Communication is the Connective Tissue of Scale

When growth equity firms talk about scaling B2B technology companies, they generally focus on concepts like product-market fit, strong unit economics, a repeatable sales motion, and product depth and reliability at scale. Obviously, these are important factors in determining the potential to scale. But one factor that can be overlooked in assessing a company’s ability to scale is having robust communication practices and processes.

Any organization is fundamentally a collection of human beings. So, how those people interact, share information, and make decisions is vital to the organization functioning healthily, effectively, and efficiently. In the early stages of a company’s growth, communication happens naturally. Small teams are working closely together and develop natural communication rhythms.

But as a company grows, those teams will inevitably start getting split across functions and/or verticals. As this happens, maintaining strong communication requires three things: Leadership Focus, Process & Cadence, and Context & Clarity. Keeping these things in mind during the whirlwind of growth is essential to scaling successfully.

Leadership Focus

While How Google Works missed the cut as one of our Top 3 most influential business books, it is an excellent read full of practical advice for any operator. The chapter on communication tells the story of Jonathan Rosenberg being told by a software engineer, “You’re just an expensive router.” The remark was meant as an insult, since routers just move packets of data around a network. Jonathan replies, “If all I am is an expensive router, I intend to be a damn good one.” He recognizes that focusing on sharing information with relevant stakeholders is an essential part of leadership. The book emphasizes that strong leaders are open and transparent, know the details, and keep people informed.

Being “a damn good router,” as the book implores, requires relentless focus on communication. When presented with new information or when making a decision, we trained ourselves to ask questions like “Who needs to know?,” “Who needs to know first?,” and “What is the best form of communication?” The more senior the leader, the more important the questions become, and the broader the stakeholders become. “When does the Board need to know?” “How about our customers?” “How do we ensure that leaders can answer questions from their team on this topic?”

These questions sound basic, but in the hectic world of a growth company, they can be forgotten. We have recently witnessed multiple technology leaders casually mentioning important decisions in meetings prior to formal communication, which can lead to confusion and people making up their own narratives across the organization. Employees or customers learning about important news or decisions outside of formal communication channels undermines trust and confidence, which are essential to scaling. We have witnessed casual communication from leaders slow decision-making, undermine culture, and degrade performance. And we have seen focused communication drive successful corporate transformations.

Process & Cadence

The best lesson we learned on communication processes was from another great business book – American Icon: Alan Mulally and the Fight to Save Ford Motor Company. When Mulally left Boeing to join Ford as CEO, he quickly observed that communication issues were at the center of Ford’s decline to the brink of bankruptcy. Executives were afraid to report bad news, and thus hid operational flaws, poor performance numbers, and risks to the business.

Mulally launched a new, organization-wide, communication process called BPR (Business Process Review). Each team would have a BPR meeting to report on current performance against its objectives and KPIs in a Red/Yellow/Green format. Green meant on-track, Yellow meant that an issue had been identified but the team had a workable solution, and Red meant a major problem with no known solution. BPR meetings rolled up from teams to divisions to the executive leadership team. Each had the same format. And Mulally stressed that sharing Yellow and Red updates would be considered good news – a timely request for help – rather than bad news.

As Revenue Analytics grew, we implemented the BPR process. At first, there was grumbling about adding weekly meetings across teams and functions to the calendar. But we quickly realized the benefits of more formal and structured sharing of key information, product and customer status, and updates on strategic initiatives. We kept the updates brief, timed, and uninterrupted, with the goal of saving at least half the meeting to discuss Yellow and Red issues. BPR also served to align each team around what success looked like for that team, backed by KPIs that drove company performance. We believe that it was a key factor in achieving a 34% CAGR, even during the “great SaaS recession.”

Context & Clarity

Corporate commentator William H. Whyte once wrote, "The great enemy of communication, we find, is the illusion of it.” The quote critiqued the corporate management habit of high-level internal communication campaigns that lacked context and clarity.

In our experience, when a leader fails to provide sufficient context or clarity, people often fill-in the gaps for themselves. The results can range from inefficiency to confusion to chaos. If you have ever given a person (or an AI Agent) an assignment with insufficient context and experienced them coming back with something completely different than what you have in mind, you have experienced the “illusion” of communication.

To help ensure context and clarity, we adopted a framework from a leadership training from The Levinson Institute. In delegating work (be it an initiative, project, or assignment) you must always specify the Why (context on why we are doing this), How (the plan and how the team should work together to achieve it), and What (the specific deliverable or solution sought). Importantly, you must train your delegate on the framework so that they can ask clarifying questions and fill gaps prior to commencing work. Check-ins on progress follow the same framework.

The “What” portion of the framework had another layer to ensure clarity. We trained everyone on the Levinson acronym “QQTR” – Quantity, Quality, Timing, and Resources. On Quantity and Quality, we'd clarify the scope and whether we wanted a rough draft to brainstorm against or a near-finished deliverable. Discussing Resources makes it clear how much the organization and the individual are expected to invest in the work. And Timing is critical – as our former executive coach Bruce Longshore used to say, “A task without a ‘T’ is an ask.” For us, QQTR meant fewer iterations on deliverables and fewer project delays.

In summary, product-market fit, compelling unit economics, and a repeatable sales motion are necessary for scale, but they are not sufficient. Communication is the connective tissue that helps a rapidly growing organization execute against the market opportunities that these concepts create. If you don’t build communication as a muscle, the result is slowed decision-making, inefficient work, and organizational frustration. But when a company builds a foundation for strong communication, people align, momentum grows, and growth accelerates.