The three design elements of organizational structure are: Functions, Location, and Authority. Use these three building blocks to avoid some common pitfalls and design the right new structure for your business stage and strategy.
Buy the book Designed to Scale: How to Structure Your Business for Exponential Growth.
Structure is how your business is organized. If you want to get your business to do something new, then at key points in its development, you’ll need to look at and change its structure.
Buy the book Designed to Scale.
I’ve recently made available a powerful new tool for setting strategy. It’s called the Top-Level OKRs Strategy Survey. It relies on lifecycle theory to help you quickly align a Leadership Team on the right top-level objectives and key results (OKRs).
If you are planning to do a strategy refresh, I highly recommend this approach. I suggest that you launch this tool 3 to 4 weeks prior to your strategic planning offsite and use the data as inputs for setting the right strategy. You can find out everything you need to know here.
Take the tool for a free 30-day test drive and let me know how it is working out for you. I guarantee it will help you set the right next-stage strategy, one based on the actual lifecycle stage of each business unit. It will also create improved strategic clarity, alignment, and buy-in across your entire company.
To your success,
Lex
I greatly appreciate your helpful Amazon book reviews if you deem this work worthy.
Thanks again and stay in touch.
Cheers,
Lex
Imagine if you could listen to a recording from last year of you and your co-founder discussing the state of your business and your plans for the coming year. What would the conversation have sounded like a year ago? What were you thinking then? What were your blind spots that you recognize now? And how would it compare to a recording from this year?
The reason I’m asking is that this recent episode of the Fort with Chris Powers does just that. Chris and his business partner Jaxon Baxter conduct a real-time year-in-review live. It’s really rare to capture something like this and it is worth listening to.
I collaborated with Chris and Jason last year to deploy Organizational Physics in their real estate management company, Fort Capital. For Capital is scaling like gangbusters and Chris and Jason are two of the most savvy and values-driven entrepreneurs you’ll meet. Their no-holds-barred conversation is a great real-world example of the power of:
I didn’t know that Chris and Jason were going to discuss Organizational Physics and it was fun and humbling for me to hear them speak about their experience and new perspectives in their own words. […]
There have been a lot of exciting developments in private space travel this month. Elon Musk, Jeff Bezos, and Richard Branson, through their respective companies, are all making consistent and visible progress towards developing space-based private enterprise. I’m sure that much of the social media world is rolling their eyes at “billionaires and their toys,” but regardless, it is amazing to witness what humans can accomplish over time when they have the commitment, vision, and resources to make it possible. Blue Origin’s motto, Gradatim Ferociter, meaning “step by step ferociously,” captures the spirit very well.
The picture above captures the spirit of progressive innovation. The image on the left is the Wright Brother’s flight at Kitty Hawk. The image on the right is Neil Armstrong’s moon walk. Without looking up the dates, if you had to guess, how much time would you say it took humanity to go from the first “airplane” flight to putting a man on the moon and returning him safely to earth?
….
Just 66 years! Totally bonkers, right? It leaves me wondering what the next 66 years will hold for humanity. In some areas we’ve made mind-boggling innovations and progress and in other areas, we seem stuck in the dark ages.
So my question to you, as a visionary entrepreneur yourself, is this: What’s your rocket? What’s the vision of your company and how will its success help to up-level the whole? And critically—because vision without execution is just a dream—are you currently organized to ensure that your business accomplishes its mission and without compromising its core values? And even more critically, as the leader, how are you thinking about the organizational design challenge as your company scales up?
To get a sense for what I mean, and how to think […]
Does operational excellence matter to you?
If so, then I’d like to introduce you to a powerful new tool called the Organizational Physics Entropy Survey. The Entropy Survey allows you to survey a cross-functional team to discover a company’s most important internal improvement points and create an action plan to fix them. Then you can track the team’s progress at driving and sustaining operational excellence over time.
For over a decade, I have relied on this same tool as a linchpin in my strategic alignment and organizational design consulting practice. I have used it with several hundred companies. I know it can be transformative for two reasons:
It’s a powerful tool and is like nothing else out there. I’m just now making the Entropy Survey available to other coaches and CEOs who would also value the improved ability to:
“The Entropy Survey is a revolutionary change. Not simply an incremental move, but a massive transformative change over the traditional SWOT Analysis.”
– Paul Cronin, Managing Director, Cornerstone3 Inc.
If you’re potentially interested in a powerful approach to organizational development like the one I’m describing, then I’d like to invite you to register for free, kick the tires, and see how it works. If you give it a sincere try, then you’ll quickly understand why it […]
Part I: I had the privilege of being on the Fort Podcast with Chris Powers. Chris is an excellent interviewer and we covered a lot of ground including scaling-up, organizational design, and where a leader can create the most leverage to get and sustain business momentum.
