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Why You Should Not Have a President and COO

Photo credit: AudienceView. Photo credit: AudienceView.

It’s a classic tale. Your company’s driven, visionary founder manages to lead your start up to takeoff and hit rapid growth mode. But then something happens, and everything starts to bog down. Those former start up struggles and early wins turn into a whole new set of challenges: running the business at scale.

At about this time in an organization’s lifecycle, conversations in the board room and around the water cooler start to focus on the founder. See if you’ve said or heard any of these before:

  • Our founder has great energy and ideas (along with some really dumb ideas) but we still can’t seem to get our act together.
  • It’s no secret our founder isn’t an Operations person.
  • We need to either replace our founder or support her with someone experienced who can run day-to-day operations and keep the trains on time.
  • What we need is a President/COO. Then the founder/CEO can be Mr. Outside and the President/COO can be Mr. Inside.

Does any of that sound familiar? I bet it does. On the surface, having a President/COO can make a lot of sense. Every organization needs stability, structure, and experience if it is going to scale up. The approach is certainly popular. “President and COO” titles are so common—throw a stapler in the air at your local office park and you’re bound to hit one on the head.

But hiring a President/COO to solve the “founder” problem typically brings just a new set of problems, setbacks, and even disasters. In many cases I’ve seen, the new President/COO was a sure bet on paper but failed to replicate past successes in a new environment.

In another common scenario, you’ll find that soon after joining, the new President/COO will get into conflict with the founder/CEO about who really runs the business. When this happens, the culture quickly erodes into “old guard” vs. “new guard” and execution speed bogs down across the board from all the in-fighting and politics.

There’s also a little appreciated but equally severe problem that happens when the founder leaves the business too soon, now that “the professionals are in charge” or because “it’s just not that much fun around here anymore,” and the company fails to capitalize on its true potential over time.

While hiring and integrating capable senior leaders into the organization is needed and necessary to scale your business (I’ll show you how to do this here), the popular approach of having a President/COO to oversee business execution usually turns out to be a fix that is much worse than the original problem.

I’ve coached many founder-led, high-growth companies to increasing revenues and profits without a traditional President/COO and without mistakenly consolidating business functions together. I can say with confidence that there is a better way to build great leadership to […]

By |2023-02-09T08:27:19-08:00February 18th, 2015|Articles|Comments Off on Why You Should Not Have a President and COO

The Strategic Alignment Guide for Modern MBA

The Strategic Alignment Guide for Modern MBA

Welcome Modern MBA viewers.

Strategic alignment is the act of identifying and aligning a company’s unique and valuable capabilities with growing market opportunities. With the help of this guide and its associated SWOT analysis tools, your company can accomplish the equivalent of two to three months’ worth of strategic planning and alignment in just two days.

How to Achieve Strategic Alignment

To achieve strategic alignment, the CEO and Leadership Team work together to identify the right three-year Top-Level Strategic Imperatives and short-term key results needed to achieve them. This top-level strategy must then be cascaded into the rest of the organization so that it can be implemented rapidly.

For superior strategic alignment, this process should be conducted during an offsite strategic planning session, which lasts up to two days. Before this workshop, a new form of SWOT analysis is performed via team surveys, and participants become familiar with a framework and language for discussing strategy.

During the workshop, the results of the team surveys are used to generate shared insights and alignment on: (1) areas of improvement in the company; (2) the company’s lifecycle stage; (3) the company’s strategic execution risks; and (4) the go-forward strategic priorities.

At the end of this strategic alignment process, you will have generated a clear, concrete, and actionable roadmap for strategic execution that can be communicated to the entire company.

How to Conduct an Improved SWOT Analysis

A key part of an effective strategic alignment process is to build shared consciousness around the company’s current strengths, weaknesses, opportunities, and threats (SWOT Analysis). However, if you have run a SWOT analysis before, you may have found that the outputs were not as useful as you would have liked. The “data” ends up being bullet points. The “insights” don’t reveal the root cause. The process itself generates a lot of opinions but it can feel harder than it should be to align the team on concrete action steps based on a traditional SWOT analysis alone.

Organizational Physics has solved these shortcommings of a traditional SWOT analysis with a new, two-step SWOT analysis. The Entropy Survey is the first step which provides a root cause analysis of a company’s internal strengths and weaknesses. A company’s external opportunities and threats are then determined using the Top-level OKRs Strategy Survey.

