Does Process Orientation hinder Risk Taking? A rebuttal of HubSpot cofounder Dharmesh Shah’s Views

HubSpot, one of the leaders in Marketing Automation and CRM space, and its cofounder and CTO Dharmesh Shah, need no introduction. Dharmesh is a popular blogger and someone whose words carry weight in the startup world. So, when his LinkedIn post alludes that process minded people often overwhelm the risk takers as a startup grows and this is something which must be avoided at all costs, it makes a process-oriented person like me take note and think – is that really so? Or is this a misconception carried over from an old era when process focused people had not heard about Agile and start-ups were not so ubiquitous?

Anything we accomplish involves process. A growth hacker in a startup is as much dependent on a process as an assembly line worker in an automobile plant as both are working towards an outcome by performing certain tasks. Only difference is that a growth hacker might have internalized the processes and never felt the need to map and document them. He/She can get away with it as in a start-up - teams are too small and personal interactions are often quite easy and frequent.

Above we can see a typical high-level process for a growth hacker. At a bird’s eye view this process looks quite simple and easy to internalize. Now where in this process risk taking actually occurs? And how a process focused approach can actually hinder it, if it hinders it at all?

From a business point of view, most of the risk taking is actually occurring in the first two steps i.e., generating growth ideas and evaluating and selecting them. There is another kind of risk taking involved here (which is not depicted above) i.e., how frequently one comes back to the drawing board to generate new ideas after completing one run of the process? i.e., how much time one gives to an idea to succeed, which we will keep outside the purview of this article for simplicity.

Could a process orientation really hinder the above risk taking? Let’s see by further expanding the above process.

Above an additional step has been introduced in this process i.e., getting an approval from the Chief Revenue Officer (CRO) before going for A/B test. A process-oriented person would most likely agree with introducing this step as this step is reducing the risk inherent in the second step, but a start-up growth hacker would most likely dislike this step as his freedom and agility is getting reduced.

Risk can be minimized by putting proper controls

The above is a very simple process but it clearly shows the trade-off between control and agility. Controls are often necessary to keep a process effective but it is also obvious that more controls you put less agile you become. This trade-off can often be misconstrued as hindering the risk taking whereas it’s actually minimizing the chances of failure albeit at some cost of loss of nimbleness.

In start-up world, individual employees are often trusted completely because most of these individuals are either founders themselves or handpicked people with lots of skin in the game, making the approval step of the process redundant.

Now when a start-up grows, the organization’s stakes become higher and newly recruited individuals’ lower making this control step very much needed. Individuals close to founders may not immediately realize this and may build a counter narrative by constantly complaining about loss of agility.

Making Risk Taking more effective

It is very hard to argue against a cofounder whose company has a revenue run rate north of USD 1 billion. However, it is not very hard to hear about stories of founders getting blindsided by breakneck growth and a high performing team of the very first hires and later on struggling for profitability. Successful individuals often hate to lose freedom. They often internalize the processes they follow and create a high context environment. Transparency brought in by process orientation often challenges this high context environment and reduces the dependency on initial hires. In a small company one may not realize the inefficiency inherent in being too dependent on few individuals. But as company grows lots of unnecessary costs could be avoided by putting in place well thought out and flexible processes. Process orientation minimizes unnecessary risks while facilitating essential risks like those associated with marketing strategies of a growth hacker above by bringing in essential controls for effectiveness.