As a chemical engineer, I learned that an industrial process wasn’t a larger version of the lab process – it was completely different. In the lab, I could grow some crystals in a flask, then scrape them out with a spatula. In an industrial process, you need to spray dry powder into a cone because you can’t scrape it out of a reactor vessel.
The same principle applies to business. As your organisation grows, you need to use different processes. Hiroshi Makitani, CEO of Rakuten, summarised it as the rule of 3 and 10: “Everything breaks at multiples of 3 and powers of 10.”
When you grow from 1 to 3 people you have to change how things work, then when you reach 10 people, then 30, then 100, and so on. If you don’t, you get stuck with methods that don’t scale, information that gets lost, and an unmanageable company.
Think of it a designing successive generations of your company. Gen 1 doesn’t need all the features of Gen 2, so you don’t need to design for a business that is larger than the one you have today. However, you do need to think ahead to when you expect to need Gen 2, and have it ready not too early and not too late.
Have you run into the rule of 3 and 10 in your organisation? How did you handle it?
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