By combining these two tools, you can produce an extremely useful SWOT analysis in a fraction of the time and with far greater insights than a traditional SWOT analysis. Some additional advantages of this new form of SWOT analysis include:

  1.  It allows for better and faster data gathering.
  2.  It provides powerful mental models for your team to visualize its strengths, weaknesses, opportunities, and threats.
  3.  It identifies the root cause of problems so that you and your team […]
By |2023-09-28T08:07:14-07:00September 27th, 2023|Comments Off on The Strategic Alignment Guide for Modern MBA

New SWOT Analysis & Strategic Alignment Workshop Guide

New SWOT Analysis & Strategic Alignment Workshop Guide

Strategic alignment is the act of identifying and aligning a company’s unique and valuable capabilities with growing market opportunities. With the help of this guide and its associated SWOT analysis tools, your company can accomplish the equivalent of two to three months’ worth of strategic planning and alignment in just two days.

How to Achieve Strategic Alignment

To achieve strategic alignment, the CEO and Leadership Team work together to identify the right three-year Top-Level Strategic Imperatives and short-term key results needed to achieve them. This top-level strategy must then be cascaded into the rest of the organization so that it can be implemented rapidly.

For superior strategic alignment, this process should be conducted during an offsite strategic planning session, which lasts up to two days. Before this workshop, a new form of SWOT analysis is performed via team surveys, and participants become familiar with a framework and language for discussing strategy.

During the workshop, the results of the team surveys are used to generate shared insights and alignment on: (1) areas of improvement in the company; (2) the company’s lifecycle stage; (3) the company’s strategic execution risks; and (4) the go-forward strategic priorities.

At the end of this strategic alignment process, you will have generated a clear, concrete, and actionable roadmap for strategic execution that can be communicated to the entire company.

How to Conduct an Improved SWOT Analysis

A key part of an effective strategic alignment process is to build shared consciousness around the company’s current strengths, weaknesses, opportunities, and threats (SWOT Analysis). However, if you have run a SWOT analysis before, you may have found that the outputs were not as useful as you would have liked. The “data” ends up being bullet points. The “insights” don’t reveal the root cause. The process itself generates a lot of opinions but it can feel harder than it should be to align the team on concrete action steps based on a traditional SWOT analysis alone.

Organizational Physics has solved these shortcommings of a traditional SWOT analysis with a new, two-step SWOT analysis. The Entropy Survey is the first step which provides a root cause analysis of a company’s internal strengths and weaknesses. A company’s external opportunities and threats are then determined using the Top-level OKRs Strategy Survey.

By combining these two tools, you can produce an extremely useful SWOT analysis in a fraction of the time and with far greater insights than a traditional SWOT analysis. Some additional advantages of this new form of SWOT analysis include:

  1.  It allows for better and faster data gathering.
  2.  It provides powerful mental models for your team to visualize its strengths, weaknesses, opportunities, and threats.
  3.  It identifies the root cause of problems so that you and your team can drive continuous […]
By |2024-01-23T05:15:27-08:00September 21st, 2023|Comments Off on New SWOT Analysis & Strategic Alignment Workshop Guide

Designed to Scale Coaching Program

Designed to Scale Coaching Program: Accelerating Leadership and Business Growth

Being the CEO of fast growing company can be exhilarating one week and frustrating the next. I know because I’ve been there. That’s why I created the Designed to Scale Coaching Program, a proven method for building and managing high-growth companies that delivers breakthrough results.

Our clients are expansion-stage businesses (typically $30M+ in annual sales with a leadership team of 7+) that have an opportunity to grow significantly. Our guarantee is that when you deploy this program, your organization will not only scale — it will also have improved coordination, execution speed, and a more aligned culture. What’s more, you’ll experience greater time freedom, clarity, and confidence in your role as CEO.

If you’re thinking about how to take your organization to the next level and wondering if our approach is right for you, start with this 5-minute video or read on to learn more below. When ready, you can apply schedule a consultation.

The Quickest Way to Scale Your Business

In a picture, this coaching program guides you, step by step, to play to your strengths and passions while simultaneously leading your company from the mid to late Nail It stage of business development into the early to full Scale It stage of business development, as shown in the picture below.

The Designed to Scale Coaching Program guides you, step by step, to play to your strengths and passions while simultaneously leading your company from the Nail It stage of business development to the Scale It stage of business development and beyond. The Designed to Scale Coaching Program guides you, step by step, to play to your strengths and passions while simultaneously leading your company from the Nail It stage of business development to the Scale It stage of business development and beyond.

Here’s another picture and an alternative way to look at it. Our job is to help you to drive your business up the lifecycle stages into a zone of growing revenues and profits (the dotted oval below). Then, from this position of strength, structure and prioritize the launch and development of new business units that will in turn go through their own lifecycle stages for sustained, profitable performance over time, like this:

How to create sustained, profitable performance. How to create sustained profitable performance.

