to happen,” says

Bryce Maddock, co-founder of TaskUs.

“[Change] is inevitable, so all you can

do is plan for it.”

Growth – and the change it unleashes

– can pose a significant challenge to

the health and wellbeing of any

mid-sized business (revenues of

$5MM-$150MM). Culture, operations

and profitability can all be negatively

impacted if the organization does not

adequately plan for this change.

Ideally, growing companies find a

balance between accommodating

increased business flow and

maintaining the culture and core

competencies that gave them a

competitive edge in the first place.

Maintaining culture may not seem like

a priority at a time when a business

should be focused on quantitative

growth, but it is. Entrepreneurs spend

a lot of time creating a workplace that

will foster creativity, innovation and

partnership. Indeed, culture is one of

the most important aspects of a

business, and it is often the thing that

inspires the first round of employees to

invest their time and sweat equity in

building the business.

“The only thing of real importance that

leaders do is to create and manage

culture,” Edgar Schein, Professor at

MIT’s Sloan School of Management

once famously said. “If you do not

manage culture, it manages you.”

Many business leaders understand this

idea in theory. But when their

companies hit a growth trend they get

so caught up in growing to meet the

challenge, they fail to see how growth

is affecting the culture. And that is

when it falls apart, says David Drake,

founder of LDJ Capital, an investment

equity firm in New York. “Company

leaders have to be proactive in

building the culture of the company,

but when you grow too fast you can

easily lose control.”

Pressure on employees to produce

more, coupled with rapid hiring and

over stretched resources, can

transform a great place to work into a

place where leaders spend much of

their time putting out fires and dealing

with conflicts that can cause good

employees to move on.

To prevent that from happening,

company leaders need to ask

themselves three questions:

1.What do we love about our

culture?

2.How does our culture define us?

3.How do we scale the most

important aspects of our culture?

The third question can often be the

trickiest, because the little

extravagances – free soda in the

company fridge, or picking up dinner

to celebrate the end of a project – are

the kinds of perks that small teams

love. But that generosity can get out of

control when you have hundreds of

employees.

Business leaders need to understand

the motivations that drive culture – it’s

not about free drinks, it is about

acknowledging that your team is going

above and beyond for your success.

Once you understand the sentiment,

you can try to adapt your strategies to

accommodate growth, says Jaspar

Weir, president of TaskUs.

One of the hardest parts of this

transitional phase is delegating

authority, he says. “A lot of

entrepreneurs struggle to give up

control when their companies grow.”

Weir understands this challenge first

hand. TaskUs has experienced 100%

growth in the last year, and has been

on the Inc. 500|5000 list two years in a

row. It is an exciting time for the

company, but it has been challenging

to adapt, Weir admits.

“When we had 20 employees I had a

hand in every project,” he says. Now,

with more than 1100 employees, and

clients across the country, he can’t

manage the business in the same way.

“I have to trust others to take the lead

on those projects, so I can make the

right decisions for the company.”

Us vs. Them

Hiring is another key activity that

business leaders struggle with during

periods of rapid growth.

For rapidly growing companies, finding

talent can become an all-consuming

task that distracts leaders from the

more strategic goals of the business,

says Sander Daniels, founder and CEO

of Thumbtack, a provider of local

service professionals for consumer

jobs. “The best place to find talent is

your personal network, but if you need

to hire a lot of people fast, your

network won’t be enough.”

Ultimately, outfitting a 25-person

customer service team, or filling myriad

lower level positions that are vital to

running the business but not a part of

your core value proposition, is not a

good use of time or resources.

“The more time you spend hunting for

talent, the less time you have to drive

your business,” Daniels says.

It can be tempting to throw warm

bodies into chairs just to solve the

latest problem. But that’s a risky

approach as a few bad hires can

disrupt the entire organization, driving

turnover among top performers while

the laggards stay on board.

And even if you are able to fill those

positions with smart, skilled,

culturally-appropriate people, you may

find yourself facing an “Us vs. Them’

dilemma.

In lot of cases, talented college grads

will take low-level jobs in innovative

companies with the hope of becoming

a part of something bigger, Weir says.

But if they don’t see a path to

leadership or win a stake in the

business, it can become frustrating for

them and for the people they work

with – particularly if some employees

are treated differently than others.

In many companies, the first round of

employees received an ownership

stake in exchange for their hard work --

but later hires may not get the same

deal. Those second round employees

may put in just as much effort, but due

to timing and the roles they fill, they

get a paycheck, while their colleagues

await the big payday. “When you have

two classes of workers it can create a

really toxic environment,” he says.

Unless you are planning to give every

employee their own private piece of

the company, you need to

acknowledge the challenges you’ll face

as you add staff who have no real stake

in your future, and ask yourself whether

hiring an employee to finish every task

is the right choice for you.

Outsourcing Eases Growing Pains

One of the easiest ways to minimize

internal conflict and keep your core

team focused on the strategic goals of

your business is to outsource work that

doesn’t fall into your area of expertise,

says Drake. “You remove a lot of

tension from your company and

corporate culture when you

outsource.”

Outsourcing companies, like TaskUs,

take over non-core tasks like customer

support and a wide range of back

office processes, which can include

content moderation, lead generation,

transcription, accounting, payroll and

more. While the nature of the process

that companies like TaskUs can take on

varies, the benefit does not. Working

with an outsourcing partner can free

up company leaders and overwhelmed

staff and help company operations

become more efficient and effective.

Outsourcing to third party providers

can deliver a number of strategic and

cultural benefits for fast growing

companies:

1. Eliminate Recruiting Headaches

Trying to hire a large number of

employees in a short amount of time

can be distracting, expensive and a

waste of limited resources, Drake

argues. If a company is on a fast

growth track, however, they can’t risk

ignoring customers while trying to find

people to manage essential tasks like

customer service. That’s especially true

given the fact that the average

“wronged” customer will tell about

8-16 people about their negative

experience – and that’s not even

accounting for the social media effect.

By outsourcing these processes,

companies not only eliminate the

strain and risk associated with

recruiting, but also gain the peace of

mind that comes from knowing that

the job is being done well. The net

effect is liberating and crucial for

intelligent growth. “The more you

outsource, the more you can focus on

your core business, and hiring for your

core team,” Drake says.

2. Tap a Global Talent Pool

Filling every open position locally can

be both difficult and expensive,

especially for businesses

headquartered in high-rent locales like

New York City or San Francisco. It’s

also completely unnecessary, says

Thumbtack’s Daniels. “It turns out that

the city where your company is located

doesn’t have a global monopoly on

talent.”

From the beginning, Daniels decided

to keep his company’s core team of

engineers and leaders in-house

because they built the technology and

strategy behind the company’s

business. Then they outsourced

everything else. “San Francisco is one

of the most expensive places in the

country to live,” he notes. “We want

the best talent, but that doesn’t mean

we need to hire them here.”

Today, Thumbtack has 50 employees in

its San Francisco office, and 500

outsourced team members, most of

whom reside in the Philippines. “We’ve

found amazing talent at much lower

rates and they still make a great living

where they work,” he says.

3. Avoid Employee Conflict

Outsourcing non-core jobs can prevent

the “Us versus Them” environment by

ensuring everyone you hire has a

strategic role in the company, says

Maddock. Just because you need to

get a job done, doesn’t mean you

need to hire an employee to do it.

“You want to keep your core team

focused on creating value,” he says. It’s

a good yardstick for prioritizing

recruitment. If the work you need done

doesn’t add strategic value to the

business then it is a role that could

potentially be outsourced.

4. Maintain Competitive Agility

Growth is rarely a steady process, and

there can be many peaks and valleys

along the way. If you are always hiring

to accommodate the peaks, you may

end up with a lot of disengaged

employees when business falls off, says

Kate Vitasek, faculty at the University of

Tennessee College of Business

Founder of consulting firm Supply

Chain Visions, and innovator of the

Vested business model.

