Organizational Physics is a proven framework for designing and scaling your business. Founder Lex Sisney is one of the world’s foremost experts in organizational structure and design. He has personally helped to transform several hundreds of companies, in 16 countries, and in industries as diverse as software-as-a-service (SAAS), machine learning, manufacturing, energy, consumer goods, health care, biotech, payments, hospitality, import/export, distribution, field services, mobile, publishing, and more.
The results speak for themselves: within 7 to 9 months after implementing Organizational Physics, most clients show a sustained 65 to 75% improvement in internal operating performance (as measured by them) and simultaneously realize a 2X to 3X increase in sales over the next 1 to 3 years. In fact, a handful of well-positioned clients have grown 10X in that time-frame, achieving multi-billion-dollar valuations.
Here is a sampling of some real-world results:
- A $40M biotech start-up was struggling with management execution and coordinating across multiple geographies and product lines. The founder was a thought leader with a research background who definitely understood the technical side of his business. He was also a first-time CEO, however, and he was naturally overwhelmed with internal operational issues at scale, despite having a COO to support him. By better defining the next stage strategy and implementing a new organizational structure and design, this same CEO took the business to more than $100M in sales in under three years, with very lucrative margins. As of this writing, he has received two competing multi-billion ($B) buyout offers.
- A $150M publicly traded consumer goods company was attempting to seize a new market opportunity but found itself going up against much larger, well-funded competitors. It had to innovate new product offerings while bringing together a complicated supply chain and distribution model. Of course, it also had to maintain and improve GMP quality standards. Using Organizational Physics, the company redesigned its structure, accelerated its execution speed on the new opportunities, won several best-in-category awards, and grew to become the number 1 or 2 competitor in its categories. The company is now valued at more than $1B and they are expanding into new international markets from a very strong foundation.
- A five-year-old venture-backed start-up was growing fast and had reached 300 employees. But as it grew, its internal execution got more complex and things started to bog down. Inside the company, one part of the business was fighting against the other. There was also a lot of conflict between members of the founding team and new senior-level hires brought in to help the company scale. As a result, sales were flattening. By implementing Organizational Physics, this company created a new structure with clarified roles and responsibilities to support the expansion strategy. They also implemented an improved management execution process to bring the structure alive. The results? Internal infighting plummeted, velocity increased, and revenues were up 60% within 9 months.
- A $15M a year venture-backed start-up was struggling with focusing its strategy and attracting new senior leadership. Working with the CEO and leadership team, we put in place a quarterly 1-page strategic execution summary that clarified the strategy, accountabilities, 90-day-, 1-year-, and 3-year-priorities, and the core ideology. We also redesigned the organizational structure, put in place a new management process, and helped to recruit and integrate a VP of Sales and a VP of Operations. Three years later, the company more than tripled its revenues and is on track to hit $100M in sales.. At the same time, the company founder and CEO went from spending 10% of his time in his Genius ZoneTM to spending over 80% of his time in that zone.
- A 5-year-old company had been losing money since its inception. It had a strong culture but was suffering from customer turnover and too many competing priorities, with no way to manage them effectively. In three months we implemented a new go-to-market strategy, restructured the company for clearer accountability, and streamlined the decision-making and product development processes. The result? The company reached cash flow profitability for the first time and is on track to reach $50M in sales and 30% EBITDA the following year.
- A 9-year-old venture-backed software-as-a-service (SAAS) firm with $10.5M in sales was stalled in its expansion strategy. Sales were growing but not nearly fast enough. After six months of searching, the company was 0 for 3 on making critical key hires including a Director of Engineering, a COO, and a VP of Marketing. The board was getting impatient and making rumblings about replacing the founding team. The founders themselves were feeling ambivalent about the business. In three months, we realigned the founding team and helped them rediscover their original passion. We created a new environment for faster execution and uncovered the real market opportunity. The result? The company found and hired three new A+ executives and its momentum is accelerating. Its forecast is to more than double sales in the coming year.
- The regulatory market had changed radically on a $35M Inc. 500 Fastest Growing CompanyTM. Using the the Strategic Execution Coaching Program, we identified and executed on a new pivot strategy. While its two largest competitors went bankrupt, our client had their most successful quarter ever. In addition, the founder freed himself up significantly from his old role of managing daily operations to his new role of creating new marketing campaigns and developing new markets (two things that he loves to do and add the most enterprise value to the business).
- A $30M medical device manufacturer engaged Organizational Physics. The company was having a hard time making the leap from a founder-led organization to a well-coordinated execution machine with multiple global offices. One year later, with the founder operating still as CEO but now much more in his Genius Zone and with the a structure and management process to support it, the company doubled in size to $60M. At the same time, it increased its operating profit margin and management capacity. Soon after, it received a $240M+ buyout offer, scoring a very high return for its shareholders.
- A 20-year old software company had gone through a very challenging period and sales were flat. Its legacy product quality had suffered as a result. At the same time, the market was changing and it had to innovate to capture a closing market window. We clarified the strategy, put in place a new structure and management process, and built a new product management system. Within nine months, the company had transformed its product quality on its legacy product to meet client expectations. Simultaneously, the company scoped and launched a new innovative product that sets it up for success for the next generation. Revenues were up 18% within 12 months. More importantly, the culture has pride and is excited for the future.
But Wait… What About the Projects That Didn’t Work?
If most clients achieved substantial results like these by using Organizational Physics, what about the few who didn’t? Good question!
First, I want to thank the clients that didn’t have great results because it is from them that I learned the most. Second, there’s two types of scenarios where the client’s internal environment didn’t allow for a change to occur: international tribes and low-margin service businesses.
By “international tribes” I mean companies that were created by merging or bringing together multiple factions from different geographic and ethnic regions from around the world. These were companies in name only and each fiefdom, formed from national or regional identities, hadn’t yet came together around a common set of vision and values. I showed up prepared to work on strategy and structure but I should have shown up with a team of United Nations conflict negotiators. Good lesson.
And in terms of low-margin services businesses, well, there’s a reason that most VCs will tell you that “services suck.” It’s very hard to make a sustainable change in an organization when fee-for-service clients dictate the priorities. There’s not enough margin to invest in non-billable people and resources to help make the shift to a more proactive business model. It’s just hard.
So outside of those extreme examples I’ve found that the principles and processes embodied by Organizational Physics will drive transformative results for most types of companies.
