How we handled rapid growth & maintained our culture

Daniel Ackermann

CEO

This is a manifesto of our company’s growth, culture and all of our experiences. We hope it will help other smaller service based businesses learn from our insights and achieve an even faster growth than we did.

We have 100 employees and 4 offices, but our story began in my parents’ apartment where two friends had a vision to make something different. In the first five and a half years our revenues grow from 30 thousand to more than 2 million €, despite the recession in Croatia with GDP decreasing by 18% and the 17% inflation. We made mistakes, picked ourselves up, learned a lot and always kept our focus on people and the quality of work.

1. The Beginning (2-10 employees)
2. The Foundation of Future (10-20 employees)
3. The Wake-up Call (20-40 employees)
4. The Golden Age (40-80 employees)

1. The Beginning (2-10 employees)

In the first phase of Degordian, we grew from 2 to 10 employees.
As there were only a handful of us we couldn’t specialize, so we had to do everything ourselves. We had a lot of enthusiasm and energy, but we couldn’t afford to hire people with a lot of experience so we decided to hire students with the drive to learn and develop themselves. Everything worked like a charm because we were really close – we hung out together, went out together and generally spent a lot of our time together.

Pros:

  • Flexibility – there were times when we finished all of our tasks ahead of a schedule so we could easily take time off, and of course there were times when we used to work days, nights and weekends just to meet the deadline.
  • Rapid learning – we had a chance to experiment and get to conclusions via trial and error, but even more important, we had a chance to share our experiences and learn from them.
  • Close friendship – the atmosphere in the office was excellent because we were really close, and by helping each other and sharing the information we fully understood each other’s needs.
  • High productivity – back then, there was no need for formal consultations or educations, because as soon as one of us learned a new thing he would share his knowledge with the whole team. By doing that we could focus all of our energy on client related tasks while constantly staying in the loop.
  • Low risk – besides being flexible as a team, Tomislav and I as founders could mend every issue that would arise. For example, if we sold more applications than we could produce or our cash flow declined, the two of us would have clocked more hours to get everything back on track. Today, when our projects are large and numerous, going above the limit with projects is something Tomislav and I can no longer compensate by working late.
  • High motivation – the atmosphere in the office was intense because we pushed each other to go harder in order to achieve the goals we put in front of us. There may have only been a few of us then, but every single one gave 150% of itself for the team and we felt that we could move mountains.

Cons:

  • Frequent errors – we were young and laid back and that caused a number of errors both internal and external. From today’s point of view, those kinds of errors would be unthinkable and unacceptable.
  • Missing the big picture – we were all focused primarily on our services, and it was difficult to put the entire digital advertising picture inside our scope.
  • Lack of responsibility – Tomislav and I were solely responsible for assuring that every step of the plan is meticulously executed, but the rising number of new projects meant more work and thus more possibility for unwanted errors.
  • Lack of severity – we thought of work as a fun game. A fun game in which we nurtured our creativity, but at the same time, clients thought that we weren’t serious enough.
  • Hiring issues – we were but a small company and our reputation was too weak to attract talent. The only option we had was to contact people we already knew and try to share our vision with them.
The beginning - 10 employees

An overly friendly atmosphere in the office combined with a lack of responsibility proved to be our biggest challenges during this first phase. The former caused an absence of authority in later phases of Degordian’s development, while the latter made the entire team a bit too relaxed because they got used to having Tomislav and me checking out their work and fixing anything that was not up to the standard.

2. The Foundation of Future (10-20 employees)

This was a fairly short phase because we experienced a rapid growth in employee numbers, and quickly went from 10 to 20.
Besides growing in numbers, we had to implement a lot of new features to help us out like CRM tool which improved the overall organization and defined our first mini-processes, as well as Project management tools (Basecamp). We started the practice of collective meetings to increase the information sharing inside Degordian and the in-house work increased the quality of the final product. Larger number of employees also meant the hierarchy within the company by grouping teams together, which ultimately led to the delegation of responsibility from Tomislav and me to lead members of every group.