Or worse, as you grow the skills you

need change, causing you to outgrow

the capabilities or your current staff.

That can put you in the awkward

position of having to fire one set of

employees while recruiting another.

Outsourcing can help minimize those

ebbs and flows by allowing you to take

advantage of third party resources

when you need them, and dial back

those services when you don’t. “When

you outsource you get the talent you

need and they can scale with you,” she

says.

That helps companies stay agile, which

makes them more competitive.

5. Expand Your Knowledge Base

You may be great at what you do, but

that doesn’t mean you know

everything about business, says Drake.

“Outsourcing provides companies with

a fresh perspective and a chance to

learn from a group that knows more

than you,” he says.

You may find inspiration from a

consultant, or discover a more efficient

way of doing things by partnering with

a service provider who specializes in

managing these business processes.

“When you outsource it’s partly about

getting a job done, and partly about

looking for inspiration,” he says.

It’s also a great way to spread the word

about your business. “Every time you

outsource, more people learn about

you, which can open new doors,” he

says. “It’s another opportunity to

cross-collateralize.”

How to Choose

Outsourcing can help companies that

are managing the host of issues that

come with rapid growth. But as with

any business decision, an outsourcing

relationship has to be thoughtfully

vetted and carefully managed if it is

going to work, says Vitasek. “A lot of

processes make sense for outsourcing,

but if you are going to do it, you have

to do it right.”

Once you decide to outsource, your

first goal is to choose the right partner

for your needs. “You don’t want to be

their biggest client or their smallest,”

Weir advises. “And you do want to be

sure they have the talent, experience

and commitment to meet your needs.”

Before shopping for an outsourcing

partner, define the kind of workers you

want and the skills you want them to

have, Daniels says. For example, you

may require a team who speaks perfect

English and has strong writing skills, or

you may be seeking a specific

technical certification, or business

experience. “Knowing who you want

working for you will help you vet

whether partners can meet your

needs.”

And don’t just take their word for it,

Weir advises. “Talk to their past

clients, get references and ask hard

questions like ‘tell me about a time

when you made a mistake,” he says.

“How companies handle mistakes says

a lot about how they deal with tough

situations.”

You should also ask about their

managerial process, Daniels advises.

Outsourcers like TaskUs, for instance,

closely manage your outsourced team

as part of their service delivery process,

while others will give you access to

talent but don’t offer managerial

support.

If you have the time and inclination to

manage an outsource team in-house,

management services may not be

important, but if you are in growth

mode, you will need a company that

can oversee the outsourced operation

for you, according to Daniels.

Manage Outcomes not Activities

When you chose an outsourcing

partner, remember that they are the

expert and treat them accordingly,

Vitasek says. Companies that think

they know more than your outsourcer

tell them what to do, instead of

working with them to find the most

effective solution. But that often leads

to ineffective work. “It is better to give

them your desired outcome, and ask

them the best way to get there.”

You also need to take the time to

educate the people who will perform

the tasks about your company and

your business goals, Weir says. “When

they understand how their work is

connected to your success, they will be

more engaged in the deliverables.”

To ensure those deliverables are being

met, set clear parameters for success

that align with your business goals and

track them at least once a month,

Vitasek says. For example, if you

outsource a marketing campaign and

your strategic goal is to generate sales,

then measure the success of that

outsourced project based on increased

sales – not pages of marketing material

generated.

“Too often companies pay for

transactions – an hour of coding, or

cost per call – when what they really

want is results,” she says.

Finally, be prepared to spend some

extra time and attention on the

outsourcing project as it ramps up, and

make sure the outsourcing team has a

single point of contact in your

company to address any issues.

It takes time to build an outsourcing

relationship and make sure things are

operating smoothly, Maddock says.

“You’ve got to be prepared to invest in

the relationship, and work with that

team to get the best results.”

Page 2: Avoid the Pitfalls of Growth

For many businesses, rapid growth is

the Holy Grail. Eager entrepreneurs

envision their companies rising up

from anonymity to take their rightful

place on the Inc. 100 list, expanding

rapidly from a mid-sized firm to a

multi-billion dollar organization in a

matter of months.

It’s not a far-fetched idea – especially in

the tech industry. These days it may

seem like every startup with a bright

idea is going from obscure to global

giant overnight, but the reality is that

for every success story there are

hundreds of failures. Many emerging

growth companies may start on the

same track, but what differentiates

successful companies from failed

enterprises is how well company

leadership can maintain the integrity of

the strategic vision. Rapid growth can

often monopolize leadership’s time

forcing leaders to get caught up in the

day-to-day challenges and causing

companies to veer off track. And just

like that, rapid growth can turn into

rapid decline.

There are ways to avoid the crash,

however. Smart companies looking for

long-term sustainability figure out early

on that managing growth requires

discipline, focus and being open to

input. These companies know that

guarding corporate culture, prioritizing

activities, methodical hiring, guidance

from outside experts and working with

partners to hand off tasks that don’t

deliver core value are all part of the

toolkit for successful growth.

Culture and the Art of Growth

“The first rule of growth is to accept

that change is going to happen,” says

Bryce Maddock, co-founder of TaskUs.

“[Change] is inevitable, so all you can

do is plan for it.”

Growth – and the change it unleashes

– can pose a significant challenge to

the health and wellbeing of any

mid-sized business (revenues of

$5MM-$150MM). Culture, operations

and profitability can all be negatively

impacted if the organization does not

adequately plan for this change.

Ideally, growing companies find a

balance between accommodating

increased business flow and

maintaining the culture and core

competencies that gave them a

competitive edge in the first place.

Maintaining culture may not seem like

a priority at a time when a business

should be focused on quantitative

growth, but it is. Entrepreneurs spend

a lot of time creating a workplace that

will foster creativity, innovation and

partnership. Indeed, culture is one of

the most important aspects of a

business, and it is often the thing that

inspires the first round of employees to

invest their time and sweat equity in

building the business.

“The only thing of real importance that

leaders do is to create and manage

culture,” Edgar Schein, Professor at

MIT’s Sloan School of Management

once famously said. “If you do not

manage culture, it manages you.”

Many business leaders understand this

idea in theory. But when their

companies hit a growth trend they get

so caught up in growing to meet the

challenge, they fail to see how growth

is affecting the culture. And that is

when it falls apart, says David Drake,

founder of LDJ Capital, an investment

equity firm in New York. “Company

leaders have to be proactive in

building the culture of the company,

but when you grow too fast you can

easily lose control.”

Pressure on employees to produce

more, coupled with rapid hiring and

over stretched resources, can

transform a great place to work into a

place where leaders spend much of

their time putting out fires and dealing

with conflicts that can cause good

employees to move on.

To prevent that from happening,

company leaders need to ask

themselves three questions:

1.What do we love about our

culture?

2.How does our culture define us?

3.How do we scale the most

important aspects of our culture?

The third question can often be the

trickiest, because the little

extravagances – free soda in the

company fridge, or picking up dinner

to celebrate the end of a project – are

the kinds of perks that small teams

love. But that generosity can get out of

control when you have hundreds of

employees.

Business leaders need to understand

the motivations that drive culture – it’s

not about free drinks, it is about

acknowledging that your team is going

above and beyond for your success.

Once you understand the sentiment,

you can try to adapt your strategies to

accommodate growth, says Jaspar

Weir, president of TaskUs.

One of the hardest parts of this

transitional phase is delegating

authority, he says. “A lot of

entrepreneurs struggle to give up

control when their companies grow.”

Weir understands this challenge first

hand. TaskUs has experienced 100%

growth in the last year, and has been

on the Inc. 500|5000 list two years in a

row. It is an exciting time for the

company, but it has been challenging

to adapt, Weir admits.

“When we had 20 employees I had a

hand in every project,” he says. Now,

with more than 1100 employees, and

clients across the country, he can’t

manage the business in the same way.

“I have to trust others to take the lead

on those projects, so I can make the

right decisions for the company.”

