How HelloFresh Reorganized its Teams to Scale Twentyfold
Over the last three years, HelloFresh’s engineering and digital product organization (a.k.a. “HelloTech”) multiplied from only a handful of people to over 200 and counting — and Director of Engineering, Paulo Andre, has been there for the entire ride.
“The last few years, I’ve had a seat on a rocket ship. It’s been a fantastic opportunity to see a fast-paced company go through these growth stages, feel a need for change, and then explode with speed over and again.”
When Andre moved to Berlin to join HelloFresh, he encountered a sparkling new set of challenges, from the technology to the competitiveness of the market and just how fast the company was about to scale. In hindsight, he believes he wasn’t quite prepared for it — but he still has successfully navigated more than twentyfold growth.
“As you can imagine, I’ve seen a few variations of our organizational structure, and I’ve been fortunate enough to have had a part in orchestrating these iterations,” Andre says. “There are these natural points in time — like growing pains — where we might be slowing, or people are not working as well together, and we need to evaluate how our organizational design is serving us.”
In the beginning, that might have meant a reorg. But because HelloTech has taken a thoughtful approach to how their teams are structured at scale, they no longer need to think a complete reorganization anymore — only iterations on their current structure.
HelloTech structured their teams in a way that was iterative, adaptable, scalable, and ultimately beneficial to the company’s customers. In this interview, Andre explains how and why they restructured their teams, and shares the underlying principles that drove its last major reorganization.
How to know when it’s time to restructure your teams
Most of the time, companies are slow and fearful of the idea of a reorg — and they’ll typically make the decision too long after the growing pains kick in. So how do you know when it’s time to redesign your organizational structure?
Andre puts it simply: “A lot of shit starts to hit the fan,” he laughs. “And it’s a common occurrence, too. Things just start to break. Teams aren’t communicating as well as they could with each other, handoffs become slower and more difficult, there was some confusion around responsibilities, and so on.”
The specifics of what hits the fan will vary between organizations — but what seems to hold true is that what worked at 10 people, doesn’t work at 30 and beyond. Andre says that when HelloTech undertook their final reorg within the last two years, they ultimately did so because they started feeling like they were losing steam.
“At the time, we didn’t have the data to support our intuition,” Andre recalls. “But we sensed that there were too many dependencies between the teams. Communication became a little sluggish. It was really this feeling that things were starting to get slower and slower, and we didn’t want to grind to a halt.”
HelloTech knew that the problems they were seeing were symptoms of a larger issue, so they looked at the structure and processes they had in place. They ultimately decided that what their teams needed was greater clarity, purpose, and autonomy.
“We ultimately want everyone to have clarity and purpose. What does this team care about? What are our core KPIs? How does this land with the business? We want everyone to feel aligned with the overall mission.”
So HelloTech adopted Spotify’s concept of Tribes, Squads, Chapters, and Guilds in a way that worked with their organization (they considered naming the groups of teams something food-related, but eventually used Spotify’s nomenclature to avoid confusion). The underlying goal of this structure is to create teams that are self-contained, autonomous, and intensely focused on the customer. Andre says the primary reason they chose this model was because of its scalability.
For context, here’s a brief overview of how this structure is typically set up:
- Each Squad usually has 5 to 10 people. They are organized around a specific product or problem, and have all the skills they need to own the end-to-end responsibility for what they build.
- Squads that are within the same business area are grouped together and are called Tribes. There are typically less than 100 people in a tribe, and they’re organized around a specific mission.
- Chapters are a group of functional experts across Squads (e.g., engineers, designers, and product owners).
- A Guild is a community of members with shared interests. These are a group of people across the organization who want to share knowledge, tools, and best practices.
Now, when HelloFresh starts feeling as though things are slowing down, they don’t have to undergo a complete reorganization — they simply iterate on their current model. Andre says they’ve had a 1.1 reorg, a 1.2 reorg, 1.3, but these are merely iterations on the design they already have in place. And now, the teams can grow and change much more organically, and the organization is much more agile.
From monolith to microservices
When companies redesign their organizational structure, they need to ensure that their strategy and architecture are aligned as well. Any misalignment between structure, strategy, and architecture will create friction — and its execution will be slow.
Even more, if you’ve experienced Conway’s Law, you know that an organization’s structure has a substantial impact on the software architecture — and the interplay between the two is difficult to work against. So because HelloFresh wanted to restructure their organization around multiple small and nimble teams, they decided it was time to break down their monolith as well.
“Once you transition to cross-functional teams, that’s when it all starts to really click,” Andre explains. “The thing HelloFresh did especially well as it came to this realization, was to put in a lot of thought and groundwork from a platform reconstruction perspective. It wasn’t just a, ‘Let’s break this apart and then hope for the best.’”
As they orchestrated the platform reconstruction, they thought through how the moving pieces would work together and communicate with each other. They built the first version of the infrastructure to enable them to incorporate microservices at scale. Now, HelloFresh is approaching a hundred microservices, which Andre feels is pretty significant for a company HelloFresh’s size.
How HelloFresh continues to stay ahead
Though HelloFresh considers their new organizational structure to be their ‘final reorganization,’ as they rocket into the next few years with even more ambitious hiring plans, they are constantly evaluating how their teams are working and looking for ways where their structure, process, or strategy could be improved.
“HelloFresh is the market leader, so there really is no ‘catching up’ with competitors at this point,” Andre says. “What we’re focused on now is staying ahead, seeing what’s on the horizon, and discovering new paths for improvement. It’s about seeing where we are and asking, ‘where do we take this now?’”
Building a data-driven culture
“Nowadays, everyone says they’re data-driven,” Andre says. “It’s very easy to say, and the reality is that companies do collect a ton of data. But turning that information into insights is a completely different story.”
Andre explains that the latest major shift for HelloFresh has been toward implementing data-driven decision making throughout the organization. “It only makes sense for us to have data more embedded in our teams, in order to correlate the inputs with the outputs — what are we building, how are we building it, how is it being used, and where can we improve along that life cycle.”
Andre says that the most recent iteration on their organizational structure (the “1.3 reorg”), was fully focused on truly embedding data within the squads and tribes.
Reorganizing teams takes time, and comes with plenty of trial and error. It’s important to continuously communicate the how and when of each transition, Andre told us, even if the changes are slight. When people go into a transition without a clear understanding of what’s going on, it typically takes time to reorient themselves under the new structure which may cause the company to lose momentum for a few weeks.
But because HelloFresh is proactively looking ahead, they’re able to communicate early and often about what’s next for the company, when changes will be made, and how those changes will affect different teams.
“HelloFresh is the market leader, so there really is no ‘catching up’ with competitors at this point. What we’re focused on now is staying ahead, seeing what’s on the horizon, and discovering new paths for improvement. It’s about seeing where we are and asking, ‘where do we take this now?’”
Get Engineering Impact: the weekly newsletter for managers of software teams
Keep current with trends in engineering leadership, productivity, culture, and scaling development teams.