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The Problems at Coinbase

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 |2022-06-17T11:05:07-07:00June 17th, 2022|Articles|Comments Off on The Problems at Coinbase

Subkit Interview

Subkit did a nice interview of me this week under Go Solo. One piece of advice that I would share with new aspiring coaches, and that I didn’t mention in the article, is to have a process to take clients through. Meaning, don’t sell yourself. Sell your process. Of course, having a process doesn’t mean there is no flexibility in the client engagement. Every client is unique. But the process itself provides the architecture to deliver results for each client. Anyway, having a process to follow isn’t something that I fully appreciated when I launched my coaching practice twenty years ago. It’s one of those things where the value is only fully realized in hindsight and I would consider it essential. Hope this concept helps others in their own coaching journey.

By |2022-06-08T16:48:06-07:00June 8th, 2022|Articles|Comments Off on Subkit Interview

A New and Better SWOT Analysis

SWOT is a solid framework for strategic planning. The concept is pretty simple and has been around since the 1960s. The idea behind it is that, to achieve operational excellence and drive the right strategy, you should assess your organization’s internal Strengths and Weaknesses and its external Opportunities and Threats (SWOT).

I like the SWOT analysis framework a lot. However, if you’re like me, you may have found that the actual usable outputs from a SWOT analysis have not been as effective as you had hoped. The “data” ends up being bullet points. The “insights” don’t reveal the root cause. The process 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 SWOT analysis.

It’s time to solve these problems. It’s time for an evolution of the SWOT. What might this look like?

After working with several hundred companies around the world, I have developed two powerful tools that you can deploy immediately to take your SWOT Analysis to a whole new level.

I call them the Entropy Survey and the Top-Level OKRs Strategy Survey. Here’s a high-level summary of what you can achieve with them and how they relate to SWOT:

These two tools each complement the other. Using them provides three big advantages when compared to a traditional SWOT analysis:

  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 improvement against the right (and evolving) business strategy.

If you’d like to learn more, watch these two videos below. If you like this way of approaching a SWOT analysis, register and take both tools for a free test drive. You will experience how much more effective a SWOT analysis can be.

Assessing Internal Strengths and Weaknesses

Assessing External Opportunities and Threats

If you like this way of thinking about SWOT, register to test drive both tools for free here.

By |2022-05-12T20:48:44-07:00May 12th, 2022|Articles|Comments Off on A New and Better SWOT Analysis

The 5 Steps to Designing a New Structure

There are 5 steps to follow when designing and implementing a new organizational structure:
Step 1. Map Key Process Cycles
Step 2. Map Functions
Step 3. Clarify & Adopt Structure
Step 4. Place People
Step 5. Plan & Execute Roll Out

Learn more:
Test Drive PSIU Assessments
Buy the book How to Think About Hiring
Buy the book Designed to Scale
Buy the book Organizational Physics

By |2022-04-15T07:48:44-07:00April 15th, 2022|Articles|Comments Off on The 5 Steps to Designing a New Structure

Listen to Designed to Scale on Audible and iTunes

I’m happy to announce that my new book Designed to Scale is now available on Audible and iTunes.


Before you buy, I’d like you to know that this is a VERY hard book to listen to as audio only. There are core concepts and visual images that require reading and reflection. If you prefer audio books, make sure to download the Audiobook Images PDF that is included with the audiobook to guide your listening. I’ve also been recording short videos on key concepts from the book that you can find links to here

Cheers,

Lex

By |2022-04-13T08:42:27-07:00April 13th, 2022|Articles|Comments Off on Listen to Designed to Scale on Audible and iTunes

How to Stack Your Structure with the Best Talent

No structure is perfect. No new hire is perfect. There are always trade offs. Be more conscious of those trade-offs upfront so that you can make the best decisions possible and stack your new structure with the right talent.

Learn more:
Test Drive PSIU Assessments
Buy How to Think About Hiring at:
Buy Designed to Scale

By |2022-03-29T13:55:08-07:00March 29th, 2022|Articles|Comments Off on How to Stack Your Structure with the Best Talent

Introduction to the 4-quadrant Structure Map

This is an intro video to the Organizational Physics 4-quadrant Structure Map tool.
Download the Structure Map template.
Buy the book Designed to Scale on Amazon.

The Structure Map is a powerful thinking tool to deploy the 6 Rules of Structure and identify any current structural breakdowns occurring in your business, to design the right new scalable growth structure, and to have easier and more pointed structural conversations with your team.

By |2022-03-24T10:52:37-07:00March 24th, 2022|Articles|Comments Off on Introduction to the 4-quadrant Structure Map

The Right Structure for Your Business Stage

What is the right organizational structure for the current and emerging lifecycle stage of your core business and any business units? Using the Organizational Physics Strategy Map as a guide, this video shows that:

  • A Pilot It stage initiative requires very limited structure.
  • A Nail It stage initiative benefits from a functional structure.
  • A Scale It stage initiative requires an evolving structure (based on the functions defined in the Nail It stage).
  • A Milk It stage structure requires making a break or escape from the legacy structure.

Additional Resources Referenced in this Video:
Buy the book Organizational Physics (best book for understanding lifecycle strategy)
Take the Top-Level OKRs Strategy Survey
Buy the book Designed to Scale

By |2022-03-09T22:08:07-08:00March 8th, 2022|Articles|Comments Off on The Right Structure for Your Business Stage

Design Controls Behavior

Design controls behavior. If you want new business behaviors, change the the organizational structure The 6 Rules of Structure provide visibility into key underlying polarities at work within every business. A key idea is to not treat polarities as problems to be solved. Polarities (e.g., short-range vs. long-range, efficiency vs. effectiveness, control vs. autonomy) must be harnessed to create the right amount of tension in the business for sustained strategic execution.
Buy the book Designed to Scale on Amazon.

By |2022-03-06T10:04:27-08:00March 6th, 2022|Articles|Comments Off on Design Controls Behavior

The 6 Rules of Structure


There are 6 Rules of Structure to follow when designing a scalable business structure. They are:
1. If the strategy or lifecycle stage changes, change the structure.
2. Don’t allow short-range functions to control long-range ones.
3. Don’t allow efficiency functions to control effectiveness ones.
4. Don’t allow centralized control to overpower decentralized autonomy.
5. Put people into roles where they can focus and thrive.
6. Process brings structure alive.

Buy the Book Designed to Scale on Amazon.

By |2022-03-03T15:08:22-08:00March 3rd, 2022|Articles|Comments Off on The 6 Rules of Structure

Introducing the Top-Level OKRs Strategy Survey

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

By |2022-02-23T08:40:27-08:00February 23rd, 2022|Articles|Comments Off on Introducing the Top-Level OKRs Strategy Survey