Us vs. Them

Hiring is another key activity that

business leaders struggle with during

periods of rapid growth.

For rapidly growing companies, finding

talent can become an all-consuming

task that distracts leaders from the

more strategic goals of the business,

says Sander Daniels, founder and CEO

of Thumbtack, a provider of local

service professionals for consumer

jobs. “The best place to find talent is

your personal network, but if you need

to hire a lot of people fast, your

network won’t be enough.”

Ultimately, outfitting a 25-person

customer service team, or filling myriad

lower level positions that are vital to

running the business but not a part of

your core value proposition, is not a

good use of time or resources.

“The more time you spend hunting for

talent, the less time you have to drive

your business,” Daniels says.

It can be tempting to throw warm

bodies into chairs just to solve the

latest problem. But that’s a risky

approach as a few bad hires can

disrupt the entire organization, driving

turnover among top performers while

the laggards stay on board.

And even if you are able to fill those

positions with smart, skilled,

culturally-appropriate people, you may

find yourself facing an “Us vs. Them’

dilemma.

In lot of cases, talented college grads

will take low-level jobs in innovative

companies with the hope of becoming

a part of something bigger, Weir says.

But if they don’t see a path to

leadership or win a stake in the

business, it can become frustrating for

them and for the people they work

with – particularly if some employees

are treated differently than others.

In many companies, the first round of

employees received an ownership

stake in exchange for their hard work --

but later hires may not get the same

deal. Those second round employees

may put in just as much effort, but due

to timing and the roles they fill, they

get a paycheck, while their colleagues

await the big payday. “When you have

two classes of workers it can create a

really toxic environment,” he says.

Unless you are planning to give every

employee their own private piece of

the company, you need to

acknowledge the challenges you’ll face

as you add staff who have no real stake

in your future, and ask yourself whether

hiring an employee to finish every task

is the right choice for you.

Outsourcing Eases Growing Pains

One of the easiest ways to minimize

internal conflict and keep your core

team focused on the strategic goals of

your business is to outsource work that

doesn’t fall into your area of expertise,

says Drake. “You remove a lot of

tension from your company and

corporate culture when you

outsource.”

Outsourcing companies, like TaskUs,

take over non-core tasks like customer

support and a wide range of back

office processes, which can include

content moderation, lead generation,

transcription, accounting, payroll and

more. While the nature of the process

that companies like TaskUs can take on

varies, the benefit does not. Working

with an outsourcing partner can free

up company leaders and overwhelmed

staff and help company operations

become more efficient and effective.

Outsourcing to third party providers

can deliver a number of strategic and

cultural benefits for fast growing

companies:

1. Eliminate Recruiting Headaches

Trying to hire a large number of

employees in a short amount of time

can be distracting, expensive and a

waste of limited resources, Drake

argues. If a company is on a fast

growth track, however, they can’t risk

ignoring customers while trying to find

people to manage essential tasks like

customer service. That’s especially true

given the fact that the average

“wronged” customer will tell about

8-16 people about their negative

experience – and that’s not even

accounting for the social media effect.

By outsourcing these processes,

companies not only eliminate the

strain and risk associated with

recruiting, but also gain the peace of

mind that comes from knowing that

the job is being done well. The net

effect is liberating and crucial for

intelligent growth. “The more you

outsource, the more you can focus on

your core business, and hiring for your

core team,” Drake says.

2. Tap a Global Talent Pool

Filling every open position locally can

be both difficult and expensive,

especially for businesses

headquartered in high-rent locales like

New York City or San Francisco. It’s

also completely unnecessary, says

Thumbtack’s Daniels. “It turns out that

the city where your company is located

doesn’t have a global monopoly on

talent.”

From the beginning, Daniels decided

to keep his company’s core team of

engineers and leaders in-house

because they built the technology and

strategy behind the company’s

business. Then they outsourced

everything else. “San Francisco is one

of the most expensive places in the

country to live,” he notes. “We want

the best talent, but that doesn’t mean

we need to hire them here.”

Today, Thumbtack has 50 employees in

its San Francisco office, and 500

outsourced team members, most of

whom reside in the Philippines. “We’ve

found amazing talent at much lower

rates and they still make a great living

where they work,” he says.

3. Avoid Employee Conflict

Outsourcing non-core jobs can prevent

the “Us versus Them” environment by

ensuring everyone you hire has a

strategic role in the company, says

Maddock. Just because you need to

get a job done, doesn’t mean you

need to hire an employee to do it.

“You want to keep your core team

focused on creating value,” he says. It’s

a good yardstick for prioritizing

recruitment. If the work you need done

doesn’t add strategic value to the

business then it is a role that could

potentially be outsourced.

4. Maintain Competitive Agility

Growth is rarely a steady process, and

there can be many peaks and valleys

along the way. If you are always hiring

to accommodate the peaks, you may

end up with a lot of disengaged

employees when business falls off, says

Kate Vitasek, faculty at the University of

Tennessee College of Business

Founder of consulting firm Supply

Chain Visions, and innovator of the

Vested business model.

Or worse, as you grow the skills you

need change, causing you to outgrow

the capabilities or your current staff.

That can put you in the awkward

position of having to fire one set of

employees while recruiting another.

Outsourcing can help minimize those

ebbs and flows by allowing you to take

advantage of third party resources

when you need them, and dial back

those services when you don’t. “When

you outsource you get the talent you

need and they can scale with you,” she

says.

That helps companies stay agile, which

makes them more competitive.

5. Expand Your Knowledge Base

You may be great at what you do, but

that doesn’t mean you know

everything about business, says Drake.

“Outsourcing provides companies with

a fresh perspective and a chance to

learn from a group that knows more

than you,” he says.

You may find inspiration from a

consultant, or discover a more efficient

way of doing things by partnering with

a service provider who specializes in

managing these business processes.

“When you outsource it’s partly about

getting a job done, and partly about

looking for inspiration,” he says.

It’s also a great way to spread the word

about your business. “Every time you

outsource, more people learn about

you, which can open new doors,” he

says. “It’s another opportunity to

cross-collateralize.”

How to Choose

Outsourcing can help companies that

are managing the host of issues that

come with rapid growth. But as with

any business decision, an outsourcing

relationship has to be thoughtfully

vetted and carefully managed if it is

going to work, says Vitasek. “A lot of

processes make sense for outsourcing,

but if you are going to do it, you have

to do it right.”

Once you decide to outsource, your

first goal is to choose the right partner

for your needs. “You don’t want to be

their biggest client or their smallest,”

Weir advises. “And you do want to be

sure they have the talent, experience

and commitment to meet your needs.”

Before shopping for an outsourcing

partner, define the kind of workers you

want and the skills you want them to

have, Daniels says. For example, you

may require a team who speaks perfect

English and has strong writing skills, or

you may be seeking a specific

technical certification, or business

experience. “Knowing who you want

working for you will help you vet

whether partners can meet your

needs.”

And don’t just take their word for it,

Weir advises. “Talk to their past

clients, get references and ask hard

questions like ‘tell me about a time

when you made a mistake,” he says.

“How companies handle mistakes says

a lot about how they deal with tough

situations.”

You should also ask about their

managerial process, Daniels advises.

Outsourcers like TaskUs, for instance,

closely manage your outsourced team

as part of their service delivery process,

while others will give you access to

talent but don’t offer managerial

support.

If you have the time and inclination to

manage an outsource team in-house,

management services may not be

important, but if you are in growth

mode, you will need a company that

can oversee the outsourced operation

for you, according to Daniels.

Manage Outcomes not Activities

When you chose an outsourcing

partner, remember that they are the

expert and treat them accordingly,

Vitasek says. Companies that think

they know more than your outsourcer

tell them what to do, instead of

working with them to find the most

effective solution. But that often leads

to ineffective work. “It is better to give

them your desired outcome, and ask

them the best way to get there.”

