Lessons from scaling Stripe | Claire Hughes Johnson (former COO of Stripe)
Claire Hughes Johnson, former COO of Stripe, discusses scaling companies, management, and leadership. She shares tactical advice from her new book, "Scaling People," covering personal operating principles, building company operating systems, and effective communication strategies.
Deep Dive Analysis
17 Topic Outline
Motivation and Learnings from Writing Scaling People
Key Lessons from Stripe Co-founders John and Patrick Collison
The Importance of Early Organizational Structure and Career Ladders
Stripe's Unique Approach to Job Titles and Hierarchy
Why Founders Must Scale the Company, Not Just the Product
Defining and Crystallizing Personal Operating Principles
Tactical Advice for Saying Uncomfortable Things Effectively
Management as an Explorer, Not a Lecturer
The Principle of Coming Back to the Operating System
Company Structure Explained Through the House Metaphor
Founding Documents Essential for Early-Stage Companies
Components of a Company's Operating System
Optimizing Company Operating Cadence and Review Frequency
Understanding the Need and Qualities of a Chief Operating Officer
Strategies for Maintaining Alignment in Fast-Scaling Companies
Best Practices for Running Effective Meetings
Advice for Aligning Teams and Making Decisions as a Manager
6 Key Concepts
Personal Operating Principles
These are core beliefs and work style tendencies that guide an individual's actions and leadership. They are foundational to self-awareness and effective management, helping leaders understand their motivators, strengths, and blind spots.
Explorer, Not Lecturer
This management philosophy emphasizes that a manager's role is to enable team members by being curious and exploring patterns with them, rather than simply being an expert who tells people what to do. It involves asking questions, making observations, and holding up a mirror to help individuals improve.
Say the Thing You Think You Cannot Say
This communication principle encourages direct yet non-threatening feedback. It involves detoxifying internal commentary, asking questions, and owning one's observations rather than passing judgment, thereby opening doors for broader discussion and improvement.
Company Operating System
A set of common, consistent practices and rituals that provide stability and predictability in a chaotic, high-growth environment. It includes structures for goal setting, business reviews, planning, and metrics, allowing for replicable velocity across different levels of the company.
Founding Documents
These are essential written artifacts for a company, including a clear mission statement, long-term goals (detailing why the company exists and what it aims to accomplish), and company values or operating principles. These documents guide employee choices and provide a shared understanding of purpose and culture.
Operating Cadence
This refers to the rhythm and frequency of a company's work, often dictated by calendar-based events (e.g., quarterly reviews) or event-driven milestones (e.g., customer events). A well-defined cadence ensures predictability, helps teams march toward common goals, and prevents unnecessary overhead.
10 Questions Answered
While product-market fit is paramount, building the company's operational and cultural fabric early prevents future collapse, allows for scalable growth, and ensures that the organization can effectively deliver on its mission as it expands.
Start by selecting top values from a list, forcing down to three, and then reflecting on the formative stories or experiences behind each value. Combine this with work style assessments (e.g., Myers-Briggs) to understand tendencies and defaults.
Detoxify your internal commentary, then ask a question to open the dialogue, and own your observation as your perception rather than making a judgment, which makes the feedback less threatening.
Adopt an 'explorer, not lecturer' mindset by being curious and using hypothesis-based coaching. Take some data, form a well-informed intuition (hypothesis), and then explore it with the person to help them see patterns or areas for improvement.
A company's operating system includes a structure for setting annual numeric targets and goals (like OKRs), a system for reviewing business progress (e.g., QBRs), defined planning processes, and clear metrics and dashboards to measure progress.
The cadence is likely too fast if insufficient progress is made between review functions, and too slow if the content being reviewed feels stale or if strategy discussions are forced into metrics reviews.
Most companies don't have a COO, but the role can be useful in high-growth environments where the founder/CEO needs leverage to build the company, hire leaders, and bring in operational experience, especially in businesses with deeply operational components like manufacturing.
Invest in smart, multi-channel communication practices, understand that one message is rarely enough, and consistently repeat core messages across different formats (emails, all-hands, videos, internal sites).
Clearly define the objective of the meeting (e.g., make a decision, share information), explicitly state who needs to be there, and make explicit what is often implicit, such as who is making a decision and by what criteria.
Make the decision to be made explicit, including who is making it and the criteria. Pick a decision model (like RACI) and follow it consistently, and evaluate the type of decision (e.g., high impact/irreversible vs. low impact/reversible) to guide the process.
36 Actionable Insights
1. Cultivate Self-Awareness
Prioritize cultivating self-awareness, including understanding your motivators, strengths, blind spots, and tendencies. This is the most fundamental element for effective company building and management.
2. Actively Seek Feedback
Actively seek feedback about your motivators, strengths, blind spots, and tendencies, then take it on board and expose it to others. This practice enhances your effectiveness as a company builder and manager.
3. Define Core Personal Values
Identify your top three core personal values by narrowing down a list, and understand the formative stories behind why each value is important to you. Documenting these values and their origins aids in self-discovery and clarifies your operating principles.
