How to Scale What’s Working at Your Company

0:20Welcome to HBR on Leadership. These episodes are case studies and conversations with the world's top business and management experts, hand-selected to help you unlock the best in those around you. I'm HBR senior editor and producer Amanda Kersey. If you're thinking about scaling, an initiative or an innovation, a sales strategy or a culture, Bob Sutton has advice for facing this long and difficult leadership challenge. He's an organizational psychologist who's taught management science at Stanford for over 40 years. Along with his colleague Huggy Rao, he's studied leaders who've scaled something successfully, and those who failed at it.

1:05In doing so, they identified habits that spread what works, and habits that keep those early wins in one area from catching on. When former HBR editor-at-large Julia Kirby spoke with Bob Sutton in 2014 for IdeaCast, he and Huggy Rao had just published their book, Scaling Up Excellence. getting to more without settling for less. Here's Julia.

1:31Bob Sutton:Bob, thanks for coming. It's great to be here. Good to see you, Julia. So we always hear this phrase, how do we take this to scale? And we tend to associate that with like an entrepreneurial idea, maybe a small business that has the potential to be big. But it seems like when you use this word scaling, you're using it a little more expansively. We definitely are using it more expansively. And in fact, it's interesting, When we first started studying scaling, we were studying it in healthcare and in education, where they have a little bit different meaning, which is you've got a great school or you've got a department that has a really low infection rate in a hospital.

2:09Bob Sutton:And how do you spread that little bit of magic so it becomes the norm? And then we also started, since I'm in Silicon Valley, noticing that they were using this word a lot in startups. So as we looked more broadly, we were looking at cases of, well, how do you grow Google? How do you grow a little startup like Pulse? If you have one great new restaurant, like in fact, there's a great restaurant in San Francisco called Delfina Pizza, and they're opening a second location in Palo Alto. They're trying not to mess it up. And so how do you do that sort of scaling? And so even though there are different ways that it played out, we kept realizing over and over again that there was this sometimes called the problem of more where you've got a little bit of goodness in how you spread it further.

2:56Bob Sutton:And as you say, there are some differences in how it plays out, but there's also remarkable similarity in terms of what it is as a leadership or management challenge. So that's what the book is about. So it's pretty easy to see then how this adds up to a really important body of knowledge for managers. But give me some advice. Let's say I'm the leader of an organization and has a lot of people working in different locations. And maybe one of those groups is really killing it. And there's some kind of magic going on there. And I wish it could be the norm throughout my empire. Throughout your empire.

3:33Bob Sutton:How do I make that happen? Well, the first thing you've got, and I always like to start with this as a condition is, and it's so obvious it's ridiculous, but some of the organizations we work with sometimes miss this, which is to scale excellence, you have to have excellence to scale. So the first thing I do is make sure it actually is excellent. But assuming that's the case, there's a number of principles that we've come up with. One is just making a rational argument for spreading it doesn't usually work. It turns out the way that we human beings operate, and there's lots of research to support this, is you kind of got to get some emotional arousal or excitement around what you're doing.

4:09Bob Sutton:So we call this linking a hot cause to a cool solution. Just one example, one of the cases we talk a lot about in the book is the 100 ,000 Lives campaign, which was led by a small nonprofit in Boston called the Institute for Health Improvement. and to kick off their campaign to get U.S. hospitals to do really simple life-saving things like getting physicians to wash their hands, really very simple things. They started out with a conference where there was a mother whose child had died as a result of mistakes that were made at Johns Hopkins Hospital. And also one of my favorite parts, they had a nun, Sister Mary Jean Ryan, who runs a large health care system, basically say that it was a moral imperative.

4:51Bob Sutton:I guess maybe the implication was internal damnation if you didn't sign up for the program. But then what they did was they had people sign up there and they had them follow these specific evidence-based practices. And it really does look like the number of preventable deaths in U.S. hospitals between 2004 and 2006 went down over 100 ,000 as a result of the campaign. So to us, that's the first one, hot cause, cool solution. Another one that we see over and over again is when you've got an organization or a program and it's expanding, it tends to get more and more complex. If you just think about it, the case of the 100 ,000 Lives campaign, the case of Google going from a couple hundred people in Palo Alto to now 30 ,000 was one case that we looked at.

