Warner Philips is one of the founders of Tendris. Tendris initiates, incubates and invests in businesses that are clean technology related.

There are some rules of thumb. It’s mostly related to how large the organization grows. So if you have 10-20 people that can typically be dealt with by one person. If you grow to 50 people you typically get a managerial level in between. If you get to the larger level there’s a different management style that you have to deploy, namely to challenge that management to do their best job to have their teams execute. That is just a very different style than ‘just’ leading the company yourself.

I have seen phenomenal, exceptional entrepreneurs who have been great at that first phase, but not great at that second phase. A strong entrepreneur namely has a very strong perspective on how a company should be run. He or she typically has the inclination to say: “I think you should do this” rather than “What do you think you should do”. In the second phase you have to be able to let management make their own choices while still holding them responsible and accountable for it. You hold yourself accountable if you are direct and tell someone what to do and how to do it.

Another aspect is that not all companies are alike. Some more traditional companies of 50 people or more would run production departments, marketing and sales etc. and organize accordingly. However, the biggest companies in a space these days in terms of market share are not necessarilythe biggest companies in terms of headcount. Take our LED business for example. It’s the biggest company in its space today, but it only has 50-60 employees on payroll. The reason for that is that we work in partnerships.

In partnerships people have internal and external responsibilities, so the organizations working with us and the total amount ofpeople working on our lighting products are overall actually much more than those 50-60 people. So that requires a different management style, as not all people that we are working with are directly under the managerial responsibility of our own organization. So that becomes a very different kind of organizational approach all together. That requires a different kind of manager than a team that is more internally and directly focused to their customers rather than co-operating with outside companies to achieve the same goal: teamwork and interdependency is key.

So what we typically love to do is when we face those challenges is gooutside and get help. Friends, business partners or professional advisors that help us adapt our organizations to the very dynamic market places that we are in. Again, take our LED business. We have gone from one product to a portfolio of products, multiple business lines, operational on all continents, throughout the supply chain. We are going up against the three big lighting companies: Philips, Osram/Sylvania and General Electric.

There are other companies coming in from, for example, Japan as well as low-cost Chinese manufacturers, so that creates a very competitive playing field. We need to tailor our organization to be very flexible, nimble and agile to play into all these challenges. So far we’ve been able to do that, also because we have been very unconventional about everything we do. From the products to the distribution channels to the organizational structure. So we are like “Nothing is Holy” you know. Maybe something has worked before, but we always think whether or not it must be changed to make it work this time. That kind of open mindset and the relentless drive to succeed and learn has worked very well for us.

Taken from “Startup Best Practices” (Conversations with Silicon Valley Entrepreneurs)