4. Assess Work Style Tendencies
Use various work style assessments (e.g., Myers-Briggs, DISC, Enneagram) to understand your tendencies, such as introversion/extroversion and task/people orientation. Plotting these alongside your values helps clarify your unique operating style and defaults.
5. Say the Unsayable Constructively
Practice saying difficult truths by detoxifying your internal commentary and framing observations as questions or personal perceptions, not judgments. Own your observations (e.g., “I feel like,” “I wonder if”) to make them less threatening and open a dialogue for shared understanding.
6. Foster Open Feedback Environment
Prioritize creating an environment of high trust where team members feel comfortable giving direct, even blunt, feedback to leaders. This open feedback loop is crucial for getting things done and improving performance.
7. Enable Team Performance
As a manager, shift your mindset from being the expert who tells people what to do to enabling your team members to perform at their best. Create an environment, context, and provide information and coaching to support their growth.
8. Coach with Hypothesis-Based Exploration
Adopt a coaching approach that’s exploratory and curious, rather than lecturing. Form a hypothesis based on some data or intuition about a team member’s work pattern, then explore it with them to collaboratively discover areas for improvement.
9. Provide Behavioral Feedback
Offer behavioral feedback by holding up a mirror, describing your personal experience or observation of someone’s actions (e.g., “my experience of you was…”). This helps individuals become aware of non-verbal cues or patterns they might unconsciously exhibit, prompting discussion on how to vocalize discomfort instead.
10. Be a Force for Momentum
Strive to be a force for positive momentum in your work, as this approach can significantly advance your career. Focus on progress and impact to drive forward motion.
11. Act as the Decision Maker
If you’re unsure who the decision maker is, assume it’s you and act accordingly to avoid slowing down the company. If you’re worried it’s not you, ask directly to prevent getting stuck and hindering progress.
12. Clarify Decision-Making Process
To overcome decision paralysis, explicitly define who is making a decision, the criteria, and who will be informed, using a chosen decision model (e.g., RACI). Evaluate the decision type (e.g., Bezos’s Type 1/Type 2) to determine its impact and reversibility, then follow the process to make it.
13. Run Explicit, Purposeful Meetings
Run more effective meetings by making the implicit explicit: clearly state the meeting’s objective (decision, information sharing), who needs to be there, and who is making the decision. Inquire if the meeting is truly necessary and if some attendees can be updated asynchronously.
14. Create Stability Through Rituals
In chaotic and ambiguous environments, actively create stability by establishing rituals and common practices (e.g., quarterly goals, planning cadence). These shared routines provide a predictable framework, preventing paralysis and further chaos.
15. Commit to Few Consistent Processes
Instead of constantly adopting new processes, commit to a few core operating practices and execute them consistently and well. This prevents a “grab bag” of ineffective systems and allows for annual revision rather than frequent, chaotic changes.
16. Don’t Let Perfect Be Enemy of Good
When implementing systems or processes, prioritize having a functional one and committing to it, rather than endlessly seeking perfection. Accept that there will be flaws and work around them, as striving for perfection can hinder progress.
17. Codify Mission, Goals, Principles
Create foundational documents like a clear mission statement, long-term goals (detailing why the company exists), and operating principles/values. These documents guide employee choices, ensure alignment, and help mutually match with candidates.
18. Document Answers to Common Questions
If new hires or employees frequently ask “what’s important?” or “why do we do it this way?”, it’s a clear sign to document and codify your company’s mission, goals, and processes. Writing things down crystallizes understanding for everyone.
19. Establish Core Operating Systems
Implement core operating systems including structured goal setting (e.g., annual targets, OKRs), regular business reviews (e.g., QBRs with templates), and clear metrics/dashboards. Additionally, commit to a planning process, even if imperfect, to measure progress against your strategic plan.
20. Customize Operating Cadence
Customize your operating cadence (e.g., for business reviews) to fit your company’s needs, rather than strictly adhering to traditional timeframes like quarterly. Adjust the frequency (e.g., to every six weeks for rapidly developing areas) to ensure predictability for teams and appropriate progress measurement.
21. Adjust Cadence Based on Progress
Adjust your operating cadence if reviews show insufficient progress (too fast) or stale content (too slow). Ensure there’s new, fresh content for each review to avoid creating unnecessary work and to keep discussions timely and relevant.
22. Avoid Overhead in Metrics Review
Be wary of creating overhead by thinking more frequent checks automatically increase speed; it can actually slow velocity. Instead, review live, real-time dashboards directly in meetings to avoid wasting time on preparing special presentations and ensure data is current and accessible.
23. Multi-Channel Communication Strategy
Develop a multi-channel communication strategy, recognizing that a single email or all-hands meeting is insufficient to reach everyone. Use different channels (e.g., intranet, newsletters, videos, Slack) and repeat key messages, similar to a marketer, to ensure broad understanding and alignment.
24. Leader as Repeater-in-Chief
Embrace the role of “repeater-in-chief” as a leader, consistently reiterating core messages and strategies across various channels. Repetition is essential for ensuring alignment and understanding within a scaling organization.
25. Utilize Offsites for Cohesion
Use offsites as a vehicle to pull people out of their daily routines, creating dedicated space for focused work, brainstorming, and group experiences. This helps imprint shared memories, cement belief systems or plans, and foster collective ownership of decisions.