You also need to take the time to

educate the people who will perform

the tasks about your company and

your business goals, Weir says. “When

they understand how their work is

connected to your success, they will be

more engaged in the deliverables.”

To ensure those deliverables are being

met, set clear parameters for success

that align with your business goals and

track them at least once a month,

Vitasek says. For example, if you

outsource a marketing campaign and

your strategic goal is to generate sales,

then measure the success of that

outsourced project based on increased

sales – not pages of marketing material

generated.

“Too often companies pay for

transactions – an hour of coding, or

cost per call – when what they really

want is results,” she says.

Finally, be prepared to spend some

extra time and attention on the

outsourcing project as it ramps up, and

make sure the outsourcing team has a

single point of contact in your

company to address any issues.

It takes time to build an outsourcing

relationship and make sure things are

operating smoothly, Maddock says.

“You’ve got to be prepared to invest in

the relationship, and work with that

team to get the best results.”

Page 3: Avoid the Pitfalls of Growth

For many businesses, rapid growth is

the Holy Grail. Eager entrepreneurs

envision their companies rising up

from anonymity to take their rightful

place on the Inc. 100 list, expanding

rapidly from a mid-sized firm to a

multi-billion dollar organization in a

matter of months.

It’s not a far-fetched idea – especially in

the tech industry. These days it may

seem like every startup with a bright

idea is going from obscure to global

giant overnight, but the reality is that

for every success story there are

hundreds of failures. Many emerging

growth companies may start on the

same track, but what differentiates

successful companies from failed

enterprises is how well company

leadership can maintain the integrity of

the strategic vision. Rapid growth can

often monopolize leadership’s time

forcing leaders to get caught up in the

day-to-day challenges and causing

companies to veer off track. And just

like that, rapid growth can turn into

rapid decline.

There are ways to avoid the crash,

however. Smart companies looking for

long-term sustainability figure out early

on that managing growth requires

discipline, focus and being open to

input. These companies know that

guarding corporate culture, prioritizing

activities, methodical hiring, guidance

from outside experts and working with

partners to hand off tasks that don’t

deliver core value are all part of the

toolkit for successful growth.

Culture and the Art of Growth

“The first rule of growth is to accept

that change is going to happen,” says

Bryce Maddock, co-founder of TaskUs.

“[Change] is inevitable, so all you can

do is plan for it.”

Growth – and the change it unleashes

– can pose a significant challenge to

the health and wellbeing of any

mid-sized business (revenues of

$5MM-$150MM). Culture, operations

and profitability can all be negatively

impacted if the organization does not

adequately plan for this change.

Ideally, growing companies find a

balance between accommodating

increased business flow and

maintaining the culture and core

competencies that gave them a

competitive edge in the first place.

Maintaining culture may not seem like

a priority at a time when a business

should be focused on quantitative

growth, but it is. Entrepreneurs spend

a lot of time creating a workplace that

will foster creativity, innovation and

partnership. Indeed, culture is one of

the most important aspects of a

business, and it is often the thing that

inspires the first round of employees to

invest their time and sweat equity in

building the business.

“The only thing of real importance that

leaders do is to create and manage

culture,” Edgar Schein, Professor at

MIT’s Sloan School of Management

once famously said. “If you do not

manage culture, it manages you.”

Many business leaders understand this

idea in theory. But when their

companies hit a growth trend they get

so caught up in growing to meet the

challenge, they fail to see how growth

is affecting the culture. And that is

when it falls apart, says David Drake,

founder of LDJ Capital, an investment

equity firm in New York. “Company

leaders have to be proactive in

building the culture of the company,

but when you grow too fast you can

easily lose control.”

Pressure on employees to produce

more, coupled with rapid hiring and

over stretched resources, can

transform a great place to work into a

place where leaders spend much of

their time putting out fires and dealing

with conflicts that can cause good

employees to move on.

To prevent that from happening,

company leaders need to ask

themselves three questions:

1.What do we love about our

culture?

2.How does our culture define us?

3.How do we scale the most

important aspects of our culture?

The third question can often be the

trickiest, because the little

extravagances – free soda in the

company fridge, or picking up dinner

to celebrate the end of a project – are

the kinds of perks that small teams

love. But that generosity can get out of

control when you have hundreds of

employees.

Business leaders need to understand

the motivations that drive culture – it’s

not about free drinks, it is about

acknowledging that your team is going

above and beyond for your success.

Once you understand the sentiment,

you can try to adapt your strategies to

accommodate growth, says Jaspar

Weir, president of TaskUs.

One of the hardest parts of this

transitional phase is delegating

authority, he says. “A lot of

entrepreneurs struggle to give up

control when their companies grow.”

Weir understands this challenge first

hand. TaskUs has experienced 100%

growth in the last year, and has been

on the Inc. 500|5000 list two years in a

row. It is an exciting time for the

company, but it has been challenging

to adapt, Weir admits.

“When we had 20 employees I had a

hand in every project,” he says. Now,

with more than 1100 employees, and

clients across the country, he can’t

manage the business in the same way.

“I have to trust others to take the lead

on those projects, so I can make the

right decisions for the company.”

Us vs. Them

Hiring is another key activity that

business leaders struggle with during

periods of rapid growth.

For rapidly growing companies, finding

talent can become an all-consuming

task that distracts leaders from the

more strategic goals of the business,

says Sander Daniels, founder and CEO

of Thumbtack, a provider of local

service professionals for consumer

jobs. “The best place to find talent is

your personal network, but if you need

to hire a lot of people fast, your

network won’t be enough.”

Ultimately, outfitting a 25-person

customer service team, or filling myriad

lower level positions that are vital to

running the business but not a part of

your core value proposition, is not a

good use of time or resources.

“The more time you spend hunting for

talent, the less time you have to drive

your business,” Daniels says.

It can be tempting to throw warm

bodies into chairs just to solve the

latest problem. But that’s a risky

approach as a few bad hires can

disrupt the entire organization, driving

turnover among top performers while

the laggards stay on board.

And even if you are able to fill those

positions with smart, skilled,

culturally-appropriate people, you may

find yourself facing an “Us vs. Them’

dilemma.

In lot of cases, talented college grads

will take low-level jobs in innovative

companies with the hope of becoming

a part of something bigger, Weir says.

But if they don’t see a path to

leadership or win a stake in the

business, it can become frustrating for

them and for the people they work

with – particularly if some employees

are treated differently than others.

In many companies, the first round of

employees received an ownership

stake in exchange for their hard work --

but later hires may not get the same

deal. Those second round employees

may put in just as much effort, but due

to timing and the roles they fill, they

get a paycheck, while their colleagues

await the big payday. “When you have

two classes of workers it can create a

really toxic environment,” he says.

Unless you are planning to give every

employee their own private piece of

the company, you need to

acknowledge the challenges you’ll face

as you add staff who have no real stake

in your future, and ask yourself whether

hiring an employee to finish every task

is the right choice for you.

Outsourcing Eases Growing Pains

One of the easiest ways to minimize

internal conflict and keep your core

team focused on the strategic goals of

your business is to outsource work that

doesn’t fall into your area of expertise,

says Drake. “You remove a lot of

tension from your company and

corporate culture when you

outsource.”

Outsourcing companies, like TaskUs,

take over non-core tasks like customer

support and a wide range of back

office processes, which can include

content moderation, lead generation,

transcription, accounting, payroll and

more. While the nature of the process

that companies like TaskUs can take on

varies, the benefit does not. Working

with an outsourcing partner can free

up company leaders and overwhelmed

staff and help company operations

become more efficient and effective.

Outsourcing to third party providers

can deliver a number of strategic and

cultural benefits for fast growing

companies:

1. Eliminate Recruiting Headaches

Trying to hire a large number of

employees in a short amount of time

can be distracting, expensive and a

waste of limited resources, Drake

argues. If a company is on a fast

growth track, however, they can’t risk

ignoring customers while trying to find

people to manage essential tasks like

customer service. That’s especially true

given the fact that the average

“wronged” customer will tell about

8-16 people about their negative

experience – and that’s not even

accounting for the social media effect.

