Setting up for Speed and Alignment

Make the org chart match the mission. Startups tend to grow organically. Like a forest regrowing after a fire, some parts of the organization will grow faster than others and legacy constraints will sometimes interfere. If left unchecked, you’ll end up with an organization that isn’t designed to accomplish your current and future goals. Recognizing this sooner rather than later will let you build the optimal structure. If you’re growing quickly, it is a problem you’ll need to solve every few quarters on some scale. 

My 5 step model for creating and maintaining organizational alignment

Redraw your “machine.” 

Think of your company as a machine with many sub-machines (departments). Each machine that takes an input and produces an output. If you abstract it like this and think of it dispassionately it allows you to more accurately model the constituent machine pieces. For this exercise you should take the role of architect or organization engineer more so than common cog or on-the-ground manager.

So, what do I mean by redraw? Start with your next major milestone. What is it, and what are the outcomes that will help get you there. From there, you need to model the parts of your machine that produce those outcomes (how many leads, how many sales, what churn rate, etc.) Draw the model for how your business needs to operate to hit those milestones without employee names. It’s important to do it without names to allow you to think about the model, not the people. 

Next, optimize the model for hitting those milestones. Do you have the right departments, are they staffed correctly, and are they doing the right actions? Once drawn, you need to go back and add names to the model. Who will do what, and where do you have gaps between your current org and future org? Those identified gaps start to create your talent roadmap for the next period. Just remember, it’s best to focus on the “who” first before the what and how. The right person who is value-aligned with the ability to do the role is way more important than the wrong person who has the right skills. Value alignment will result in more mid and long term wins than short term skill alone -- if it’s skills you’re after you can always look to hire a contractor or advisor. 

Align the reporting lines

Simplicity rules the day in startup organizational design. It’s important to align parts of the organization that are likely to have friction in the same reporting lines. It creates additional complexity and burden if two senior managers have to debug with either the CEO or another senior leader to align their orgs. Better to have them report to the same place. Remove potential friction to increase the potential output of the machines. 

Solve for what you know. 

When redrawing the machine, it’ll be tempting to think too far into the future and optimize for a fanciful reality. Do not do that. Instead, optimize for a future that you can predict with moderate certainty. In practice, this means you probably need to look a year ahead, not 3 or 4. 

Be explicit. 

There will be times when you give someone more responsibility due to a current business constraint. That is fine. But what’s not fine is not being explicit about it. For their sake and yours, you must be clear when something is temporary and ,if appropriate, what it would take for that “temporary” ownership to become permanent. If permanence is likely impossible, you need to set that expectation upfront.  

Optimize more for outcomes than control. 

As a founder, your inclination will often be to optimize for control. This is wrong. In order to set your organization up for speed and alignment, you need to optimize for outcomes. Focus on what needs to get done, not how much influence you have over that. The sooner you make this mind shift, the easier it will be for both you and the organization to scale.

Redraw the model frequently. 

If you revisit your model regularly with rigor, you can likely make micro-adjustments instead of macro adjustments to your organization. It’s easier to nudge than push and much easier to push than rebuild.

In-practice

When executed well, the organization is free to focus on outcomes, but when done poorly a politicization can happen where leaders politic for their organizations and projects instead of what is in the best interest of the company. It’s best to avoid the sideways work that comes with politics and instead align your organization for long term success by following these 5 steps.