Listen on: Spotify | Apple | YouTube
Part II: Listen in as former client Chris Powers, host of the Fort with Chris Powers, interviews his business partner Jason Baxter as they do a real-time 2021 Year in Review at Fort Capital. I didn’t know that Chris and Jason were going to discuss the impact Organizational Physics had made on their already successful business. It was fun and humbling for me to hear them speak about their experience and new perspectives in their own words. I hope you’ll enjoy it too.
Listen on: Spotify | Apple | Youtube
Part III: This is the Fort Podcast Year End Review for 2022. It is important to notice that the design, mindset, and language of Organizational Physics are still present, but the founders are now focused on scaling their business, not operating Organizational Physics! By design, Organizational Physics principles have faded into the background, and the founders and their company are having a ton of fun growing their business in the right way. Our collaboration in 2020 was short-lived, but its […]
Photo by Miguel Á. Padriñán at Pexels.
Does your business need an anti-chaos officer? And what in the heck is an anti-chaos officer anyway? I’m referring to a senior leadership role that is dedicated to reducing the internal friction, noise, and chaos that naturally emerges across and between functions and whose mission is to enable the entire business to execute faster and smarter as a whole.
This role goes by many different names and interpretations and is usually splintered across multiple organizational functions. As a consequence, even though it can deliver tremendous value and leverage, it is still widely misunderstood. Additionally, the need for it is unrecognized in most businesses today. I am dedicating this article to clear up these misconceptions and to help you design and implement this very impactful position in your business. You’ll be very glad that you did. Let’s get to it.
Half the battle of understanding this role is defining it. Seriously. It is usually fragmented across the organization and comes in many different flavors and job titles. In my organizational structure work, I usually call this the Business Alignment Office. But this term hasn’t really helped me to make this position easier to communicate and teach. I recently heard a recruiter tell one of my clients, “Oh, it’s like an Anti-Chaos Officer!” and I laughed at the clever angle, which is what inspired me to write this article. Sometimes this role gets conflated with a Program Management Office or even a Project Management Office but it is more than these. Obviously, a role like a Chief Operating Officer or an equivalent has elements of bringing order, stability and throughput to the organization, but that isn’t the role I’m describing either.
So what […]
Photo by Markus Spiske from Pexels.
We’ve all been encouraged to delegate more. We’ve also all had the experience of delegating in the past only to have things turn into a total fricking disaster. Most management writing is on how to delegate better. I want to explain when, why, and how you should NOT delegate at all and how to better educate your team about why you’ve made those delegation decisions.
What inspired this article is a CEO friend of mine who recently completed a 360 degree performance review between herself and her leadership team. Can you take a guess at what most of the ‘things to improve’ feedback was? You got it. “Needs to do a better job of delegating.” “Tries to do too much herself.” “Gets too involved in the details sometimes.” I see the same scenario often with my clients.
Some of the feedback my friend received was valid. But some of it was not because, in this instance, she doesn’t fully trust in the abilities of the subordinates who were giving the feedback. She’s not wrong. How can you delegate a mission-critical project to someone whose capabilities you don’t fully trust?
There’s a mental model I like called the Conviction-Consequence matrix that helps to clarify to yourself and to others what projects you’re delegating and which ones you’re not and why. I picked up the outline for this model in the book Super Thinking, where the authors originally attribute the model to venture capitalist Keith Rabois. I’ve put my own spin on it:
Do It Yourself are those projects or situations that you have high conviction over and that also have very high consequences, positive […]
Photo by bruce mars from Pexels
Casper the online mattress company – sorry, eh, I meant to say “the sleep transformation company” – recently announced its IPO. From the S-1:
As the wellness equation increasingly evolves to include sleep, the business of sleep is growing and evolving into what we call the Sleep Economy. We are helping to accelerate this transformation. Our mission is to awaken the potential of a well-rested world, and we want Casper to become the top-of-mind brand for best-in-class products and experiences that improve how we sleep…
We believe great brands win over the long-term and have the ability to change the culture around them. We have endeavored to build a brand that is genuine, trustworthy, and approachable, as well as fun and playful. Through our investment in a sophisticated and integrated marketing strategy, we engage consumers across the entire consumer journey, from our iconic public transit advertising campaigns, to our “Napmobiles” and experiential retail store concepts, to our category-leading social media presence. We see the Casper brand as an immeasurably valuable asset that we are utilizing to help capture a large share of the Sleep Economy.
When you read this, does it make you want to go online and buy one of their mattresses? Me neither.
Does it make you roll your eyes a bit? Yep, me too.
But does it do what the message is targeted to achieve – to speak to the financial community and gather interest and excitement for the upcoming IPO? I don’t think it does.
In fact, I think this message creates more harm than good because the brand is speaking with two voices. One to its consumers through its “brand focus” and one to its investors through its “investor focus.”
Great brands […]
Photo by Mike from Pexels
When I’m building a new organizational structure with a leadership team, someone usually makes this observation: “In this new structure, who actually owns the customer?” Before responding, I first try to get a shared definition so I’ll ask them to clarify: “Great question. What do you mean specifically by ‘own the customer’?”