By outsourcing these processes,

companies not only eliminate the

strain and risk associated with

recruiting, but also gain the peace of

mind that comes from knowing that

the job is being done well. The net

effect is liberating and crucial for

intelligent growth. “The more you

outsource, the more you can focus on

your core business, and hiring for your

core team,” Drake says.

2. Tap a Global Talent Pool

Filling every open position locally can

be both difficult and expensive,

especially for businesses

headquartered in high-rent locales like

New York City or San Francisco. It’s

also completely unnecessary, says

Thumbtack’s Daniels. “It turns out that

the city where your company is located

doesn’t have a global monopoly on

talent.”

From the beginning, Daniels decided

to keep his company’s core team of

engineers and leaders in-house

because they built the technology and

strategy behind the company’s

business. Then they outsourced

everything else. “San Francisco is one

of the most expensive places in the

country to live,” he notes. “We want

the best talent, but that doesn’t mean

we need to hire them here.”

Today, Thumbtack has 50 employees in

its San Francisco office, and 500

outsourced team members, most of

whom reside in the Philippines. “We’ve

found amazing talent at much lower

rates and they still make a great living

where they work,” he says.

3. Avoid Employee Conflict

Outsourcing non-core jobs can prevent

the “Us versus Them” environment by

ensuring everyone you hire has a

strategic role in the company, says

Maddock. Just because you need to

get a job done, doesn’t mean you

need to hire an employee to do it.

“You want to keep your core team

focused on creating value,” he says. It’s

a good yardstick for prioritizing

recruitment. If the work you need done

doesn’t add strategic value to the

business then it is a role that could

potentially be outsourced.

4. Maintain Competitive Agility

Growth is rarely a steady process, and

there can be many peaks and valleys

along the way. If you are always hiring

to accommodate the peaks, you may

end up with a lot of disengaged

employees when business falls off, says

Kate Vitasek, faculty at the University of

Tennessee College of Business

Founder of consulting firm Supply

Chain Visions, and innovator of the

Vested business model.

Or worse, as you grow the skills you

need change, causing you to outgrow

the capabilities or your current staff.

That can put you in the awkward

position of having to fire one set of

employees while recruiting another.

Outsourcing can help minimize those

ebbs and flows by allowing you to take

advantage of third party resources

when you need them, and dial back

those services when you don’t. “When

you outsource you get the talent you

need and they can scale with you,” she

says.

That helps companies stay agile, which

makes them more competitive.

5. Expand Your Knowledge Base

You may be great at what you do, but

that doesn’t mean you know

everything about business, says Drake.

“Outsourcing provides companies with

a fresh perspective and a chance to

learn from a group that knows more

than you,” he says.

You may find inspiration from a

consultant, or discover a more efficient

way of doing things by partnering with

a service provider who specializes in

managing these business processes.

“When you outsource it’s partly about

getting a job done, and partly about

looking for inspiration,” he says.

It’s also a great way to spread the word

about your business. “Every time you

outsource, more people learn about

you, which can open new doors,” he

says. “It’s another opportunity to

cross-collateralize.”

How to Choose

Outsourcing can help companies that

are managing the host of issues that

come with rapid growth. But as with

any business decision, an outsourcing

relationship has to be thoughtfully

vetted and carefully managed if it is

going to work, says Vitasek. “A lot of

processes make sense for outsourcing,

but if you are going to do it, you have

to do it right.”

Once you decide to outsource, your

first goal is to choose the right partner

for your needs. “You don’t want to be

their biggest client or their smallest,”

Weir advises. “And you do want to be

sure they have the talent, experience

and commitment to meet your needs.”

Before shopping for an outsourcing

partner, define the kind of workers you

want and the skills you want them to

have, Daniels says. For example, you

may require a team who speaks perfect

English and has strong writing skills, or

you may be seeking a specific

technical certification, or business

experience. “Knowing who you want

working for you will help you vet

whether partners can meet your

needs.”

And don’t just take their word for it,

Weir advises. “Talk to their past

clients, get references and ask hard

questions like ‘tell me about a time

when you made a mistake,” he says.

“How companies handle mistakes says

a lot about how they deal with tough

situations.”

You should also ask about their

managerial process, Daniels advises.

Outsourcers like TaskUs, for instance,

closely manage your outsourced team

as part of their service delivery process,

while others will give you access to

talent but don’t offer managerial

support.

If you have the time and inclination to

manage an outsource team in-house,

management services may not be

important, but if you are in growth

mode, you will need a company that

can oversee the outsourced operation

for you, according to Daniels.

Manage Outcomes not Activities

When you chose an outsourcing

partner, remember that they are the

expert and treat them accordingly,

Vitasek says. Companies that think

they know more than your outsourcer

tell them what to do, instead of

working with them to find the most

effective solution. But that often leads

to ineffective work. “It is better to give

them your desired outcome, and ask

them the best way to get there.”

You also need to take the time to

educate the people who will perform

the tasks about your company and

your business goals, Weir says. “When

they understand how their work is

connected to your success, they will be

more engaged in the deliverables.”

To ensure those deliverables are being

met, set clear parameters for success

that align with your business goals and

track them at least once a month,

Vitasek says. For example, if you

outsource a marketing campaign and

your strategic goal is to generate sales,

then measure the success of that

outsourced project based on increased

sales – not pages of marketing material

generated.

“Too often companies pay for

transactions – an hour of coding, or

cost per call – when what they really

want is results,” she says.

Finally, be prepared to spend some

extra time and attention on the

outsourcing project as it ramps up, and

make sure the outsourcing team has a

single point of contact in your

company to address any issues.

It takes time to build an outsourcing

relationship and make sure things are

operating smoothly, Maddock says.

“You’ve got to be prepared to invest in

the relationship, and work with that

team to get the best results.”

Page 4: Avoid the Pitfalls of Growth

For many businesses, rapid growth is

the Holy Grail. Eager entrepreneurs

envision their companies rising up

from anonymity to take their rightful

place on the Inc. 100 list, expanding

rapidly from a mid-sized firm to a

multi-billion dollar organization in a

matter of months.

It’s not a far-fetched idea – especially in

the tech industry. These days it may

seem like every startup with a bright

idea is going from obscure to global

giant overnight, but the reality is that

for every success story there are

hundreds of failures. Many emerging

growth companies may start on the

same track, but what differentiates

successful companies from failed

enterprises is how well company

leadership can maintain the integrity of

the strategic vision. Rapid growth can

often monopolize leadership’s time

forcing leaders to get caught up in the

day-to-day challenges and causing

companies to veer off track. And just

like that, rapid growth can turn into

rapid decline.

There are ways to avoid the crash,

however. Smart companies looking for

long-term sustainability figure out early

on that managing growth requires

discipline, focus and being open to

input. These companies know that

guarding corporate culture, prioritizing

activities, methodical hiring, guidance

from outside experts and working with

partners to hand off tasks that don’t

deliver core value are all part of the

toolkit for successful growth.

Culture and the Art of Growth

“The first rule of growth is to accept

that change is going to happen,” says

Bryce Maddock, co-founder of TaskUs.

“[Change] is inevitable, so all you can

do is plan for it.”

Growth – and the change it unleashes

– can pose a significant challenge to

the health and wellbeing of any

mid-sized business (revenues of

$5MM-$150MM). Culture, operations

and profitability can all be negatively

impacted if the organization does not

adequately plan for this change.

Ideally, growing companies find a

balance between accommodating

increased business flow and

maintaining the culture and core

competencies that gave them a

competitive edge in the first place.

Maintaining culture may not seem like

a priority at a time when a business

should be focused on quantitative

growth, but it is. Entrepreneurs spend

a lot of time creating a workplace that

will foster creativity, innovation and

partnership. Indeed, culture is one of

the most important aspects of a

business, and it is often the thing that

inspires the first round of employees to

invest their time and sweat equity in

building the business.

