When your "company" is two friends in a co-working space, organizational design amounts to who is buying the next round of coffee.
But your baby has grown.
It's great that you've been successful enough to grow from a kernel into a crowd, but how do you organize all these fresh faces so you can make decisions and get things done while remaining agile and innovative?
That's the question tackled by Joaquin Roca, a consultant who advises start-ups in New York, in a thought-provoking recent blog post. In it, Roca breaks down organizational design using a two-by-two matrix delineating whether an organization has formal or informal architecture (think org charts) and processes (standard operating procedure or how stuff actually gets done day to day).
It's well worth a read in full, but Roca's essential point is to suggest that start-ups that have outgrown a flat, sandbox-like lack organization, resist the pull of prematurely setting up a formal hierarchy, and focus on regularizing day-to-day processes instead. In his matrix he calls this the 'Fractal' mode of organization design:
As [start-ups] grow and feel the need for more structure, they often formalize their architecture instead of clarifying their process… While their need is greater clarity with regards to decision making, role authority, and responsibilities, they create titles and reporting structures in the hope that architecture will clarify process. This is a mistake and leads to prematurely hierarchical organizations.
An alternative is to do what we did at SumAll…. move toward the fractal: clarify processes while keeping the architecture lightweight. You can achieve this by clearly delineating individual authority, roles, and responsibilities without assigning titles or creating reporting relationships. In this way processes help structure how work gets done while the architecture remains fairly informal. Fractal designs keep organizations relatively flat and free of artificial power structures. Creating a flatter organization empowers people throughout the organization to make decisions based on their expertise, experience, and the strength of their ideas, not their hierarchical position.
Check out Roca's complete post for the full matrix and much more on his ideas.
Do you think Roca's on to something?