Nov 2, 2018 | 3 min read

5 things to learn about Organization Design from Start-ups

Steve Jobs famously said that Apple is the world’s biggest startup. It was only because Apple has been able to replicate the energy of a startup through its flexible structure, small teams, decentralised decision making and easy to follow operational processes. In a rapidly changing business world, there is a lot that a Start up can teach large corporation about effective organization design that harnesses the organization’s energy. Here’s top five

1. Design for growth, not just revenue:

There is value in maximizing productivity and reengineering processes. But we are coming to the end of runway on these concepts. Traditionally, design criteria for an organization begin with budgetary constraints, resource availability, quarterly earning, margins. The result can only be an organization that is merely tweaked from the current version. Instead, start with “What if anything was possible?” Successful startups have learnt that growth is about possibilities and developing an approach to monetize that possibility. Revenue-orientation can only add constraints. Choose your starting point carefully and do not expect the conversations to be neat and clean. Seek opportunities, not perfection.

2. OD need not be big bang, make it a continuous process:

In a perfect world, you will have a finite amount of time to complete the design, plan for implementation and start deploying the new design. That rarely happens. A key organizational capability is being comfortable with iterations. A good design is never right the first time. Get used to change. As the organization grows and you gain wisdom, structures will evolve and processes will be optimized. It’s a continuous process and the sooner you get used to it, the better for business.

3. Carve roles to maximize impact:

The established route from organizational structure to role definition to people identification has been turned on its head by successful start-ups. Jeff Bezos has a “two pizza rule” for Amazon. Two pizzas should feed all people on a team. No more. There is value in small teams. They achieve more. Instead of carving roles under a function to perform a set of tasks, start by evaluating the competence and passion of your employee and carve a role for her. IDEO has designated helpers who, in addition to their own day job, act as soundboard for an identified project team. Measure organizational impact of people, not just their performance.

4. It’s ok to have empty boxes on the org chart :

Once everyone has found a place for himself or herself on the org chart, add roles that show future opportunities. Think big and make space for what you don’t have today but will get eventually. Let the empty box be roles that are futuristic, you might have a Sales Manager today but will need a Sales director tomorrow. These boxes also show employee a growth path and can be a great motivation for someone to join your company.

5. Make culture key to the design:

In this increasingly networked environment, your organizational culture can become your brand. Zappos understood this and designed their entire organization around stated core values. The simplicity of their approach has resulted in immense gains and overall positive energy in the organization. Don’t let the culture just happen. Decide what character you want to build in your organization and create a plan to make it happen. Don’t let the Values, beliefs and mission statements just hang on the wall. Make them the core of your business strategy and design your people management processes (especially rewards) around them.

With the organization’s ability-to-innovate becoming the key differentiator in business, organizational designers are looking for models that can be fluid yet effective. Successful start-ups that have continued to sustain their initial energy and passion to achieve are a fertile ground to learn from.

5 things to learn about Organization Design from Start-ups

1. Design for growth, not just revenue:

2. OD need not be big bang, make it a continuous process:

3. Carve roles to maximize impact:

4. It’s ok to have empty boxes on the org chart :

5. Make culture key to the design:

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5 things to learn about Organization Design from Start-ups

1. Design for growth, not just revenue:

2. OD need not be big bang, make it a continuous process:

3. Carve roles to maximize impact:

4. It’s ok to have empty boxes on the org chart :

5. Make culture key to the design:

More Blogs

6 valuable Business Lessons the sitcom “F.R.I.E.N.D.S” taught us

6 entrepreneurship lessons from my 11-month old daughter!

6 valuable business lessons that my clients taught me