Author: Iain Bishop, founder and CEO, Damilah
There are few professional tasks worse than scaling down a team. Yet every seasoned CTO is likely to have to go through the process at some point in their career, and for many organisations, the pain of this has been particularly sharp in recent years.
In this article, I share my three-pronged resourcing strategy for scaling teams to allow you to scale up and down quickly and painlessly.
Why do you need to scale?
There can be countless reasons why scaling may be required. These could include investor demands, business challenges, an economic downturn, war and a pandemic. And who knows what else can result in a requirement to reduce costs by cutting head count?
But these aren’t just heads. These are people—and because you’re a good manager, you care about them. You’ll have spent time helping them develop their careers and improving their technical skills and various other skills. You’ll know them as individuals and may have socialised with them, their partners and their families.
When the scale-down happens, in the first instance, you may need to put many roles at risk, creating widespread uncertainty as people worry about their livelihoods. Then, you may have to lose some outstanding colleagues whom you’ve nurtured over the years and may count as friends.
It’s really, really hard.
It might not be a one-off
What’s more, you may get away with this once by explaining it’s a one-off situation that won’t happen again. But what if it’s not? Rarely will you be able to go through a similar process again without risking the best of your team quitting and leaving behind a demoralised group with whom you’ve destroyed all trust and the great working relationships you once fostered.
Create a scaling strategy
I’ve been there myself several times. Over the years, I’ve developed a highly effective strategy for avoiding this kind of problem, which allows you to scale up and down quickly and painlessly.
It involves a three-pronged resourcing strategy: your onshore team, a partner nearshore team, and your own nearshore team.
Rather like the way we all use cloud-based services to expand and contract the tech resources we need as and when required—and only pay for what we use—this strategy enables you to grow and flexibly reduce your team while optimising costs.
The difference, of course, is that we’re talking about people here—humans who have feelings, livelihoods and dependents— meaning the stakes are so much higher than when we’re dealing with tin and wire.
How the strategy can succeed
Here’s my advice on how to make this strategy work to everyone’s advantage:
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Establish your core onshore team
This is the obvious place to start. This team will tend to be comprised of people who may have been with your organisation for some time. They are likely to have deep domain knowledge and the technical skills and understanding required to build and maintain your products.
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Work with a partner to integrate a nearshore team
Here at Damilah, we call this ‘partner-shoring’. This means leveraging the cost benefits of nearshoring by partnering with a firm that can provide a high-quality team capable of seamlessly collaborating with your own.
The costs won’t be as low as with your own nearshore team (see below), as the partner firm will need to take a margin. However, there are many advantages of using a third party to help you navigate the challenges of nearshoring.
First and foremost, it allows you to scale up rapidly with people who are known entities and ready to go from day one. And you don’t need to worry about aspects like recruitment, HR, career development and so on, as the partner firm will deal with those. You’ll just need to manage the projects.
It also gives you the flexible bandwidth to handle the peaks and troughs of workloads cost-effectively, as you can bring people on and off-line as required. As well as giving you the mechanism to scale up quickly, it protects you from the risk of having to scale down in the future, as this is the first team you can cut with the least amount of pain. In general, their jobs are more likely to be safe as they can be deployed on other accounts within their company as it seeks new clients.
Additionally, it enables you to build an understanding of the different cultures, legal frameworks, and myriad of other challenges of running a team in an offshore location. Which leads to the final step…
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Build your own nearshore team
This may be less expensive than working with a nearshore partner, but it’s far harder to do.
Beyond cost, the big advantage is that it can give you access to the kinds of talented people that are more challenging to find in your own country. For example, it may be easier to recruit a younger team with a better gender balance and with technical skills that are harder to hire back home.
This kind of team can add a huge dose of energy and enthusiasm to your home team, and a smart blend of mature, onshore experience with youthful, offshore passion and determination can be powerful.
Building up a strong nearshore capability can be time-consuming (it could take nine to 12 months minimum to become established). However, once you get there, it can add a lot of value to your business.
Making it work
The key to success is that all three teams blend effectively. The way to do that is to foster a culture of transparency and collaboration, where autonomous teams with the same goals and mindset will work closely together to deliver outstanding outcomes aligned to your business requirements.
Therefore, it’s important to look for compatibilities in working and problem-solving methods.
Face-to-face contact is always helpful here, both in the office and outside. For example, if two people have shared a drink in the past when there’s a challenge, it might be easier for them to pick up the phone and thrash it out than if they’ve only ever communicated by email or Slack.
Put simply, your nearshore teams should feel like extensions of your home team.
In conclusion
Nothing is ever certain in this world, but by following this strategy as a CTO in the past I have been able to introduce flexibility into resourcing, minimise cost, whilst retaining (and protecting) core expertise.
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