Is the Designed to Scale Coaching Program Right for You?

You’re an ideal client for this coaching program if you’re the CEO of an expansion-stage company that already has established product-market fit on your core product. It is also common that you are experiencing friction with A) launching and growing a new product or business line; B) expanding […]

By |2024-02-13T05:44:50-08:00December 14th, 2022|Comments Off on Designed to Scale Coaching Program

The Cultural Problems at Coinbase Aren’t Cultural

I found the recent employee petition to fire senior leaders at Coinbase—including the President & COO, Chief Product Officer, and Chief People Officer—quite fascinating. If you haven’t seen it yet, it’s worth a quick read. There’s a hidden reason these three roles are being targeted besides their seniority.

To summarize the petition, as the crypto market has collapsed, some members of the employee base are pointing fingers at leadership and calling for the ousting of the President & COO, Chief Product Officer, and Chief People Officer as the primary culprits for the company’s issues. I am sure that there are long-held grievances behind this petition that are only now coming to light because of the stress and fracturing caused by the crypto market collapse.

Certainly, a big part of Coinbase’s problems is that they prematurely scaled and over-hired. They are now laying off 18% of their workforce and that may not be the end of it. Coinbase isn’t the first hyper-growth company to make the mistake of presupposing sustained market demand, and it won’t be the last one either. But what remains unrecognized is that Coinbase actually has some some classic flaws in its organizational structure that are contributing to its breakdowns.

The employees don’t recognize these structural flaws—only the symptoms—so they are pointing fingers at these leaders to get them ousted. CEO Brian Armstrong doesn’t recognize these flaws either, so he is pointing fingers right back at the employees to “grow up or get out.” The irony is that, if these structural flaws remain, the leaders may change but the underlying issues at Coinbase will remain.

None of these structural issues that I’m going to point out are very apparent during the good times. In fact, many of Coinbase’s structural choices seem perfectly rational and normal. But when there’s a serious crisis, like a collapse in the crypto market, the harms of having a flawed structure become impossible to hide. Warren Buffet said it perfectly: “When the tide goes out, it’s easy to see who has been skinny dipping.”

So what are these organizational design flaws at Coinbase? You can see them described in the employee petition which is targeting the ouster of the President & COO, the Chief Product Officer, and the Chief People Officer. To be fair, I don’t have insider knowledge on the Coinbase org structure so I’m making some assumptions based on a very limited data set. But if we just go by titles alone, these are the structural flaws that are contributing to its chaotic performance and angry employee base.

1. Queen of England. CEO Brian Armstrong put himself into a classic Queen of England structure by adding a President & COO beneath him to oversee multiple major areas. The intent of the Queen of England structure is […]

By |2022-12-14T03:27:44-08:00June 17th, 2022|Articles|Comments Off on The Cultural Problems at Coinbase Aren’t Cultural

The Rocket


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 about this challenge, I’d like you to imagine that you are in the shoes (spaceboots?) of an Elon Musk, Jeff Bezos, or Richard Branson and you are attempting to launch and scale a space-based company. Now, this analogy may seem very far removed from your own business today, but just humor me. The challenges faced by every expansion-stage entrepreneur are fundamentally the same, regardless of the vision or business model. And the mindset used to solve these challenges successfully is also the same.

Launch Day

It’s launch day. Out on the tarmac the rocket sits, gleaming in the morning sun, pointed towards the heavens, with its payload ready to blast into orbit. As the founder and CEO of Rockets R Us, you’ve got a lot riding on this. It’s your company’s inaugural commercial launch and you await the event with nervous anticipation. As the countdown clock commences, you can’t help but reflect on what it took to reach this point. The launch coordinator announces over your headset, […]

By |2021-07-13T19:19:53-07:00July 13th, 2021|Articles|Comments Off on The Rocket

Does Your Business Need an Anti-Chaos Officer?

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.

What is this Anti-Chaos Officer Role Exactly?

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 is it? This is an organizational linchpin role that drives the coordination, management, and execution of all major cross-functional processes, projects, and initiatives. Its purpose is to identify, plan, coordinate, and communicate those high-impact, cross-functional problems and initiatives that improve metrics and decision-making, accelerate throughput, improve quality, and enable scalability of the entire organization. Its #1 mandate is to seek out cross-functional entropy and — by working together with other impacted functions — bring forth shared insights, speed, quality, and performance. Then find the next cross-functional opportunity and repeat.