They tend to hem and haw before replying something like, “You know, own the customer… a single point in the organization that knows everything about the customer, that is accountable for the overall customer experience, makes product decisions, and that champions the customers needs.” They might then share with me that in their old structure, this role was held by the VP of Product or Marketing or Customer Success. “In this new structure,” they’ll add, “it’s unclear who owns the customer.”
OK, now we’re getting somewhere. Here’s the answer:
In a well-designed organization, no single role should “own” the customer. Instead, the entire structure must be designed to acquire and serve the right customers now and over time. Every role in the structure has a part to play in accomplishing that mission.
Put another way, there are some key steps in the customer journey: from acquisition to on-boarding, to engagement, to support, to the design and maintenance of the products and services customers use, and so on. Each of these distinct steps in the customer journey actually requires a different mindset, skill set, and focus. If the structure were designed so that one role is accountable for all aspects of the customer journey, some very predictable problems will emerge because the organization is attempting to consolidate too many conflicting and competing needs under one role.
What kinds of problems? They exist on a spectrum in relation to […]
As a manager, have you found yourself asking an employee or team to do something differently and, despite your best attempts at getting through to them, their old behaviors remain? Does this not make you want to pull your hair out in frustration and consider a new career in bocce ball?
If you’ve answered even a half yes, you’re obviously not alone.
Often things go like this. You communicate to an employee or a team that something needs to change. You make sure to look for signs of shared understanding and commitment back from them: “Does what I’m saying make sense to you?” or “Can you repeat what I said back to me so I know that I was clear?” In that moment, they seem to get it. But when you follow up a few weeks later, you’re dismayed to find out that their old behaviors remain are stuck in place.
This scenario is as frustrating as it is common. The good news is there are approaches that can help you get the results you want with much less effort. I’m going to share a great one here that I learned recently from a wise mentor and coach.
The next time you find yourself in a similar situation, you can try this approach instead. Begin first by communicating what they need to STOP doing, then communicate what they need to START doing, and then paint a picture to define in unarguable terms what the IDEAL would look like.
If you can follow this sequence of STOP-START-IDEAL, your chances of initiating change and seeing new and positive behaviors is much greater. Why? Because each of us has finite energy in time. If you don’t first call out what existing behaviors or mindsets need to STOP, that person won’t […]
Lex conducting an Organizational Structure & Design Workshop in Capetown, South Africa. Photo Credit: Gregor Röhrig
Changing your organizational structure sucks.
There. I said it.
Helping companies change their structure is the work I do every day. If I didn’t know what I know now, I’d wonder, “Why would anyone want to do it?”
Changing your company’s structure can be a massive initiative. If you don’t do it correctly, it’s a recipe for disruption and disaster. People’s careers are on the line. Job titles can change. Existing reporting lines can get disrupted. One leader’s turf can expand and another’s shrink. The political fallout can be a huge cost in itself.
Even worse, if the new structure is done wrong, you’ll have the classic case of the cure killing the patient. You can set your company back even further in its development.
The corollary is also true. Structure done right can be the breakthrough you’ve been looking for. It’s like activating the booster stage of a rocket. It’s the catalyst to the next level of performance. I know because I’ve seen it happen over and over. It’s the reason why I do the work I do. It’s also one of the most misunderstood aspects of organizational design.
Let me explain all this by starting with a recent example at Microsoft.
In the early 2000s, a few years after taking over as CEO from co-founder Bill Gates, Steve Ballmer decided to double down on the existing divisional structure at Microsoft. A divisional structure typically has strong divisional heads but poor or limited cross-functional coordination across the divisions. […]
If I were to ask you — “How are you instilling a culture of speed, accountability, and teamwork as your organization scales up?” — how would you respond?
This is a critical question. On the one hand, you want to keep what works well from your early start-up culture — fast decision making, risk-taking, camaraderie, and innovation. On the other, you have to manage the growing complexity — more people, new product lines, multiple business units, increasing regulatory requirements, and more. How can you achieve both?
Most entrepreneurs and CEOs struggle with this. They know that as their business scales up, they must evolve how the business operates, makes decisions, and cascades its culture. They also rightly fear that more policies, centralization, and procedures could cause the company to bog down and lose its entrepreneurial edge. The status quo is no longer tenable. You need a cure but the cure shouldn’t also kill the patient. What to do?
If we were to ask Jeff Bezos the same question — How do you instill a culture of speed, accountability, and teamwork at Amazon?” — he’d say something like this:
“Amazon’s management philosophy is to be customer obsessed, treat every day as if it were Day 1, manage the two major types of decisions (Type 1 and Type 2) differently, reinforce that it’s better to disagree and commit than get stuck in information paralysis, and elevate true misalignment issues quickly.”
What Bezos has figured out, and what he’s consistently trying […]
