To Grow Faster, Hit Pause — and Ask These Questions from Stripe’s COO

To Grow Faster, Hit Pause — and Ask These Questions from Stripe’s COO

Claire Hughes Johnson is the woman overseeing Stripe's rocketship ascent. Here, she shares a list of questions that any startup can use to guide hyper-growth.

Stripe is growing at breakneck speed, and it has been for years. At the beginning of 2016, it had 350 employees. A year later, having freshly moved into Dropbox’s old digs South of Market, it’s at 750. But according to COO Claire Hughes Johnson, the biggest challenge the company faces isn’t bringing enough new people on board. It’s integrating them into a complex organism that can’t stop/won’t stop moving forward. Figuring this out (continuously) is her mandate, and there are few people in tech operating at her level.

Stripe is in a rare and aspirational position these days. While growth has leveled off for many of the unicorns in its generation, it’s maintained its rocketship trajectory. When asked what wisdom she has to share from this experience, Johnson offers the following: There’s a list of questions companies should ask themselves as they head into rapid growth — ideally in that relatively brief moment right after clinching product-market fit.

“A lot of companies don’t decide how they want to grow until they’re well into their growth phase,” she says. “For a long time, your actions pull your company along, and then all of a sudden it switches — your existing business starts pushing your behavior. External forces like feature requests, the need for more customer support, the need to create a team to do X when you never even needed to do X before — those forces start to dictate your decisions.”

The key, she says, is pausing just long enough to be very intentional about how you approach each phase of growth.

It’s easy to become too reactive, and when that happens, you’ll inevitably start to make human resources mistakes, execution mistakes, prioritization mistakes.

So whether you’re in that moment right before growth — or you’re on your way there — press pause. Read through Johnson’s list of questions, and make sure you’re answering them as you go.

1. Have we documented our operating principles?

When you hit growth, a lot of unprecedented things start to happen, and you’ll feel like you have no guidelines to make good decisions. On top of that, many new people who were not there when the company started will need to make decisions too. They need a framework to help them do that.

This is why you need to document core tenets describing the way you work. Once they’re written down, you need to repeat them constantly until everyone has internalized them. Stripe calls them “Operating Principles.” (Many companies have “values,” but Stripe wanted to distinguish philosophical beliefs from the concrete principles that should be applied to the day-to-day work of running the business.) Three of Stripe’s operating principles, as Johnson describes them, are:

  • Users first: “We always start with what our users need or would like, and then consider things like like infrastructure, internal constraints, partnerships, product roadmap, and so on."
  • Think rigorously: “We care about getting things right and it often takes reasoning from first principles to get there. We work hard to detect the errors in received wisdom. Rigor doesn’t mean not-invented-here syndrome; we’re interested in the world around us and think that other companies, industries, and academic fields have a lot to teach us. But in many cases progress comes from taking paths less traveled.”
  • Trust and amplify: “We want to work in a company of deeply good people who treat their colleagues exceptionally well. People should be committed to amplifying one another: to going out of their way to help each other in both the short- and long-term.”

You can find the full list, which they published publicly, here.

Your principles should be clear and explicit enough that the people who consult them will make the same decisions a founder of your company would.

They should also be defined in a way that acknowledges potential tensions. When two principles seem to conflict, the context should tell you which principle should take precedence. For example, “think rigorously” is paramount for high impact and irreversible decisions, but “move with urgency” is critical for decisions that are lower impact and potentially tunable. In this way, your core tenets serve more as a guide to action than a toothless list of nice-to-haves.

This also makes them a useful rubric for hiring new people and assessing performance. Do candidates have aptitudes or experiences that align with your operating principles? Do existing employees execute their responsibilities in a way that upholds them? You should bake your operating principles into both your hiring and performance review processes to make them useful and keep them top of mind.

When you run post-mortems on projects, evaluate process and results through the lens of your operating principles. “During growth, people can get very outcome-oriented and cut corners on the underlying thought process,” says Johnson. “Having principles written down allows you to say, ‘Hey, we agreed as a company that we would proceed according to these tenets. How could we have adhered to them better in this situation?’ Or, alternatively, ‘Do we need to change how we operate to achieve better results in the future?’”

You know you’ve done right by your operating principles when people start using their language verbatim in decision meetings. “That’s the next best thing to having leadership in the room.”

It starts with onboarding. To underscore the importance of Stripe’s Operating Principles, they show new hires the company’s very first set of principles, written down the year it was founded. It’s striking how similar they are to today’s list — which emphasizes exactly how foundational these ideas are to Stripe’s success. “It shows what’s ALWAYS been important to the company — which really sticks with people,” says Johnson. “It also gives us an opportunity talk about when those very few changes have been made and why.”