26. Seek Knowledge from Others
Actively seek advice and help from others, especially those who have done similar things before, to gain valuable knowledge and accelerate your learning. Don’t hesitate to make phone calls and ask for insights from experienced individuals.
27. Implement Job Levels Early
Implement job levels and ladders earlier than you think necessary, even if it’s imperfect and challenging. Having a defined structure prevents unfairness in compensation and rewards, which can arise as the company grows.
28. Avoid Premature Senior Titles
Avoid giving out overly senior titles (e.g., CMO) too early when teams are small, as it limits organizational flexibility and can lead to resentment when restructuring is needed later. Maintain flexibility to prevent people from feeling like they’re losing something when new layers are added.
29. Creatively Represent Your Scope
When interacting with larger, more established companies, creatively represent your broad scope and responsibilities rather than inventing a senior title. This provides selling flexibility by matching their hierarchical expectations without over-titling internally.
30. Build the Company, Not Just Product
Once you hit product-market fit, shift focus to intentionally building the company’s operational and cultural structures, not just the product. Neglecting company building will prevent the product from scaling effectively.
31. Share Investor Story Internally
Share the company’s vision, problem, and early customer feedback (often used for investor pitches) internally with all hires. This foundational content helps guide choices and align employees.
32. Develop a Structured Hiring Process
Establish a structured hiring process early on, even pre-product-market fit, by defining talent needs, evaluation methods, and training interviewers. Interviewing is a learned skill, so provide rubrics and questions to improve candidate assessment.
33. Outsource to Scale Faster
Go faster on intuitions about using vendors and outsourcing parts of your model, especially when scaling rapidly. Push through the difficulty of integrating external contractors, even if internal tools and processes aren’t perfectly figured out yet.
34. COO Not Always Necessary
Recognize that a COO role is not an automatic or universally required hire for most companies, as fewer than 30% typically have one. Evaluate specific needs for leverage in high-growth or operationally intense environments rather than assuming it’s a default.
35. De-Risk COO Hiring
De-risk the COO hiring process by first bringing in a Head of Business Operations or a similar COO-like role to test their fit and scaling capabilities with a few functions. Alternatively, empower an operational CFO or a business ops leader to expand their scope, providing leverage without the full commitment of a COO title.
36. Foster Productive Tension
A fantastic COO-CEO relationship thrives on the right amount of productive tension, characterized by mutual understanding, trust, and the ability to challenge each other. This dynamic allows for both clear delegation and constructive friction, leading to outcomes greater than the sum of individual efforts.
7 Key Quotes
If you're not sure who the decision maker is, one, it's probably you. And I'd rather you act that way than not because you're going to slow the whole company down.
Claire Hughes Johnson
The more that you can seek feedback, seek to understand your motivators, your strengths, your blind spots, your tendencies, and take that on board and expose it to others, you're going to be a much more effective company builder and manager.
Claire Hughes Johnson
There is no one. There's no perfect org structure. There's no perfect operating approach. There's no perfect, yeah, performance and management and level system. But having one and committing to it is good. And don't let the perfect be the enemy of the good.
Claire Hughes Johnson
Fantastic COO is just the right amount of friction and tension with forward momentum and mutual trust. Because then the whole is greater than the sum of its parts.
Claire Hughes Johnson
Never think that one communication, meaning an email or an all-hands, reaches the audience. You have to be smart about how you communicate.
Claire Hughes Johnson
The work of a meeting is not calling the meeting. Calling a meeting is easy. In fact, that is a problem. The barrier is very low and it should be higher.
Claire Hughes Johnson
Be a force for positive momentum. And you will it will be actually a real career maker.
Claire Hughes Johnson
4 Protocols
Crystallizing Personal Values
Claire Hughes Johnson- Take a list of 70-80 different values and pick 10 that matter most to you.
- Force yourself to narrow down to 5 values.
- Further narrow down to your top 3 values.
- For each top value, reflect on and articulate the formative story or experience that made it so important to you.
- Combine these values with insights from work style assessments (e.g., Myers-Briggs, DISC, Enneagram) to understand your work style tendencies.
Saying Uncomfortable Things Effectively
Claire Hughes Johnson- Learn how to 'detoxify the left-hand column' (your internal running commentary).
- Ask a question to open the dialogue.
- Make an observation that you own (e.g., 'I feel like...', 'My experience of you was...'), rather than passing judgment.
Running Effective Meetings
Claire Hughes Johnson- Clearly state the objective of the meeting (e.g., to make a decision, to share information).
- Explicitly define who needs to be present.
- Inquire whether the meeting is truly necessary or if some attendees could receive a note afterwards about what happened.
Driving Decisions
Claire Hughes Johnson- Make it explicit that there is a decision to be made.
- Clearly state who is making the decision.
- Define the criteria by which the decision is going to be made.
- Identify who will be informed of the decision.
- Evaluate the type of decision (e.g., high impact/irreversible vs. low impact/reversible).
- Follow the chosen decision model (e.g., RACI, radar) and get it done.