“The only thing of real importance that

leaders do is to create and manage

culture,” Edgar Schein, Professor at

MIT’s Sloan School of Management

once famously said. “If you do not

manage culture, it manages you.”

Many business leaders understand this

idea in theory. But when their

companies hit a growth trend they get

so caught up in growing to meet the

challenge, they fail to see how growth

is affecting the culture. And that is

when it falls apart, says David Drake,

founder of LDJ Capital, an investment

equity firm in New York. “Company

leaders have to be proactive in

building the culture of the company,

but when you grow too fast you can

easily lose control.”

Pressure on employees to produce

more, coupled with rapid hiring and

over stretched resources, can

transform a great place to work into a

place where leaders spend much of

their time putting out fires and dealing

with conflicts that can cause good

employees to move on.

To prevent that from happening,

company leaders need to ask

themselves three questions:

1.What do we love about our

culture?

2.How does our culture define us?

3.How do we scale the most

important aspects of our culture?

The third question can often be the

trickiest, because the little

extravagances – free soda in the

company fridge, or picking up dinner

to celebrate the end of a project – are

the kinds of perks that small teams

love. But that generosity can get out of

control when you have hundreds of

employees.

Business leaders need to understand

the motivations that drive culture – it’s

not about free drinks, it is about

acknowledging that your team is going

above and beyond for your success.

Once you understand the sentiment,

you can try to adapt your strategies to

accommodate growth, says Jaspar

Weir, president of TaskUs.

One of the hardest parts of this

transitional phase is delegating

authority, he says. “A lot of

entrepreneurs struggle to give up

control when their companies grow.”

Weir understands this challenge first

hand. TaskUs has experienced 100%

growth in the last year, and has been

on the Inc. 500|5000 list two years in a

row. It is an exciting time for the

company, but it has been challenging

to adapt, Weir admits.

“When we had 20 employees I had a

hand in every project,” he says. Now,

with more than 1100 employees, and

clients across the country, he can’t

manage the business in the same way.

“I have to trust others to take the lead

on those projects, so I can make the

right decisions for the company.”

Us vs. Them

Hiring is another key activity that

business leaders struggle with during

periods of rapid growth.

For rapidly growing companies, finding

talent can become an all-consuming

task that distracts leaders from the

more strategic goals of the business,

says Sander Daniels, founder and CEO

of Thumbtack, a provider of local

service professionals for consumer

jobs. “The best place to find talent is

your personal network, but if you need

to hire a lot of people fast, your

network won’t be enough.”

Ultimately, outfitting a 25-person

customer service team, or filling myriad

lower level positions that are vital to

running the business but not a part of

your core value proposition, is not a

good use of time or resources.

“The more time you spend hunting for

talent, the less time you have to drive

your business,” Daniels says.

It can be tempting to throw warm

bodies into chairs just to solve the

latest problem. But that’s a risky

approach as a few bad hires can

disrupt the entire organization, driving

turnover among top performers while

the laggards stay on board.

And even if you are able to fill those

positions with smart, skilled,

culturally-appropriate people, you may

find yourself facing an “Us vs. Them’

dilemma.

In lot of cases, talented college grads

will take low-level jobs in innovative

companies with the hope of becoming

a part of something bigger, Weir says.

But if they don’t see a path to

leadership or win a stake in the

business, it can become frustrating for

them and for the people they work

with – particularly if some employees

are treated differently than others.

In many companies, the first round of

employees received an ownership

stake in exchange for their hard work --

but later hires may not get the same

deal. Those second round employees

may put in just as much effort, but due

to timing and the roles they fill, they

get a paycheck, while their colleagues

await the big payday. “When you have

two classes of workers it can create a

really toxic environment,” he says.

Unless you are planning to give every

employee their own private piece of

the company, you need to

acknowledge the challenges you’ll face

as you add staff who have no real stake

in your future, and ask yourself whether

hiring an employee to finish every task

is the right choice for you.

Outsourcing Eases Growing Pains

One of the easiest ways to minimize

internal conflict and keep your core

team focused on the strategic goals of

your business is to outsource work that

doesn’t fall into your area of expertise,

says Drake. “You remove a lot of

tension from your company and

corporate culture when you

outsource.”

Outsourcing companies, like TaskUs,

take over non-core tasks like customer

support and a wide range of back

office processes, which can include

content moderation, lead generation,

transcription, accounting, payroll and

more. While the nature of the process

that companies like TaskUs can take on

varies, the benefit does not. Working

with an outsourcing partner can free

up company leaders and overwhelmed

staff and help company operations

become more efficient and effective.

Outsourcing to third party providers

can deliver a number of strategic and

cultural benefits for fast growing

companies:

1. Eliminate Recruiting Headaches

Trying to hire a large number of

employees in a short amount of time

can be distracting, expensive and a

waste of limited resources, Drake

argues. If a company is on a fast

growth track, however, they can’t risk

ignoring customers while trying to find

people to manage essential tasks like

customer service. That’s especially true

given the fact that the average

“wronged” customer will tell about

8-16 people about their negative

experience – and that’s not even

accounting for the social media effect.

By outsourcing these processes,

companies not only eliminate the

strain and risk associated with

recruiting, but also gain the peace of

mind that comes from knowing that

the job is being done well. The net

effect is liberating and crucial for

intelligent growth. “The more you

outsource, the more you can focus on

your core business, and hiring for your

core team,” Drake says.

2. Tap a Global Talent Pool

Filling every open position locally can

be both difficult and expensive,

especially for businesses

headquartered in high-rent locales like

New York City or San Francisco. It’s

also completely unnecessary, says

Thumbtack’s Daniels. “It turns out that

the city where your company is located

doesn’t have a global monopoly on

talent.”

From the beginning, Daniels decided

to keep his company’s core team of

engineers and leaders in-house

because they built the technology and

strategy behind the company’s

business. Then they outsourced

everything else. “San Francisco is one

of the most expensive places in the

country to live,” he notes. “We want

the best talent, but that doesn’t mean

we need to hire them here.”

Today, Thumbtack has 50 employees in

its San Francisco office, and 500

outsourced team members, most of

whom reside in the Philippines. “We’ve

found amazing talent at much lower

rates and they still make a great living

where they work,” he says.

3. Avoid Employee Conflict

Outsourcing non-core jobs can prevent

the “Us versus Them” environment by

ensuring everyone you hire has a

strategic role in the company, says

Maddock. Just because you need to

get a job done, doesn’t mean you

need to hire an employee to do it.

“You want to keep your core team

focused on creating value,” he says. It’s

a good yardstick for prioritizing

recruitment. If the work you need done

doesn’t add strategic value to the

business then it is a role that could

potentially be outsourced.

4. Maintain Competitive Agility

Growth is rarely a steady process, and

there can be many peaks and valleys

along the way. If you are always hiring

to accommodate the peaks, you may

end up with a lot of disengaged

employees when business falls off, says

Kate Vitasek, faculty at the University of

Tennessee College of Business

Founder of consulting firm Supply

Chain Visions, and innovator of the

Vested business model.

Or worse, as you grow the skills you

need change, causing you to outgrow

the capabilities or your current staff.

That can put you in the awkward

position of having to fire one set of

employees while recruiting another.

Outsourcing can help minimize those

ebbs and flows by allowing you to take

advantage of third party resources

when you need them, and dial back

those services when you don’t. “When

you outsource you get the talent you

need and they can scale with you,” she

says.

That helps companies stay agile, which

makes them more competitive.

5. Expand Your Knowledge Base

You may be great at what you do, but

that doesn’t mean you know

everything about business, says Drake.

“Outsourcing provides companies with

a fresh perspective and a chance to

learn from a group that knows more

than you,” he says.

You may find inspiration from a

consultant, or discover a more efficient

way of doing things by partnering with

a service provider who specializes in

managing these business processes.

“When you outsource it’s partly about

getting a job done, and partly about

looking for inspiration,” he says.

