The best organizational structure for a Startup is proactive, looks to the future, and leaves room for growth.
Everyone generally wears multiple hats in a new business, so it may feel like a team structure isn't necessary. But starting with a vision of what your ideal future looks like helps to set you and your team up for success.
By proactively envisioning, you can proactively develop your team and anticipate the people you need for growth. You'll be ready for it and get there faster.
What is Organizational Structure?
In a nutshell, an organizational structure is your company's makeup. It breaks down how work flows through the business, including reporting structure, task distribution, and decision-making.
Structure gives employees clarity, manages expectations, enables quicker decision-making, and provides consistency. Defining jobs, assigning responsibility for tasks, and clearly outlining roles leads to a more focused and productive team.
The best organizational structure for a Startup leaves room for growth.
Keep your long-term goals in mind.
Where do you want to be in the next few years? Look forward!
Look at who you have.
Define where you want to go (In 2 years, we want to grow by x)
What gaps do you need to fill?
Who do you need to make it happen?
Look at your company like a puzzle.
Who do we have, and what roles are open? What are our current needs? What will this job look like in two years?
How will the jobs we have evolve within the company as a whole? Are we leaving room for growth – for our people and for our business?
Respond before you need to.
Rather than waiting for employees to feel overworked because of explosive growth, look to the future and know where you want to go. Plan for the people you need by establishing key decision making metrics about when to add new team members. That way, when you’re quickly growing, you already have a hiring strategy in place and will feel more confident in your hiring decisions.
3 times to reassess the structure of your team:
1. When you have plans for exponential growth.
Big plans on the horizon? If you are about to introduce new products or offerings or want to increase market share, it's a great idea to audit your structure first. Not only will it make your launch easier and more effective, but you'll be ahead of the game, allowing for smooth and easy growth with no hang-ups.
2. When you have been reacting and quickly adding new team members.
If growth is happening quickly and you are reacting by quickly hiring, you may not have had the chance to properly define each role, ensuring the tasks are divided and that each job fits into the bigger picture. To ensure role clarity and success for each person on the team, new or otherwise, taking the time to plan for additions is key.
3. If roles are blurred and teams are misaligned.
At the beginning of a Startup, when everyone is doing everything, there are often no defined tasks for roles and no strict communication channels. Once your company grows, it becomes much more important to detail your organizational structure. Without it, you can end up with confused employees who are unsure of their exact duties and fit within the company.
Problems that can arise from an ineffective organizational structure
Be careful of these potential pitfalls of improper planning.
More mistakes are made by overworked employees wearing too many hats
A drop in customer satisfaction
Low morale and an unmotivated team
Not meeting goals
High employee turnover leading to money wasted on hiring and onboarding
Tasks dropping through the cracks due to blurred job lines and ineffective communication
Slow or inefficient decision making
During periods of growth, every new hire changes the dynamic of the business. Each new team member shakes things up! How we, as leaders, introduce new employees and define roles has a considerable impact on how well that new person fits in (and how our existing team feels about it). The best organizational structure for a Startup puts the puzzle pieces together for a solid, confident team, well-defined roles, and simplified communication.