Having studied large corporations for years, Carol Sanford, author of the recent book The Responsible Business, has been surprised by how many outmoded corporate ideas she sees start-ups adopting in the name of structure. She spoke with Inc.com's Christine Lagorio.
What kinds of bad ideas do you see start-ups embracing?
Most companies start out with all of this bright energy, and with a few folks who act as equals. But as the company grows, the founder starts to think, Oh, we need hierarchy. We need to bring in outside people to manage. That model has been proved not to work very well, and yet many start-ups adopt it.
Aren't there times when bringing on an expert or great manager is smart?
Absolutely. But when you determine that you need something, you should look internally to see if anyone already has the skills, ability, and desire to fill the void, rather than instantly assuming you need to bring in someone from outside.
So how do you find that untapped potential?
I find if I ask employees, "What is it here that nobody is thinking about?"—it's then that you get creative energy from within the organization.
At what stage does an entrepreneur really need to start thinking about culture?
I hear people talking about culture all the time. How do you create the right culture? This is certainly important, but the more important question they need to be asking is, "How do we keep alive human agency in this company?" This will to act—it's so fundamental to entrepreneurs, but few of them ask, "How do we develop work systems to reinforce our innovative spirit?"
So how can fast-growing companies stay innovative?
I believe companies should create self-organizing teams, and they should ask people to commit and make a promise to reach beyond their current ability in order to serve customers. I encourage companies to organize these teams around classes of customers and encourage them to become the champions internally for them. You can organize everyone, down to the administrative staff, into customer-centric teams.
If you had 30 seconds to advise a start-up founder, what would you say?
Find out the essence of who you are as a company, and design from that. You don't ever want to borrow an idea from someone else. One thing I see happen in old-line corporations is they've created the idea of best practices, and there's no such thing! Entrepreneurial energy is about understanding who you are, what you're creating, what your market is, what's changing right now, what's in front of you—and then following that.
For more on organizational structure, go to www.inc.com/how-to-lead.