Over the past few weeks, due to certain events beyond my control, I’ve spent quite a bit of time reflecting on the most productive companies I’ve founded or worked for, and how they compare to the ones that were painfully bad at delivering value to shareholders and customers.
One of the simplest yet most pervasive problems I consistently observe is bloat. Companies often equate having more people with success. However, from an experienced operational perspective, this is anything but success—it's added risk. Many companies lack a fully developed plan to get new hires productive as quickly as possible, or they fail to establish metrics to measure not only individual performance but also the overall impact—positive or negative—on the team and business.
Bloat and overgrowth are common problems, typically driven by inexperienced management or leaders who have risen through the ranks within similarly bloated organizations. You can often identify such managers by asking them to break down and detail how they would execute tasks typically handled by their direct reports. More often than not, they struggle to provide enough detail—or worse, they can’t perform the tasks well themselves.
A few years ago, I was interviewing candidates for a Chief Product Officer role at another company. We received applications from well-known figures in the UK financial services sector, many eager to gain exposure in the regulated crypto space.
After interviewing more than two dozen candidates, the standout ones (who also weren’t raving sociopaths) demonstrated not only strong people skills and the ability to orchestrate fast-moving projects, but also intimate knowledge of how to take a concept from market research and idea inception to prototype development and validation.
The candidates who failed tended to give answers characteristic of someone accustomed to delegating and orchestrating from a distance. While these skills are necessary for managing large, bloated organizations, they often reflect a “turkey fattening for Christmas” mindset—where the goal is to keep things running until someone decides whether to continue funding the operation or shut it down.
Some may argue that as managers climb the ladder, they naturally become less involved in the day-to-day execution of their team’s tasks. But I strongly disagree. Everything flows from the top. Ineffective, bloated management inevitably leads to bloated, ineffective businesses. The key to success is maintaining lean operations, staffed by people at all levels who can execute the company’s goals and missions directly. This is the fastest—and most reliable—way to deliver real value, rather than the "spray and pray" approach that dominates many organizations.
A striking example of this was when I joined a company with over 150 reports. While not all were direct reports, there were multiple layers of inefficient middle management. These managers excelled at running pointless ceremonies and producing colorful reports designed to obscure the underlying inefficiencies and plummeting morale.
The team was drowning in bloated Agile ceremonies, led by toxic managers who berated staff to compensate for their own inability to iteratively deliver small, measurable slices of value. This same team had been "building" for over five years, burning through $110 million in the process—with nothing to show for it. Management’s focus on growth, rather than first principles, resulted in a product that was neither usable nor operationally sound.
I’ll cover how I addressed and fixed this in another post, but in short, we reduced the product and engineering organization from 150 people to just 30. The result?
- Morale skyrocketed—people could finally see the impact of their work.
- We "rebuilt" the failing product with a new focus on delivering solutions that met user and business needs.
- Customers were delighted with the improvements.
- Most importantly, we set the business on a clear path to profitability, signaling to potential investors that the company was no longer just burning cash.
This transformation fundamentally changed the game for the business, making it more sustainable and attractive to investors.