It’s also a great way to spread the word

about your business. “Every time you

outsource, more people learn about

you, which can open new doors,” he

says. “It’s another opportunity to

cross-collateralize.”

How to Choose

Outsourcing can help companies that

are managing the host of issues that

come with rapid growth. But as with

any business decision, an outsourcing

relationship has to be thoughtfully

vetted and carefully managed if it is

going to work, says Vitasek. “A lot of

processes make sense for outsourcing,

but if you are going to do it, you have

to do it right.”

Once you decide to outsource, your

first goal is to choose the right partner

for your needs. “You don’t want to be

their biggest client or their smallest,”

Weir advises. “And you do want to be

sure they have the talent, experience

and commitment to meet your needs.”

Before shopping for an outsourcing

partner, define the kind of workers you

want and the skills you want them to

have, Daniels says. For example, you

may require a team who speaks perfect

English and has strong writing skills, or

you may be seeking a specific

technical certification, or business

experience. “Knowing who you want

working for you will help you vet

whether partners can meet your

needs.”

And don’t just take their word for it,

Weir advises. “Talk to their past

clients, get references and ask hard

questions like ‘tell me about a time

when you made a mistake,” he says.

“How companies handle mistakes says

a lot about how they deal with tough

situations.”

You should also ask about their

managerial process, Daniels advises.

Outsourcers like TaskUs, for instance,

closely manage your outsourced team

as part of their service delivery process,

while others will give you access to

talent but don’t offer managerial

support.

If you have the time and inclination to

manage an outsource team in-house,

management services may not be

important, but if you are in growth

mode, you will need a company that

can oversee the outsourced operation

for you, according to Daniels.

Manage Outcomes not Activities

When you chose an outsourcing

partner, remember that they are the

expert and treat them accordingly,

Vitasek says. Companies that think

they know more than your outsourcer

tell them what to do, instead of

working with them to find the most

effective solution. But that often leads

to ineffective work. “It is better to give

them your desired outcome, and ask

them the best way to get there.”

You also need to take the time to

educate the people who will perform

the tasks about your company and

your business goals, Weir says. “When

they understand how their work is

connected to your success, they will be

more engaged in the deliverables.”

To ensure those deliverables are being

met, set clear parameters for success

that align with your business goals and

track them at least once a month,

Vitasek says. For example, if you

outsource a marketing campaign and

your strategic goal is to generate sales,

then measure the success of that

outsourced project based on increased

sales – not pages of marketing material

generated.

“Too often companies pay for

transactions – an hour of coding, or

cost per call – when what they really

want is results,” she says.

Finally, be prepared to spend some

extra time and attention on the

outsourcing project as it ramps up, and

make sure the outsourcing team has a

single point of contact in your

company to address any issues.

It takes time to build an outsourcing

relationship and make sure things are

operating smoothly, Maddock says.

“You’ve got to be prepared to invest in

the relationship, and work with that

team to get the best results.”

Page 5: Avoid the Pitfalls of Growth

For many businesses, rapid growth is

the Holy Grail. Eager entrepreneurs

envision their companies rising up

from anonymity to take their rightful

place on the Inc. 100 list, expanding

rapidly from a mid-sized firm to a

multi-billion dollar organization in a

matter of months.

It’s not a far-fetched idea – especially in

the tech industry. These days it may

seem like every startup with a bright

idea is going from obscure to global

giant overnight, but the reality is that

for every success story there are

hundreds of failures. Many emerging

growth companies may start on the

same track, but what differentiates

successful companies from failed

enterprises is how well company

leadership can maintain the integrity of

the strategic vision. Rapid growth can

often monopolize leadership’s time

forcing leaders to get caught up in the

day-to-day challenges and causing

companies to veer off track. And just

like that, rapid growth can turn into

rapid decline.

There are ways to avoid the crash,

however. Smart companies looking for

long-term sustainability figure out early

on that managing growth requires

discipline, focus and being open to

input. These companies know that

guarding corporate culture, prioritizing

activities, methodical hiring, guidance

from outside experts and working with

partners to hand off tasks that don’t

deliver core value are all part of the

toolkit for successful growth.

Culture and the Art of Growth

“The first rule of growth is to accept

that change is going to happen,” says

Bryce Maddock, co-founder of TaskUs.

“[Change] is inevitable, so all you can

do is plan for it.”

Growth – and the change it unleashes

– can pose a significant challenge to

the health and wellbeing of any

mid-sized business (revenues of

$5MM-$150MM). Culture, operations

and profitability can all be negatively

impacted if the organization does not

adequately plan for this change.

Ideally, growing companies find a

balance between accommodating

increased business flow and

maintaining the culture and core

competencies that gave them a

competitive edge in the first place.

Maintaining culture may not seem like

a priority at a time when a business

should be focused on quantitative

growth, but it is. Entrepreneurs spend

a lot of time creating a workplace that

will foster creativity, innovation and

partnership. Indeed, culture is one of

the most important aspects of a

business, and it is often the thing that

inspires the first round of employees to

invest their time and sweat equity in

building the business.

“The only thing of real importance that

leaders do is to create and manage

culture,” Edgar Schein, Professor at

MIT’s Sloan School of Management

once famously said. “If you do not

manage culture, it manages you.”

Many business leaders understand this

idea in theory. But when their

companies hit a growth trend they get

so caught up in growing to meet the

challenge, they fail to see how growth

is affecting the culture. And that is

when it falls apart, says David Drake,

founder of LDJ Capital, an investment

equity firm in New York. “Company

leaders have to be proactive in

building the culture of the company,

but when you grow too fast you can

easily lose control.”

Pressure on employees to produce

more, coupled with rapid hiring and

over stretched resources, can

transform a great place to work into a

place where leaders spend much of

their time putting out fires and dealing

with conflicts that can cause good

employees to move on.

To prevent that from happening,

company leaders need to ask

themselves three questions:

1.What do we love about our

culture?

2.How does our culture define us?

3.How do we scale the most

important aspects of our culture?

The third question can often be the

trickiest, because the little

extravagances – free soda in the

company fridge, or picking up dinner

to celebrate the end of a project – are

the kinds of perks that small teams

love. But that generosity can get out of

control when you have hundreds of

employees.

Business leaders need to understand

the motivations that drive culture – it’s

not about free drinks, it is about

acknowledging that your team is going

above and beyond for your success.

Once you understand the sentiment,

you can try to adapt your strategies to

accommodate growth, says Jaspar

Weir, president of TaskUs.

One of the hardest parts of this

transitional phase is delegating

authority, he says. “A lot of

entrepreneurs struggle to give up

control when their companies grow.”

Weir understands this challenge first

hand. TaskUs has experienced 100%

growth in the last year, and has been

on the Inc. 500|5000 list two years in a

row. It is an exciting time for the

company, but it has been challenging

to adapt, Weir admits.

“When we had 20 employees I had a

hand in every project,” he says. Now,

with more than 1100 employees, and

clients across the country, he can’t

manage the business in the same way.

“I have to trust others to take the lead

on those projects, so I can make the

right decisions for the company.”

Us vs. Them

Hiring is another key activity that

business leaders struggle with during

periods of rapid growth.

For rapidly growing companies, finding

talent can become an all-consuming

task that distracts leaders from the

more strategic goals of the business,

says Sander Daniels, founder and CEO

of Thumbtack, a provider of local

service professionals for consumer

jobs. “The best place to find talent is

your personal network, but if you need

to hire a lot of people fast, your

network won’t be enough.”

Ultimately, outfitting a 25-person

customer service team, or filling myriad

lower level positions that are vital to

running the business but not a part of

your core value proposition, is not a

good use of time or resources.

“The more time you spend hunting for

talent, the less time you have to drive

your business,” Daniels says.

It can be tempting to throw warm

bodies into chairs just to solve the

latest problem. But that’s a risky

approach as a few bad hires can

disrupt the entire organization, driving

turnover among top performers while

the laggards stay on board.

