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Can an organization grow without bosses and formal authority?

Most people are familiar with the traditional hierarchical organizational structure – one person at the top has a handful of direct reports, who in turn have a handful of direct reports, who in turn… You get a pyramidal structure with as many levels as required by the organization to operate as it wishes.

At the other extreme of the organizational structure spectrum, you have small dis-organized entrepreneurial environments – the company founder with every employee reporting to him / her.

As the organization grows, we are trying to implement a new organizational structure that is innovative and that moves away from the old paradigms. The challenge we are facing is that we want to implement a structure that is scalable – will work immediately and throughout the organization’s growth – and respects the fundamental values of the organization.

Sounds easy? Try to come up with an organizational structure that can work with the following constraints:

  • every employee owns shares of the company
  • nobody has authority over another individual
  • everybody can pursue their goals as long as it fits within the company’s mission
  • people choose their assignments
  • leaders are accountable to achieve results
  • the company has to be profitable
  • leaders can only build teams through negotiation and influence
  • collectively people decide where to deploy resources (people and money) and which projects to pursue
  • no single area can have more power than any others
  • there is no Human Resources department
  • the organization is approaching 100 employees in 4 cities (2 countries)

I’d like to hear your suggestions. I’ll let you know in a couple of weeks what the new structure looks like.

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8 Comments
  1. It’s an interesting delima you’re facing. I hope you haven’t hired bloodsuckers…errr, sorry, I mean consultants.

    If you haven’t already, check out Ricardo Semler. He has an MIT video: http://mitworld.mit.edu/video/308

    which is an excellent introduction to his thinking or else his book:
    http://www.amazon.com/Maverick-Success-Behind-Unusual-Workplace/dp/0446670553/ref=sr_1_1?ie=UTF8&s=books&qid=1246037731&sr=8-1

    is excellent as he actually practices what he preaches and runs a large company (@4,000).

    Restructuring a company that is going from the entrepreneurial/creative/chaos phase into a growth/process phase is a difficult endeavor.

    One of my companies is actually entering that tranformation. They are going from a 70 person/one office stable firm to one that will triple or quadruple in size in the next three years.

    You may also want to check out Larry Grainer’s “Evolution and Revolution as Organizations Grow”.
    http://ils.unc.edu/daniel/131/cco4/Greiner.pdf

    His thesis is that as organizations grow, they go through long periods of evolution, where you expand the existing structures, and then period of revolution, where you destroy the previous structures and replace them with new structures which are necessary for the next phase of growth.

    Great blog and I look forward to hearing about what you decide.

    July 19, 2009
    • Thank you for the suggestions. I will certainly read the references you provided.

      Transforming an organization while maintaining the culture is challenging and very stimulating. Hopefully, we’ll do it right (without external help) and reach our goals without a conventional structure.

      July 20, 2009
    • Andrew, thanks for the great references. I finally watched the video and read the pdf document. Good stuff! I plan on starting to read the book during my upcoming vacation.

      August 1, 2009
  2. I’ll be interested to hear how things go. Remember the old warning your mother gave you. You can’t have your cake and eat it too.

    July 21, 2009
  3. Bogdan #

    Maybe you shall try using Holacracy?

    http://www.holacracy.org/system/files/HolacracyIntro2007-06.pdf

    July 22, 2009

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