5:38Bob Sutton:Even little organizations, one called Pulse we studied went from four to 20 people. In the process, you always want to worry about keeping the cognitive complexity down because as organizations get bigger, there's this tendency to put on more and more process and more and more structure. And we're, with all due respect to my colleague, Gary Hamill, we do not believe that you should tear down the bureaucracy or have no hierarchy. What it looks like, and there's quite a bit of evidence to support this, is that, yes, you should keep things as simple as possible. but in the process, the way that I think of hierarchy, you use hierarchy to build good bureaucracy and destroy bad bureaucracy.

6:19Bob Sutton:And in this notion, we learned a lot of this from talking to a guy named Chris Fry, who's now head of engineering at Twitter. But before that, he was head of the development organization at Salesforce.com. And he's got this really sort of clear view, which is that your job as a leader is to create conditions where people actually will be more rather than less successful in their work and to remove obstacles that are in their way. So I guess that would be another principle. A related piece of advice that I would give you if you were trying to scale is a good sign, and this is straight from the Chris Fry sort of handbook, is you want to give people just a little less structure and a little less process than you think they need.

7:02Bob Sutton:And sometimes there's this expression, give ground grudgingly. So it should feel like they've got to think about it actively and there isn't quite enough for them more to do as opposed to the feeling that you're walking in the muck. He argues is a sign that we've got a little bit too much. So obviously there's a balancing act there. A couple of other bits of advice. This notion that when you've got excellence to spread, you don't spread it like a thin coat of peanut butter is something that we see over and over again. When we see excellent spread, what tends to happen is there tends to be pockets that are developed, made wonderful, and then spread to the next pocket, often by the people who developed it in the first place.

7:42Bob Sutton:To give you two kind of different examples, one example, we looked at the spread of basically the computerized medical records at Kaiser Permanente, which is the largest healthcare system in the United States, done by a team called the Tiger Team led by a woman named Louise Lang. And what they did was they first got things really, really cranking in Hawaii, which is actually their smallest region. And once that region was great, then they spread it to the next region. Then they spread it to the next region. And over nine years, they had one excellent rollout after another because what you had was real pockets of expertise.

8:21Bob Sutton:We saw the same thing in a case study we did at Wyeth of manufacturing improvements. And in that case, what they would do with implants is they would do mini transformations where they would get the efficiency and the quality going. And once they got that team trained, that team would then help train the next. This idea of connecting and cascading is something that we see over and over again as a principle. And I guess as sort of a final principle, if I was going to really emphasize and kind of a play on Jim Collins' famous book, Our argument is that good to great is nice, but bad to great is really the sign of what it takes to spread excellence.

9:00Bob Sutton:Because in the situations that we see excellence spread, the problem is that bad behavior, bad norms, bad beliefs are so destructive that if you don't clear them out of the way, there's no way that you can spread excellence. Just a little case study. One of the cases that we did, we actually had the CEO come and talk to our class. Well, he described how he turned around a set of retail stores in the West Coast called Cost Plus. And he said, we basically had to get people to clean the bathrooms and to greet customers. They weren't doing either one. And once we sort of got rid of that kind of badness and, oh, and also got rid of the most incompetent and destructive employees, once we did that, actually the turnaround ended up being quite easy, relatively speaking, because the bad stuff was out of the way.

9:49Bob Sutton:And there's lots of other examples in the book, but the key point is that the first job of a manager is to get rid of the bad stuff if you want to spread excellence. Great set of principles there for how to do scaling right. Have you also seen some patterns in what people do wrong, how they fail to scale? How they fail to scale. So there's a couple of different principles, and I think some of these are implied. And I guess to start with the most important one is that when people start focusing on running up the numbers rather than spreading a mindset, that's when they really get in trouble. And it's almost like an irony when we look at the organizations that have scaled or spread excellence most effectively, they tend to take the time to sort of pull over to, I don't want to use the word brainwashing, but it actually might be accurate to really get people with the right mindset in the place so that everybody is kind of on the same page.

