Goodbye, startup. Hello, corporation!
How can you avoid the inevitable slide towards a pyramid-shaped organization?
I know. You need to find a scalable business model. Fast.
But you’re a startup. And all startups already know that.
What you might not know, or might not pay attention to, is that the way we organize strongly influences the success of our businesses. And that shapes what our businesses will become in the future.
Consider for a moment your organizational structure. Does it look something like this?
Why?
You might not really know why your company looks like this. But I would argue that you have this structure because this is the way we have organized companies for hundreds of years. And very few companies reflect on this, to work out if it is actually the structure that would enable them to do effective work.
The hierarchy, the chain of command, and schemes of approval. Everything needs to be authorized.
It destroys innovation, motivation, collaboration, thinking out of the box. It is static and doesn’t respond well to change.
Embracing change should be at the heart of your startup. After all, the market changes, competitors change, and you need to pivot. The crisis is coming. Your organization needs to change.
But the pyramid is slow and domineering. The egos come into play and can kill new initiatives. How will your Head of Design understand that a restructuring is now needed, and that the designers who used to be underneath her need to work in the product team? That kind of rapid change in a pyramid will not be easy.
Okay, I get your point. But what’s the alternative?
There is something else. It’s called self-organization.
You have seen self-organization already.
It is present in nature. The human body works like this. Agile software development teams are accustomed to working this way.
Collaboration, decentralization, servant leadership and facilitation. The system guarantees the stability and efficiency of the organization without the need for an approving power.
But as your business grows, a greater amount of structure and processes is needed to maintain alignment. The hierarchy takes over and collaboration gives way to command and control.
Goodbye, agile teams. Goodbye, innovation.
Goodbye, startup. Hello, corporation.
The way you organize says a lot about you
Your startup grows, you hire a COO, a CTO, a CIO, a CPO, a CMO, a CFO, a CXYZ. And heads. Lots of area heads. People you trust who will keep things on the rails.
Really?
The hierarchical pyramid is great at controlling people and keeping things static. But in today’s times, you want everyone to collaborate and use their brilliant minds to innovate and generate value. You want adaptability.
The problem is that it’s difficult to innovate with a boss controlling your life, waiting for them to approve everything you do. You start blocking communication and protecting your area from the rest of the organization. It becomes a war of power, with each department defending its own side. Without realizing that everyone should be working towards the same goal.
Want to become a big corporation? Keep it up.
Want to remain young, innovative and disruptive, like the startup you once were? Embrace new models of management and organization.
The ‘Responsive Organizations’ are here
A few years ago, a new movement was born: that of Responsive Organizations. They came to transform the world of work. They aim to push all of the old things on the left hand side, to the right:
“So I kind of understood that. But where do I start?”
1) Stop working with anyone who just wants money, and start working with those who believe in your product (and purpose)
Money-oriented people seek shorter paths to meet their individual needs, sacrificing this for long term personal and organizational needs. These people really need to be supervised. Get away from them.
Look for those who connect with your idea and who like what they do. It is called intrinsic motivation. Generation Y fits well in this profile.
Note: Just because they are not there for the money does not mean you should not pay them properly! Pay them properly.
2) Create an adaptive, self-managed organizational structure
Bright people do not like to be controlled. To keep them, you must invest in adaptive structures that foster innovation. There are several ways to do this. From the Spotify model to Holacracy. Seek to understand what makes the most sense for your context and experiment.
Avoid becoming one more big, bureaucratic and slow corporation by working with passionate people. Rely on intrinsic motivation and self-managed structures. And don't forget to share your story with the world.
Davi is a friend of Flux and a Partner at Target Teal. Based in Brazil, they help organizations to adopt new social technologies that maximize adaptability, autonomy, learning, productivity, and innovation.
