Trading time for outcomes.
Why traditional organisational structures are killing innovation.
How should organisations structure themselves in an age of uncertainty and complexity, when the need for transparency is critical to efficiency?
The only constant in a startup post investment is change. Not prioritising the process of organisational design is one of the fastest way to burn venture capital.
I’m going to state the obvious – the thing that brought a startup success yesterday is not necessarily the thing that will continue to bring a startup success tomorrow. This is one of the biggest mistakes companies make when transitioning from being a seed stage company through to scale-up, and beyond – a failure to adapt and keep evolving restricts its ability to keep innovating at scale.
Succeeding in a startup is all about survival, staying alive long enough to reach the next milestone, deliver the next proof point that your company delivers some value, and that it can continue to generate value on an ongoing basis.
Organisational structures should be designed to align people around common goals, defining the way knowledge is generated and shared while forming the foundations of hierarchy, culture, behaviour and accountability. Organisational structures set the rules for how a company is run, directly influencing strategy and setting the pace and rhythm by which it functions.
When work is linear, hierarchical structures make a lot of sense — think Henry Ford and the assembly line in manufacturing — little is required of the workforce other than to complete the tasks assigned to them as quickly and accurately as possible, contributing to the completion of the end-goal (in Ford’s case, a car). In this model, communication flows from top to bottom and context is almost entirely lost.
Individual contributors play a very specific role and are responsible step in the process. Collaboration is not required to achieve the end goal. Employees are not empowered to make decisions, their main role inside a company is to follow instructions.
Software businesses and startups do not fit this mould, reaching the objectives a tech company sets out to achieve is not a linear process. Yet, as startups scale, it is also not productive to continue to rely on everyone to everything.
The right structure, right now
Choosing the right structure is difficult. The right structure today may not be the right structure for you in twelve months. And that’s ok. The important thing to identify is when a change is required, and then to move quickly to implement it, ensuring the people on your team are brought into the changes that are coming. Some people, even your best people, may not be able to adapt to change. And those people may not stick around for long, and that is also ok.
When going through this process, consider the following as a priority.
Flow of communication: Ensure that the organisational structure you choose encourages open communication and that knowledge is a commodity shared by as many people as possible. This is shifts away from individual contributors being single points of failure to a structure where more of your team can contribute. This can be disruptive for members of your team who use knowledge as leverage.
Collaboration: The more you can facilitate both cross-functional and interdepartmental collaboration, the better. This helps with the above point as well as encourage a higher velocity of output. Multiple perspectives employed to solve a problem almost always end up with better results, a higher quality output.
Accountability and ownership: Ensure you create a structure that empowers your teams to feel ownership of their work, when what they deliver is good and when what they they deliver is bad, give your team freedom to make mistakes and the sense of accountability to fix them.
As companies become more successful, the need to distribute knowledge and collaborate across different functions of the business becomes critical to ongoing success and scalability of both the technology and the people. The only constant in a startup post investment is change.
Change, though, brings it’s own complexity. Each stage of change comes with a shift of focus and a new set of priorities, usually directly linked to a change of business priorities. Facilitating change at this scale requires alignment across the business, accompanied by clear communication as to how the transition from one structure to the next is going to propel the organisation toward achieving its goals.
As companies become more successful, the need to distribute knowledge and collaborate across different functions of the business becomes critical to the ongoing success and scalability of both technology and people.
When organisational design is ignored, innovation is stifled.. The faster you go, the more mistakes you make, the more opportunity to fine tune and remove those mistakes from occurring over and over. This provides startups with something even more precious than funding, it buys companies time. Time to make your processes and people more efficient and more effective at finding solutions that propel your business forward.
This hierarchical organisation is outdated in the modern world, particularly in the context of modern software development, where the work is anything but linear. Time is less of a commodity, value and outcomes are more important. The more collaboration you can create, the momentum you can generate, the more likely you are as a team to deliver those outcomes. The more you can achieve that feeling of winning, you’re more likely to win again, and hopefully keep winning.
This is the first in a series of pieces focusing on the topic of organisational design in the context of tech startups.
