The product you sell will be a reflection of the organization you design.
The design of your organization is a fundamental part of your Operating System. Don’t let it be something that happens to you passively. Deliberately design your organization to execute, communicate, project manage, and achieve your goals by following these five guidelines.
1. Your org chart sends a message to the team. Send the right message.
When you elevate or demote a person or department, you’re sending a message to the company.
When you elevate or demote a department, you’re highlighting the importance or lack of importance of that department. For example, the departments that have a spot on your executive committee sends a message to the company. Having a role that isn’t as commonly on the exec committee, such as Chief Human Resources Officer, Chief Customer Experience Officer, Chief Privacy Officer, or Chief Security Officer, shows that your organization values those areas. The opposite signals a department’s lack of importance.
When you elevate or demote a person, you’re saying this person has done the kind of things we look for and reward. If you promote the political people, other people will notice and imitate. If you promote the best operators, other people will notice and imitate that too.
What messages does your org chart send? What messages do you want it to send?
2. Your org chart creates and empowers leaders. Create the right leaders.
Be deliberate about putting the right leaders in the right roles. The higher up in the org chart you put a department and person, the more power they’ll have.
Having the right leaders in the right roles will get the results you’re looking for. Having the wrong leadership will be full of unintended, negative consequences well beyond one person and one role.
First, make sure you have great managers by creating and promoting the best managers.
Second, make sure those great managers are in the right roles. Some managers can do anything. Some are better suited for one area or another. For example, an analytical COO might be perfect to run your data team but not customer support. A more people-oriented COO might be perfect to run customer support and HR but not finance. If customer support reports through your analytical, impersonal CFO, you may have an efficient, inexpensive, insensitive customer support function that focuses on average tickets per hour and cost per response and not customer happiness. If customer support reports to the Chief Customer Experience Officer, you may have a highly satisfied customer who you lose money on because of how much time you spend on the phone with them. (Or either of those could work out!)
3. Your org chart is a building block for your communication system. Design your organization for communication.
Matrixed teams may do a good job communicating across the company and bringing their own diverse expertise and skills to an important goal. They also may have too many voices and too many interests to move a project forward.
Functional teams may have an easier time developing and tapping expertise and moving projects with less distraction. They also may over-optimize their function at the cost of the whole.
Teams that report through the same line will have to communicate and collaborate. Teams in different reporting lines will have an easier time working independently and ignoring each other. These scenarios could be good or bad.
4. Your org chart supports or undermines your Foundational Materials. Design your organization around those foundational materials.
Does your org chart align with and reinforce your Foundational Materials and goals? Does your org chart emphasize the same things that your values do? If your values emphasize people and culture, does your org chart reflect that?
Consider your Foundational Materials when designing your org chart.
5. Having structure, including an org chart, empowers people.
People will feel more empowerment and more ownership, if they know what’s expected of them.
With an internal job description, goals, and a clear manager, people will have targets and can work to hit them. People will know who to go to with questions, for feedback, and for support. People will feel secure and safe in a positive way that lets them focus on adding value to the organization and not waste time on office politics or figuring out what to be working on.
With those five guidelines in mind, you’ll be able to successfully design your org chart to achieve your goals, and you’ll be glad that the product you sell reflects the organization you designed.
Resources for Startup Operators 