The operating principles play an even bigger role in training for new managers joining the company. “If you’re not careful, managers bring whatever rules and behaviors they had in their prior roles — and they have tremendous influence on their teams,” she says. “That’s why we built a different onboarding program for new leaders, to make sure they really understand the different way in which Stripe operates based on our principles.”

This is an all too common failure mode: A startup’s founding team uses a set of unwritten beliefs they all implicitly know and agree with to make hiring decisions and product decisions — but they never get said out loud or documented somewhere central.

“So much happens organically when you’re on a small team always working in the same room,” says Johnson. “You have a lot of informal ability to get things done because you all have an immediate understanding of what kind of decision is being made and how you want to handle it. But when you scale, you can’t easily teach that to someone new in a way that they’ll immediately understand. They have to be conditioned to understand it.”

If you’re a leader at a company, do you know what these unspoken, unwritten things are? Have you categorized the common types of decisions you need to make? Have you documented the beliefs that guide how you make those decisions? If not, pause, and do that now.

2. What structure is going to help us achieve our goals?

Along with growth comes the need for formal management. Even if you’re committed to staying pretty flat, you need make responsibilities and escalation pathways clear.

“Flatness is really a state of mind,” says Johnson. “You can make your org feel flat while still having a good chain of authority in place so people don’t have too many direct reports, and there’s a clear way way escalate issues. We do it by not having a lot of titles or signals of seniority, because we want all people to speak up and contribute. Whether or not you get included in a meeting is always about how much you know about a given issue or problem, not about hierarchy. But everyone still explicitly knows who their manager is."

This is what works for Stripe. But every company needs to decide on a structure that fits their specific goals. Maybe you need more hierarchy to execute on very complex processes with a lot of hand-offs. Maybe you need less because you want all employees to be immediately responsive to customers’ questions without having to double-check with someone else.

At the beginning of any company, everyone is doing whatever it takes to succeed. When you enter growth, that no longer works. People need to be connected linearly to success metrics.

Critical to choosing the right structure is creating ways you will change and evolve it. You want to anticipate that the size and shape and number of people around any given table is bound to change. “It’s a good habit to check in every six months to blow up meetings that have gotten entrenched, stale, or no longer productive,” says Johnson. “You don’t want to get attached to thinking that a certain process is the only way to do something, or that you need a certain combination of people to get something done — I can pretty much guarantee that neither the process or the people will still be right a year from now.”

3. Who has been successful at our company so far?

Maybe you’ve hired 20 people or just 10 — that’s still enough to pattern match what kind of person is good at working for your company.

“Take the time to ask: Okay, what kind of people have we hired? Are they a diverse enough group to bring different perspectives and experience to the company? Who’s doing really well? Who’s scaling at the same pace as the company? What are those people’s characteristics?” says Johnson. In fact, making a list of their attributes is a good way to either define, reinforce or tweak your operating principles to make sure they’re aligned.

The people who scale with your company are the ones who anticipate what they need to learn now in order to excel at what their role will become in six months. They’re curious enough to look ahead. They aren’t content with or consumed by simply doing their present job.

When Johnson first joined, Stripe’s international coverage was new. There were individual country managers working as generalists to get the ball rolling wherever they were stationed. But as the company grew, these people needed to transition into serious team builders — a few of them eventually running large organizations of their own. Some of these country managers scaled into these new roles. Others didn’t because they couldn’t gain the skills they needed to build and manage growing teams while producing results.

As the company brought on new country managers for further expansion, they hired candidates based on pattern matching with the type of people who had already been successful in this role. By and large, these were employees who relished the challenge of expansion to such a degree that they were willing to put in the time to learn, asked for constant feedback, and were relentlessly educating themselves about their local markets.

“Look at the people who love working for your company. What do they enjoy? What are they especially good at? What skills set them apart?” says Johnson. “You want to hire more people who fit the mold of the people who not only have the right skills, but who are having a good time too. Happiness is critical to high performance — happy people get curious and want to learn.”

She occasionally finds it helpful to plot members of the team on a Venn Diagram with three circles: People who are good at their work, people who are making great impact, and people who love what they do. The ideal employee fits into all three circles. Make a list of all the people who fall into this bucket. What other qualities do they have in common? What questions can you ask during recruiting to suss out whether a candidate shares those qualities?

4. Do we have a 5-year plan?

Johnson is a big believer in companies writing down a long-term plan. But the key point is: it shouldn't be long. It shouldn't be some monumental, time-consuming ordeal. It should be as simple as three to five paragraphs briefly describing the biggest, macro goals the company wants to make sure it’s pursuing over the next five years or so.