And even if you are able to fill those

positions with smart, skilled,

culturally-appropriate people, you may

find yourself facing an “Us vs. Them’

dilemma.

In lot of cases, talented college grads

will take low-level jobs in innovative

companies with the hope of becoming

a part of something bigger, Weir says.

But if they don’t see a path to

leadership or win a stake in the

business, it can become frustrating for

them and for the people they work

with – particularly if some employees

are treated differently than others.

In many companies, the first round of

employees received an ownership

stake in exchange for their hard work --

but later hires may not get the same

deal. Those second round employees

may put in just as much effort, but due

to timing and the roles they fill, they

get a paycheck, while their colleagues

await the big payday. “When you have

two classes of workers it can create a

really toxic environment,” he says.

Unless you are planning to give every

employee their own private piece of

the company, you need to

acknowledge the challenges you’ll face

as you add staff who have no real stake

in your future, and ask yourself whether

hiring an employee to finish every task

is the right choice for you.

Outsourcing Eases Growing Pains

One of the easiest ways to minimize

internal conflict and keep your core

team focused on the strategic goals of

your business is to outsource work that

doesn’t fall into your area of expertise,

says Drake. “You remove a lot of

tension from your company and

corporate culture when you

outsource.”

Outsourcing companies, like TaskUs,

take over non-core tasks like customer

support and a wide range of back

office processes, which can include

content moderation, lead generation,

transcription, accounting, payroll and

more. While the nature of the process

that companies like TaskUs can take on

varies, the benefit does not. Working

with an outsourcing partner can free

up company leaders and overwhelmed

staff and help company operations

become more efficient and effective.

Outsourcing to third party providers

can deliver a number of strategic and

cultural benefits for fast growing

companies:

1. Eliminate Recruiting Headaches

Trying to hire a large number of

employees in a short amount of time

can be distracting, expensive and a

waste of limited resources, Drake

argues. If a company is on a fast

growth track, however, they can’t risk

ignoring customers while trying to find

people to manage essential tasks like

customer service. That’s especially true

given the fact that the average

“wronged” customer will tell about

8-16 people about their negative

experience – and that’s not even

accounting for the social media effect.

By outsourcing these processes,

companies not only eliminate the

strain and risk associated with

recruiting, but also gain the peace of

mind that comes from knowing that

the job is being done well. The net

effect is liberating and crucial for

intelligent growth. “The more you

outsource, the more you can focus on

your core business, and hiring for your

core team,” Drake says.

2. Tap a Global Talent Pool

Filling every open position locally can

be both difficult and expensive,

especially for businesses

headquartered in high-rent locales like

New York City or San Francisco. It’s

also completely unnecessary, says

Thumbtack’s Daniels. “It turns out that

the city where your company is located

doesn’t have a global monopoly on

talent.”

From the beginning, Daniels decided

to keep his company’s core team of

engineers and leaders in-house

because they built the technology and

strategy behind the company’s

business. Then they outsourced

everything else. “San Francisco is one

of the most expensive places in the

country to live,” he notes. “We want

the best talent, but that doesn’t mean

we need to hire them here.”

Today, Thumbtack has 50 employees in

its San Francisco office, and 500

outsourced team members, most of

whom reside in the Philippines. “We’ve

found amazing talent at much lower

rates and they still make a great living

where they work,” he says.

3. Avoid Employee Conflict

Outsourcing non-core jobs can prevent

the “Us versus Them” environment by

ensuring everyone you hire has a

strategic role in the company, says

Maddock. Just because you need to

get a job done, doesn’t mean you

need to hire an employee to do it.

“You want to keep your core team

focused on creating value,” he says. It’s

a good yardstick for prioritizing

recruitment. If the work you need done

doesn’t add strategic value to the

business then it is a role that could

potentially be outsourced.

4. Maintain Competitive Agility

Growth is rarely a steady process, and

there can be many peaks and valleys

along the way. If you are always hiring

to accommodate the peaks, you may

end up with a lot of disengaged

employees when business falls off, says

Kate Vitasek, faculty at the University of

Tennessee College of Business

Founder of consulting firm Supply

Chain Visions, and innovator of the

Vested business model.

Or worse, as you grow the skills you

need change, causing you to outgrow

the capabilities or your current staff.

That can put you in the awkward

position of having to fire one set of

employees while recruiting another.

Outsourcing can help minimize those

ebbs and flows by allowing you to take

advantage of third party resources

when you need them, and dial back

those services when you don’t. “When

you outsource you get the talent you

need and they can scale with you,” she

says.

That helps companies stay agile, which

makes them more competitive.

5. Expand Your Knowledge Base

You may be great at what you do, but

that doesn’t mean you know

everything about business, says Drake.

“Outsourcing provides companies with

a fresh perspective and a chance to

learn from a group that knows more

than you,” he says.

You may find inspiration from a

consultant, or discover a more efficient

way of doing things by partnering with

a service provider who specializes in

managing these business processes.

“When you outsource it’s partly about

getting a job done, and partly about

looking for inspiration,” he says.

It’s also a great way to spread the word

about your business. “Every time you

outsource, more people learn about

you, which can open new doors,” he

says. “It’s another opportunity to

cross-collateralize.”

How to Choose

Outsourcing can help companies that

are managing the host of issues that

come with rapid growth. But as with

any business decision, an outsourcing

relationship has to be thoughtfully

vetted and carefully managed if it is

going to work, says Vitasek. “A lot of

processes make sense for outsourcing,

but if you are going to do it, you have

to do it right.”

Once you decide to outsource, your

first goal is to choose the right partner

for your needs. “You don’t want to be

their biggest client or their smallest,”

Weir advises. “And you do want to be

sure they have the talent, experience

and commitment to meet your needs.”

Before shopping for an outsourcing

partner, define the kind of workers you

want and the skills you want them to

have, Daniels says. For example, you

may require a team who speaks perfect

English and has strong writing skills, or

you may be seeking a specific

technical certification, or business

experience. “Knowing who you want

working for you will help you vet

whether partners can meet your

needs.”

And don’t just take their word for it,

Weir advises. “Talk to their past

clients, get references and ask hard

questions like ‘tell me about a time

when you made a mistake,” he says.

“How companies handle mistakes says

a lot about how they deal with tough

situations.”

You should also ask about their

managerial process, Daniels advises.

Outsourcers like TaskUs, for instance,

closely manage your outsourced team

as part of their service delivery process,

while others will give you access to

talent but don’t offer managerial

support.

If you have the time and inclination to

manage an outsource team in-house,

management services may not be

important, but if you are in growth

mode, you will need a company that

can oversee the outsourced operation

for you, according to Daniels.

Manage Outcomes not Activities

When you chose an outsourcing

partner, remember that they are the

expert and treat them accordingly,

Vitasek says. Companies that think

they know more than your outsourcer

tell them what to do, instead of

working with them to find the most

effective solution. But that often leads

to ineffective work. “It is better to give

them your desired outcome, and ask

them the best way to get there.”

You also need to take the time to

educate the people who will perform

the tasks about your company and

your business goals, Weir says. “When

they understand how their work is

connected to your success, they will be

more engaged in the deliverables.”

To ensure those deliverables are being

met, set clear parameters for success

that align with your business goals and

track them at least once a month,

Vitasek says. For example, if you

outsource a marketing campaign and

your strategic goal is to generate sales,

then measure the success of that

outsourced project based on increased

sales – not pages of marketing material

generated.

“Too often companies pay for

transactions – an hour of coding, or

cost per call – when what they really

want is results,” she says.

Finally, be prepared to spend some

extra time and attention on the

outsourcing project as it ramps up, and

make sure the outsourcing team has a

single point of contact in your

company to address any issues.

It takes time to build an outsourcing

relationship and make sure things are

operating smoothly, Maddock says.

“You’ve got to be prepared to invest in

the relationship, and work with that

team to get the best results.”