Pros:

  • Seriousness & flexibility – as the number of employees grew, so did our internal responsibilities and organization, which in turn transferred on our work for clients. But the important fact is that we remained as flexible and adaptable as we were in the first phase.
  • Good promotion – our rapid growth was great for the awareness and promotion of the company itself and in this phase we were literally all across the media. Besides that, Tomislav and I did our share of the work, so we attended as many conferences as we could.
  • Higher quality – larger number of employees allowed us to specialize. That proved to be extremely positive as the quality of our product as well as our results, grew beyond our scope.
  • Measurement, control and benefit systems – in this phase each individual could affect the team result, as well as organization. We measured team success in order to create quality benefit systems and performance control. Later, along with the growth, this was harder, so for example, if a production team consisting of 15 members did a great job we couldn’t determine exactly was it the whole team or few individuals.

Cons:

  • First time – with fast growth, a lot of employees (including Tomislav and me) had new challenges and responsibilities with which we didn’t encounter before. This produced stress and errors because we had to learn about new responsibilities and services in a short period of time.
  • New organization – we completely reorganized, so it took some extra time and effort to get everything internally and externally back on track.
  • Lower stability – Tomislav and I, as founders, could no longer take care of every single thing within the company as the projects grew larger both in numbers and complexity.
  • Team dependency – as the team grew bigger, we became more and more dependant on each other. When there’s an issue inside the team, there are now ten or more people that have to deal with it instead of two of us.
Degordian's BiH team

Degordian was growing extremely fast in this period. New teams were created, some of our employees were put in leading roles and got more responsibilities than they used to have. We had to adapt to the changes, so it took us some time and a couple of errors along the way to get used to this new situation and overall organization.

3. The Wake-up Call (20-40 employees)

This phase was by far the longest and most complex. We transformed from a cool social media team with 20 employees into a real full service digital agency with 40 members. A lot of things were changed and a lot of hard decisions had to be made, but we stayed true to our goals and pushed through.
With an ever increasing number of employees and teams, a creation of a precise hierarchy within Degordian was our number one priority. In addition to that, Tomislav and I had to divide the tasks and teams we were responsible for, in order to keep track of everything. As we managed to attract more and more experts with years of experience to Degordian, we could finally finish our specialization process, and with the implementation of new productivity tools, some of the most crucial aspects of company organization were simplified.

Pros:

  • Quality boost – with all of the people in our team, we could take on projects that were far more complex than ever before. In this phase we were able to create a team of three exceptional designers who worked together on delivering the best result possible. And that practice wasn’t restricted only to design, all of our teams were able to give their best.
  • Fewer errors – we drastically increased team responsibilities, and that lowered the amount of possible errors to an all-time low.
  • Increase in capacity & speed – with more employees and larger teams, we could not only take on a larger number of project, we could also complete projects in a shorter amount of time.
  • Personal advancement – for the first time since the founding, we had a possibility to provide our employees with an opportunity for advancement and personal development within Degordian. Someone could have started as an Account Assistant, proved he was ready for more and got promoted to an Account Manager, Senior Account Manager or even a Team Leader. Before this phase we weren’t able to provide all of this possibilities to our employees.

Cons:

  • Founder difficulties – more people and more projects means more work for Tomislav and me. We were still too small to have our own assistants, HR, lawyers and IT support, and having our employees work on something that’s not their main domain would be demotivational and a waste of their time. We decided to do all of those things by ourselves and believe me when I say that we were swamped.
  • Insufficient tracking – having a large number of employees simultaneously working on a large number of projects can be hectic, as we have a hard time tracking the efficiency and productivity of employees and even profitability of some projects.
  • Insufficient personal time – when we started, we had a lot of time to personally talk to each and every one of our employees for a couple of hours a week about their goals, needs or issues. Doing that now is physically impossible.
  • Disparities in quality – with a large number of employees and without a proper quality control procedure, there were some disparities in the qualities of our projects. There were times when we delivered an exceptional result that went above and beyond our goals, and then one that barely made the cut.
  • Decreased productivity – to ensure an adequate flow of information within Degordian, we held more internal meetings and consultations. That meant we could only work for 6 hours on client projects instead of 8, the other 2 were left for internal work.
  • Changes & pressure – nobody likes pressure, but that was a side-effect of having to change a large number of things in a short amount of time.
Degordian team

When we take a look at this phase of Degordian, we can appoint two things that we should have done better. First, we were reluctant to make difficult decisions and we tried everything to make things better, just to find out that nothing had changed and that we ultimately had to do what we were trying to avoid. Instead of using our time to concentrate on the well-being of the company, we wasted time trying to fix problems that couldn’t be fixed.