For Stripe, this document includes: “Arming online companies of all sizes with the infrastructure they need to build their businesses and compete in the global economy.”

That’s something that we can continually ask ourselves, ‘Is what we’re doing right now in alignment with that goal?’

Johnson worked on the first draft of this document with Co-founder Patrick Collison. The entire leadership team workshopped it for a few weeks, and then it was published to the whole company.

“Your startup deserves constitutional documents to guide your actions as you grow,” says Johnson. “Once you’ve defined how you want to work, the best structure for your company, the type of employees you want to work with — this document outlines what you’re harnessing all of these resources to accomplish.”

As part of developing the plan, the executive team got together away from the office and designed a day that was entirely focused on the task at hand. “I find that a lot of people talk about achieving ‘flow state’ as an individual — that feeling of being so at one with your work that you’re able to be more creative and develop new ideas,” she says. “Very few people talk about how to get into flow state as a group. But they should. When we do planning, that’s what we try to get to — a shared sense of purpose, with all our brains trained on one outcome.” She recommends this approach to companies looking to develop a longer-term approach.

Also important: the plan you publish should be stored somewhere central where it can be easily referenced. And it should be core to new employee onboarding, alongside your operating principles. It may be tweaked over the years as you learn about your business or customers, but ideally, the goals you enshrine in it should be so intrinsic to why you founded the company that they don’t change much.

“When making product decisions, you want people to reference the plan — ‘Is this new idea or feature serving our overarching objectives?’ Or ‘should we launch this thing even if it doesn’t serve any of our 5-year objectives?’ Your constitutional document empowers people to ask and answer these questions so your company doesn’t get distracted from the things you absolutely believe you must do to succeed.”

Once you get traction, suddenly everything is an exciting opportunity. A long-term plan forces you to make good decisions with limited resources.

5. Do we have a way to measure the employee experience?

To Johnson’s previous point that happiness is core to high-performance, she believes every scaling company needs mechanisms in place to gauge and respond to employee satisfaction levels. Stripe, for instance, surveys its workforce every six months. “This might seem really frequent for a company our size, but when you’re growing this fast, things are always changing. It’s important that we keep tabs on how people feel about our direction.”

The survey is around 75 questions long, and takes about 10 minutes to fill out. The results are anonymous and analyzed on a rolling basis by the executive team. Questions include rating the extent to which individuals agree or disagree with the following statements:

  • I can see the relationship between what I do and the overall goals and objectives of Stripe.
  • I have enough autonomy to perform my job effectively.
  • I am appropriately involved in decisions that affect my work.
  • I have the opportunity to do what I do best every day.
  • I have opportunities at work to learn and grow.
  • I would recommend Stripe as a great place to work.

For Johnson, the most important question on the survey measures: “Do I feel a direct relationship between the work that I do every day and the success of the company?”

“It’s so important that people really feel connected to the impact of their work, and feel that they’re producing important business results,” she says. “It’s one of my favorite litmus tests for whether the organization is healthy or not.”

While Stripe has performed well on this question to date, startups can use the results of this query to determine what to do next. If you get a negative response to this question, it’s likely that you’ve overstaffed, so that some people feel like they’re just doing busy work or they’re responsible for too small a fragment of the company. The other reason you might be getting this result is if either senior leadership or people’s managers aren’t very good at articulating the company vision and how it relates to the responsibilities at hand. Johnson recommends collecting sub-data on these questions to diagnose what the problem is. Regardless, it’s vital to fix it.

“I’ve seen a lot of mid-level managers be reluctant to own a founder’s vision, so they end up only weakly communicating how their team’s work is relevant to the organization’s mission,” she says. “The best managers make it their highest priority to connect the work their team is doing to the big, ultimate goals the company is working toward.”

If you as a leader don't believe that the work you do every day is important, your team isn't going to believe it either. That puts you in a very dangerous spot.

6. Are we decentralizing decisionmaking?

One of the biggest challenges any growing company faces is equipping employees with the information, agency and confidence to make decisions for the company on their own. As a founder or executive leader, you can’t always be there to make a call. You have to trust that others can do it in order to keep pushing the frontier of your business.

To make this possible, Johnson subscribes to the same method as medical residency programs: See one, do one, teach one.

When you’re a surgeon, this is how you learn — and how you eventually become qualified to make snap, life-altering decisions in the operating room. This is also how you can train people up at a tech company — demonstrate how you want work to be done, have them do it themselves, then have them teach new people who are being onboarded what they’ve learned. The act of teaching, in particular, is powerful for internalizing information and making actions second nature.