When I was the CEO of Commission Junction, I blindly stumbled into this role and quickly realized the positive impact it can have. At the time, I was fortunate to have on staff a very smart and talented individual named Wade Crang. Wade had an MBA and an advanced math degree and had worked for several years has a consultant at a Big 5 consulting firm. I remember hiring him even though we didn’t really have a well-defined role for him to perform at the […]

By |2021-05-18T01:35:11-07:00December 6th, 2020|Articles|Comments Off on Does Your Business Need an Anti-Chaos Officer?

The Top 10 Signs It’s Time To Change Your Organizational Structure

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. Ballmer’s approach led to this infamous visual about working at Microsoft in the 2000s (I’m not sure who the source is but I still find it funny):


If your business has the wrong structure for its business model, strategy, or lifecycle stage, it’s not going to scale up. It’s going to trip up.

What was the problem with this approach? It was the wrong structure for a changed reality. The existing divisional structure worked well for Microsoft in the 80s and 90s during the desktop/data-center era. But the structure itself also made Microsoft incapable of adjusting to a radically changing, Internet-first era. Ballmer tried to rectify this problem by changing strategies several times but he never changed structures until 2013 (and then only haphazardly or half-heartedly). It was too little, too late. Under his tenure, Microsoft lost half of its enterprise value. Not a good score.

Within a short time after […]

By |2021-05-18T08:58:13-07:00February 26th, 2019|Articles|Comments Off on The Top 10 Signs It’s Time To Change Your Organizational Structure

The 3 Agreements for Type-1 vs Type-2 Decisions


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 to communicate and reinforce, is that to be effective at scale means to build on principles, not on policies. Policies, procedures, and rules may be necessary to some extent (especially if you are in a highly regulated industry) but they do not create high performance. As you know, they often prevent high performance.

Principles, on the other hand, are designed to be few in number but strong in impact. Meaning, a principle points you in the right direction but calls on the common sense and creativity of the individuals executing it. Also, if a principle is violated, this must carry big consequences. It has to, or it has no weight; it’s just a platitude.

If you’re like me and you tend to resonate with the principles-over-policies approach to scaling a business, but you’ve also been wondering how to bring this home for your leadership team and staff, I want to share with you a one-page document I use with success in my coaching practice. This one-pager […]

By |2021-09-17T08:32:06-07:00January 27th, 2018|Articles|Comments Off on The 3 Agreements for Type-1 vs Type-2 Decisions

When Co-founders Fight — And What To Do About It

why cofounders fight
Being business partners is a lot like being married. When the relationship is thriving, it’s awesome. But when it isn’t, it really sucks. In fact, few things can destroy organizational momentum like two co-founders in a bad relationship. I have a friend in a successful business partnership who puts it like this, “I have two wives. One at home and one at work. I’ve got to invest time and energy to make sure that both stay happy, otherwise, it all goes to s#*&t!”

Not all partner conflict is bad. You actually want constructive conflict in your partnership. Constructive conflict means that you and your partner share the same vision and values; there’s give-and-take; you fiercely debate potential decisions but without attacking each other’s character; there’s a sense of mutual trust and respect; and your individual strengths and styles complement each other. You are both better because of the other.

Destructive conflict, on the other hand, is like a toxic marriage. It eats away at the system from the inside and doesn’t work for anybody. Just as divorcing adults impacts their kids, two co-founders in a toxic relationship impact everyone else in the organization.

If you’re navigating a bad business partnership, or you just want to make sure that your current great partnership remains so, then it can be eye-opening to understand that any destructive partnership conflict falls into just three types. Once you know what type of conflict you’re dealing with, then you can know how to address it.

As you read about each category of destructive conflict below, see if you can recognize where your partnership is experiencing the most strain today. That will tell you where to focus your energy and attention to help the partnership be great again, if that’s possible, or to walk away if it isn’t.

Category 1: Conflict of Vision and Values

I’m just going to come right out and say it. If you are having a true conflict of vision and values between you and your business partner, you only have one option: get a divorce. In this case a “divorce” means that one partner needs to effectively buy the other out or, if not, to shut the business down and go your separate ways.

Why? Because nothing is more destructive to organizational momentum and potential than a conflict of vision and values. Vision is the destination or ultimate outcome you want the business to reach. Values are expressed in the behavior you deem desirable and acceptable during the journey. If the co-founders no longer want to end up in the same location or don’t abide by the same core values, how can they possibly work effectively together? They simply can’t.

As an example, imagine a married couple in counseling. One partner desires to live in […]

By |2021-05-18T01:55:56-07:00June 3rd, 2014|Articles|Comments Off on When Co-founders Fight — And What To Do About It
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