The second thing was our laid back attitude. We tried to insist on rules and responsibilities, but at the same time we wanted to make all of our team members happy and content. We would ease up on things more than we should, and by doing that were sucked in an endless loop of trying to please everyone and neglecting the company. At one point we should have drawn a line.

4. The Golden Age (40-80 employees)

The team doubled in size reaching 80 employees but everything worked like clockwork due to all of organizational procedures we implemented. This was by far our finest hour and we were ready to reap the benefits of our hard work.

Each of our teams implemented a quality assurance process so that our clients could be sure that everything we deliver is of the highest standard. In addition to that, we started conducting feedback forms to find out the level of satisfaction of our clients with our results, projects and us as a company in general. Those processes also helped us calculate the profitability of clients and projects we were working on. Because of them, we are now able to provide maximum quality for our clients while at the same time staying within the limits of their budgets. Giving our clients the results they want is of the highest importance, so we defined precise project guidelines and tracking mechanisms to additionally boost quality and productivity while keeping a close eye on our finances.

A lot of the changes we made are here to help us organize internally and reach maximum efficiency and employee satisfaction. This starts with a detailed job description for every position that defines our rights and responsibilities, while the implementation of personal goals and educations is here to help us stimulate and guide the development of our employees. Quality times with both Tomislav and me, as well as Team Leaders are now organized as weekly meetings in which everyone can talk with us about any topic a person deems important for themselves, for us or the entire Degordian. This helps us boost internal satisfaction and mend issues before they become problems.

To further boost the efficiency of our central team, we added 3 members to our human resources team, 2 to our finances and 1 to our marketing. This is a fairly large team, but Tomislav and I need all the help we can get to be able to focus on developing a strategy and organizational processes for Degordian.

Degordian team

Pros:

  • High quality services – our current team achieves the greatest results for clients since we began, and on top of that, errors are practically nonexistent.
  • High client satisfaction – our clients are extremely satisfied with our work and the results we delivered. According to their latest feedback forms, the average score was 4.5 out of 5.
  • Quality organization – everyone knows their obligations due to the procedures we set up to help us with organizations of work and projects.
  • Rapid learning & specialization – every position within the company requires a set of skills that are fairly different. This gives us the possibility to share the knowledge with each other and educate ourselves on different aspects of work in digital advertising.
  • Ultimate growth – we’re growing across the board. In 2014. our growth will be bigger that the one in 2009, 2010 and 2011… combined!

Cons:

  • Tracking issues – Tomislav and me are no longer an integral part of the operational segment, so we’re sometimes unaware of the issues that could arise.
  • Tracking productivity – with the increase in employee numbers, there’s also an increase in a possibility that some members contribute more than the others.
  • Slow implementation – implementation of changes slows down as the number of employees rises. When extensive changes are to be made, we have to inform and educate a larger number of people, which can take weeks or even months.
  • Complicated administration – all of the procedures and administration pressure increase as the company grows larger.

This was the greatest phase in the history of Degordian, but it also had its share of issues we needed to address. We set-up procedures that defined our internal and external processes, but when they aren’t implemented, they serve no purpose. When we look back on it, we can see that we should have insisted on their usage. Increasing workload was also an issue we needed to fix, as a large number of projects caused problems in our internal schedules. In addition to that, we had a couple of instances in which our productivity fell because of a large number of internal meetings and educations.

The Conclusion

As you can see, organizing people and challenges that arise differ from phase to phase, especially if the company grows as rapidly as we grew. The main thing we learned is that the impact of every decision needs to be evaluated and that we always have to plan ahead. Even years ahead!

We also learned that different people shine in different phases. Someone who excelled during the first phases, may have a hard time finding his place when the company starts growing exponentially, but that’s normal, and that’s something every CEO needs to keep in mind.

But, regardless of the phase, one thing remained the same – our desire to grow! As long as we’re pursuing that goal together, every new day will be better than the last!

Author

Daniel Ackermann

CEO

Performance oriented CEO with a strong sense for numbers and statistics, especially when it comes to measuring his employees' level of satisfaction. Loves spicy food and believes in lifelong learning.

All stories by Daniel

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