10:47Bob Sutton:A great example of this is actually Facebook. Facebook, as we know, especially between 2005 and 2012, just added users absolutely like crazy. Therefore, they had to hire a lot of engineers despite, and actually they would argue, but because of that, it was very important to have people on the same page operating on the same set of assumptions. So to this day, I just checked this out last week, When they hire new engineers, first of all, they don't know exactly what role you're going to go into. Second, they bring you into a six-week boot camp where the purpose of the boot camp is essentially to kind of basically instill the Facebook mindset in you by, number one, having you work on seven or eight different projects for different teams.

11:29Bob Sutton:So to sort of live the move fast and break things mindset and also to understand the code base as a whole. and in talking to Mike Schroffer or Shrepp and there's a guy named Chris Cox who's also head of product, they say that because they are having to scale and grow so fast that keeping the culture under control is especially important. And if you look at other organizations that have scaled quickly but then sort of went out of control, I hate to use a name, but Zynga has some of these characteristics, they tend to be sort of less focused on sustaining the culture. I think Zynga is actually starting to come back a little bit in this regard.

12:06Bob Sutton:But nonetheless, it's this notion that one of the biggest mistake organizations do is they focus so much on running up the numbers, they don't focus on spreading the mindset. You know, one thing that is so great in the experience of reading the book are these kind of heroes that come out in the narrative. And there's at least an implicit message that there's a lot of leadership required in scaling. But at the same time, putting the emphasis on scaling up excellence, it's sort of recasting the whole role of the leader. I guess, do you have any particular advice for leaders and what their mindset should be towards scaling?

12:44Bob Sutton:Well, it is a couple of things about the mindset of scaling. One is, because it takes so long and it's so difficult, sometimes when people hear that, they say, oh, I'm not going to start today. This seems so hard. And I think of Claudia Kochka, one of our scaling heroes who helped spread innovation practices throughout that huge company, Procter & Gamble. And as Claudia said, my impatience combined with A.G. Lafley, the then and now CEO, saying, Claudia, it's going to take a long time. You've got to keep pushing. So you need that combination of daily impatience and realizing it's going to take a long time.

13:21Bob Sutton:And then the other thing which I would advise is sometimes people say, well, scaling is other people's job. But when we see where it's happened, and very often it's people who, another one of our scaling heroes, Bonnie Simi at JetBlue, who made some incredible changes in operations. She was a middle manager and a pilot. And they tend to be people who understand that excellence sort of starts with them and they start from where they're at. So we have examples of senior executives, but we also have lots of examples of people who, in their team, in their department, they'll sort of step up and make something good happen.

13:58Bob Sutton:And so I guess there's two lessons in that. One, it's not other people's responsibilities. And two, the only way to make it happen is to start where you are with what you've got now.

14:10That was organizational psychologist Bob Sutton speaking with Julia Kirby, who was an editor with HBR for 15 years. Bob's latest book from 2024 is The Friction Project, How Smart Leaders Make the Right Things Easier and the Wrong Things Harder. HBR on Leadership will be back next Wednesday with another handpicked conversation from Harvard Business Review. If this episode helped you, share it with your friends and colleagues and follow the show on Apple Podcasts, Spotify, or wherever you listen to podcasts. While you're there, consider leaving us a review. And when you're ready for more podcasts, articles, case studies, books, and videos with the world's top business and management experts, find it all at hbr.org.

15:02This episode was produced by me, Amanda Kersey. On Leadership's team includes Maureen Hoke, Rob Eckhart, Erica Trexler, Ramsey Kabaz, Anne Bartholomew, and Nicole Smith. Music is by Coma Media.

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