Are We Becoming Corporate?

Is that a Bad Thing?

Startup to scale up to corporation. Is that the path? A scale up is in pursuit of the next higher rung, which might be becoming corporate.

I was recently in a client's executive team QBR discussing the business's stellar performance and the keys to unlocking additional growth in the quarters ahead. In the spirit of my Groove Management approach, we dissected the recent successes. We highlighted the root causes of success and mapped those against future initiatives. We looked at the Rule of 40 and the balancing act of driving profitable growth while managing expenses.

The team was highly engaged, feeling good about their positive momentum and successes. We were discussing the need for more of a business cadence, routines, and predictability. That pivot to discussing standard work and predictability prompted one of the leaders to ask,

“Are we becoming corporate?”

It had a tone of disappointment. Others contemplated, and I couldn’t help myself; I blurted, “Is that a bad thing?”

I went on to say that their success and growth to over $50 million ARR had earned them the right to become corporate. There should not be a negative stigma associated with becoming corporate. It is a rite of passage. It is like a child becoming an adult. With it comes certain freedoms, but also much more responsibility.

That responsibility requires a systemic approach. There is a stigma associated with being corporate that seems to take on a negative connotation. The words that come to mind are bureaucratic, slow, risk-averse, and controlling. But being corporate doesn't have to mean any of those things. It means implementing practical routines that foster agility rather than stifling it. Practices like calling a "Team Timeout" to realign on priorities, or utilizing a Unique Value Add template, are examples of positive corporate structure that actually give teams the clarity they need to move fast.

I have the privilege of working with client organizations of all sizes and in various stages of maturity. I have been a trusted partner to Databricks since they were a 300-person company doing $50 million in ARR. I vividly recall a session I ran with Ron Gabrisko, their Chief Revenue Officer, and his sales leadership team, where he implored his leaders to remember that “heroics don’t scale.” Ron recognized that in order to build a billion-dollar beast of a company, it would require a systems approach. Databricks has certainly evolved since those early days, and they have built an unbelievable business.

While there are many corporations with negative traits, there are ways to grow without letting those characteristics quell the more positive ones. Many years ago, I wrote an article titled The Paradox of Size. In it, I argue that it should be the larger, more successful enterprises that take more risks and drive more innovation versus the startups. Risk can be compartmentalized, and larger organizations should have a higher risk tolerance. They have the ability to learn from mistakes rather than the mistakes being fatal. When you are a startup, heroics might save the day, but a single mistake can sink the ship. Becoming corporate means building a resilient system where mistakes are absorbed as learning opportunities. I still believe this to be true.

Becoming corporate should not be viewed by employees as a bad thing; it should be viewed in a positive light. Cultures must evolve, and organizations must be fit for purpose. What got you here might not get you there. In that spirit, organizations outgrow people, practices, and approaches. This is natural. The past and the legacy of a company defined the organization at a point in time, but the future is dependent upon the flexibility and agility of the organization.

Jim Collins, in his book Built to Last, highlighted eighteen “visionary companies.” The book was published in 1994, which is over thirty years ago. This was well before the iPhone, self-driving cars, GLP-1 drugs, 5G, and AI, which have all been major disruptors. While many of those eighteen companies have certainly faced periods of severe crisis, all of them have managed to survive.

This is a testament to their flexibility and agility. They have proven that being corporate can actually insulate a company and make it stronger, not weaker. So, when that leader asked, “Are we becoming corporate?”, the answer wasn't just "Yes." The answer was, "Yes, and that is exactly how we ensure we're still here to scale the next mountain."