The version you pass on
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A year into building Drop Bio Health, I caught myself thinking about growth in a way I never had at any company before it.
We were trying to put blood testing in people’s kitchens. A finger-prick sample, taken at home, used to catch chronic disease long before they could be diagnosed. And we were doing it in the middle of a pandemic, when the idea of anyone going anywhere near a clinic had become its own kind of problem to solve. Growth couldn’t look like it had at the other places I’d helped build. There was no established market to take share from. We were making the market as we went.
One night my mind wandered to the first mobile phone I ever owned.
It was miraculous. It let me do things I’d never done, be reached in ways I never had been, carry something in my pocket that would have seemed like science fiction a decade earlier. And it was terrible. It glitched. The screen was small and slow. The market it belonged to was still forming, and none of us had the faintest idea how far the thing in our hands would evolve. Nobody in 1997 was imagining 2026.
We look back on those early handsets as archaic. At the time they were the edge of what was possible.
Your organisation has the same story.
There’s a good chance you weren’t in the room when the founders landed on the first value proposition. Through some combination of perseverance, adaptability, and luck, the thing they built is still standing, and now it’s yours to lead. It glitched along the way. It carried limitations. Its market kept moving underneath it. And like that first phone, it was miraculous for its moment, because it worked at all.
That version got you here.
What will you do with it now?
Here is where most of us reach for the obvious answer. We run the organisation we inherited a little harder each year. We ask the same model to produce a bigger number, and when it does, we call that growth.
A phone doesn’t get better because you use it more. It gets better because someone redesigns it to create the next version.
The same is true about organisations.
And that’s why CEOs have two operate under two expectations: Focus on growth to hand their successor a bigger version of what they inherited and hand them an organisation in genuinely better shape than the one that greeted them.
That’s a compelling set of conditions for the next CEO and the next leadership team. It’s also the measure that outlasts any single year’s results, and it’s the one almost nobody is scored against.
Think of it as moving the organisation from one version to another. Not by accident, the way v1.0 came together, but on purpose.
What’s become clear from hundreds of conversations with CEOs is that there are five dimensions where that redesign happens.
1. How money is made
Every organisation monetises the first thing that worked, and then treats that as settled. The founders found a way to create and capture value, it kept the lights on, and it might have become the sacred cow. This is the box that incoming CEOs are most reluctant to open, because the original success lives here and questioning it feels like heresy. But the model that suited v1.0’s market rarely suits the market you’re about to enter. At Drop Bio Health, the obvious business was selling a test. What became clear over time was that the defensible value sat somewhere less obvious, in the technical and operational knowledge of how to keep a blood sample stable from a kitchen bench to a lab without it degrading on the way. Get that wrong and little else matters. That knowledge and the ecosystem built around it, not the test itself, was the thing competitors couldn’t easily replicate.
To move to the next version of how money is made ask: If a competitor copied your product tomorrow, what would still make you hard to beat?
2. Capability
A v1.0 organisation runs on the capability of the people who founded it. The knowledge, the instincts, and the judgement all live in a handful of heads, and for a while that’s enough. A v2.0 organisation has taken that capability and distributed it, so the business can do things that no longer depend on any one person. This is slow, unsexy work, and it’s the effort that determines whether the organisation can outgrow the people who built it or stays permanently anchored to them.
To move to the next version of capability ask: If your three most capable people left this year, what would the organisation no longer be able to do?
3. Decision making
In a v1.0 organisation, every decision that matters routes back to the founder. That’s how young companies move with speed and agility. It becomes an issue the moment the founder is the bottleneck for everything. Versioning this dimension means deliberately deciding where judgement is allowed to live. This means people across the organisation know which decisions belong to whom, how quickly the organisation learns from the ones it gets wrong, and how much of the thinking you’ve made it safe for others to do. Experience tells me this is the dimension leaders feel the most, because they become exhausted thanks to being consulted on everything.
To move to the next version of decision architecture ask: How many decisions still wait for you that shouldn’t?
4. Alignment
When an organisation is small, alignment is free. Everyone is in the same room, hearing the same things, pointed at the same goal. Nobody has to work at it. As the organisation grows, that shared direction degrades slowly and silently. No one decides to let teams drift apart. They just do, meeting by meeting, hire by hire, until two teams are optimising for goals that quietly contradict each other. A v2.0 organisation treats alignment as mission critical and gets reintroduced in most meetings.
To move to the next version of alignment ask: Where are two of your teams working hard toward goals that quietly cancel each other out?
5. Culture
Culture is what the organisation does by default when the pressure is on, and no one is watching. In a v1.0 organisation, that default is inherited entirely from the founders, from their blind spots to their most admirable qualities. The version question here is uncomfortable. Which of those inherited behaviours still serve the organisation you’re trying to build, and which ones are you keeping only because no one has thought to ask? I like to remember that culture that isn’t chosen is a collection of habits that hardened.
To move to the next version of culture ask: Which of your organisation’s default behaviours did anyone actually choose?
The interval between versions
It helps to see this at two very different scales, so let’s open with an enterprise of 5,000 people.
Its v1.0 was written decades ago, and the ambition baked into it was survival and then dominance in a market that has since changed shape entirely. Moving that organisation to its next version isn’t about doing more of what it does. The ambition might be to take a business that grew by acquisition and make it coherent, so that alignment stops being a quarterly reconciliation exercise and decision making becomes effective at its edges. The redesign is largely about capability and alignment, because those are the dimensions that grind to a halt at scale.
Now picture a startup of 10 people. It’s v1.0, barely 18 months old, and its ambition is simply to prove the thing works and someone will pay for it. Its next version might be the shift from founder-led everything to a business that can make money without the founder in every conversation. The dimensions in play are how money is made and decision making, because those are the ones that first limit momentum in a young company.
Different organisations, different dimensions, wildly different ambitions. Here’s what makes it useful. Give both of them the same interval between versions, say two years, and something changes in how they think.
When you know the next version is due on a date, you’re forced to decide what better means. Ambition stops being a vague pull toward bigger and becomes a specific answer to a specific question, asked on a schedule you set rather than one the market imposes on you.
None of these five dimensions move on their own. In fact, when left alone organisations to drift, and that compounds in the places you’re not looking.
Which brings me back to that phone.
The reason we can laugh at those early handsets now is that someone kept deciding they could be better. Redesigned, release after release, by people willing to question what better could mean.
You are, whether you think about it this way or not, building today’s version of your organisation that someone else will inherit. The only real choice you have is what kind of version you leave them with.
So, if your successor walked in tomorrow and had to run the organisation exactly as it stands today, would they find a v2.0 you designed on purpose, or a v1.0 you simply ran harder?
That’s all for this week.
See you next Wednesday.
Phil Hayes-St Clair
PS If this essay helped, Episode 230: A CEOs guide to creating capacity without hiring from my podcast is worth a listen. Tune in on Apple Podcasts, Spotify or wherever you get your podcasts.
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