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The death of rigid organizational structures

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Are you thinking of starting a business? One of the most important things you will need to do as a founder is to think about the kind of structure you want your company to have.

In order to perform optimally, companies require different structures at different stages in the company’s lifecycle. The tendency is to have a more flexible structure in the beginning when the company is still small and a more rigid structure as the company gets bigger. The reason for this is that a more rigid structure helps maintain control centralized in a few key decision makers which can be helpful in big companies.

I believe that in today’s fast changing world flexible organizations are becoming increasingly necessary, even as companies expand in size. But is it realistic to hope to change a company’s structure every few months? The secret is to set up a foundation that will allow for these changes to happen organically, making these inevitable transitions easier for everyone to swallow.

 

HOW TO BUILD A FLEXIBLE STRUCTURE FROM DAY 1

1) Define values and culture from day one and hire people accordingly

Once you have decided the core values and the mission driving your company, you must make sure to hire people who align with this culture you are trying to set up. If your employees believe in what they are working for they will be more open to changes and adapt when necessary in order to drive the company through its different stages.

2) Give a voice to employees by including them in the decision making process

As a founder, you should thrive to give your employees freedom to express their opinions and to include their points of view when important decisions are made. After all, they are the ones running the company on a day to day basis and this will help give them a sense of ownership which will turn them in engaged and committed employees.

3) Set up teams around goals and projects

By setting up teams that work around certain projects or certain goals, you will create an environment in which employees will be used to change. This adaptability will help your company be faster in reacting to changes as it goes through different growth stages.

4) Set up transparent rules

People need to know what they can and cannot do, what their responsibilities are and whom they should ask for help in a certain situation. This will help give place to faster decision making.

5) Keep communication channels open

To make sure your employees voices are heard, you must make sure to set up the appropriate channels for them to be able to communicate with you and with each other.

 

BUT ARE WE SURE THIS WILL WORK EVEN IN BIG CORPORATIONS?

There is evidence that shows how flexible structures in big organizations are possible. An example of this is Zappos and its Holacracy structure. Tony Hsieh (CEO of Zappos) explains why he decided that Holacracy was the right move for his fast growing company: “Research shows that every time the size of a city doubles, innovation or productivity per resident increases by 15 percent. But when companies get bigger, innovation or productivity per employee generally goes down. So we’re trying to figure out how to structure Zappos more like a city, and less like a bureaucratic corporation. In a city, people and businesses are self-organizing. We’re trying to do the same thing by switching from a normal hierarchical structure to a system called Holacracy, which enables employees to act more like entrepreneurs and self-direct their work instead of reporting to a manager who tells them what to do.”

For more information on Holacracy please visit: http://www.holacracy.org/how-it-works/

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