This is how Stripe has empowered people to make good decisions, no matter how many steps they are away from the founders. For example, when Patrick and John Collison started the company, they had very clear opinions about the brand they wanted to build — particularly the design philosophy. They believed strongly that the software should be beautiful, which differentiated them in their B2B market. Over time, this has distinguished Stripe as a leader in the field.

To make this possible, the founders had to pass on their design sensibility to a team of new people who would carry it forward the way they would have themselves. When the design team was just starting out, the founders created a design review process that would allow them to offer their opinions and ask guiding questions at checkpoints along the way. Eventually, the design leaders on the team took this over as they brought on new members — asking the same set of questions at the same checkpoints. They became the teachers for a new crop of designers who would then learn the criteria, questions and goals to consider when designing something new.

A similar process was established on the business side: deal review.

“The initial decision makers on deal terms were those of us who led the company,” says Johnson. “We no longer review every deal, and we'd be failing if that were the case.”

Stripe's leadership still maintains a deal review for unusual deals. Documentation is critical to supplement the impact of these review meetings. It’s important that you start categorizing the common decisions teams have to make, so you can create rules and methods around how to make them.

“For example, we’ve streamlined how to handle deals with similar structures,” she says. “We’ll be able to identify a type of deal based on a list of criteria, and we’ll be able to respond with the right type of contract. It accelerates everything and makes it easy for people on the front lines to respond without always checking with their managers — and it provides a better experience for customers coming to Stripe.”

Importantly, there are also set procedures for when new types of deals or decisions are encountered. “When an employee sees a new type of deal for the first time, they know exactly how to elevate it, and who needs to be involved — instead of running around asking a bunch of people. They don’t try to graft an existing process to fit a new situation. They’re triggered to pause and carefully consider their next step with the deal review group.”

To help everyone with these decisions, Stripe has published a framework internally. Here are the basics:

  • If a decision is irreversible and very high impact for the company, it should be made with a lot of data and rigor; it should involve more stakeholders, and maybe multiple teams. Think product pricing as a perfect example.
  • If a decision is reversible and relatively low-impact for the company, an individual should be able to apply their best judgment based on the company’s operating principles and plans (this is where those documents become key). This could include UI changes, customer service responses, etc.

You can think of this in a two-by-two format where impact is on one axis and ability to reverse or bounce back on the other. Most projects can be plotted somewhere on this chart. Based on where they land, you know better how to proceed.

For Stripe, this has minimized the number of people who aren’t sure if they can make a decision on their own or not. And it’s minimized the time they spend checking with their managers and getting validation. Combined, this has saved significant time and resources for the company.

Using this framework to empower decision making has also been replicable and scalable. Employees who are familiar with it can now pattern match which types of decisions require which types of actions — without predicting every single type of decision that could be made in advance.

“This is very high leverage for us,” says Johnson. “There are many companies out there that get really into decision rights — like who’s allowed to decide what based on seniority or role. In my experience, this doesn’t work when you need to move and grow fast. I’ve been at companies where people will say, ‘Talk to these three people and then you can go ahead and decide.’ Those three people inevitably become a bottleneck, and a bunch of other people feel like they don’t truly have ownership of their work.”

To grow successfully, you need to keep pushing the ability to make decisions down through the ranks, so that the people closest to the work can make high-quality, responsible calls. Stripe makes it a priority to localize decision making as much as possible.

Not localizing problem-solving is a secret killer of companies.

“If you don’t consistently teach more and more people how to make the decisions or find resolutions consistent with your company’s goals, you’re going to stall out," says Johnson. "Trust saves a huge amount of time.”

Nearly all of the questions you should ask before you scale are about making trust central to your company’s operations. As a founder, can you trust hundreds of people — including many new people every month — to do their work the way you would do it? You’ll only be able to answer yes if you trust their judgment, and the only way to trust their judgment is to — above all — hire well. Beyond that, provide the people you’ve hired with the information, resources, tools, and mental models they need to understand your priorities, intent and objectives.

If you can supply these things, you’ll be on your way to creating a multi-brain organism, smart enough to take on multiple, enormous tasks at the same time. You’ll be capable of launching a big new feature set while also restructuring compensation. You’ll be able to keep your hiring engine firing on all cylinders while jumping on an emergency need from a marquee customer. This ability to parallelize complex actions is a whole new plane of existence for companies. And if you’re just headed into rapid growth, it’s the goal you should be targeting from the beginning.

Photography by Christophe Wu.