How to create a Team Structure that works for your Startup
You probably started your business to solve a problem. When you first began there were likely a lot of sleepless nights as you managed every role you needed for your business. But now, you’re ready to change that. You’re hiring—congratulations! As you consider hiring your first employees, or even if you’ve hired a few folks onto your team already, the structure of your team will impact your ability to grow and function with agility.
There are two basic organizational structures generally thought to be ideal in the business world. They are vastly different and seem to be in stark contrast with each other, though both agree that when your team is functioning at its best they are organized around job functions. Meaning the structure you choose to use should group your team together with the duties they perform or their areas of expertise.
Here’s what each of those elements means to an organization:
Chain of Command
Your chain of command is how tasks are delegated and work is approved. The team structure allows you to define how many “rungs of the ladder” a particular department or business line should have. In other words, who tells whom to do what? And how are issues, requests, and proposals communicated up and down that ladder?
Span of Control
Your span of control can represent two things: who falls under a manager’s, well, management … and which tasks fall under a department’s responsibility.
Centralization
Centralization describes where decisions are ultimately made. Once you’ve established your chain of command, you’ll need to consider which people and departments have a say in each decision. A business can lean toward centralized, where final decisions are made by just one or two entities; or decentralized, where final decisions are made within the team or department in charge of carrying out that decision.
You might not need the team structure right away, but the more products you develop and people you hire, the harder it’ll be to lead your company without this crucial diagram.
Mechanistic Versus Flat
Mechanistic or vertical teams are grouped with clear hierarchy and chain of command. Each team member knows where they stand, who their direct manager is, and who their manager’s manager is. They can follow the structure all the way to the top with the CEO. It’s clear to any person entering this workforce exactly who they report to and who will give them the information they need to complete their job every day.
Flat or horizontal teams are not quite as clear cut. You’ll need to define who manages each area of the business to approve things like raises and paid time off requests, but generally, anyone can give input and an intern’s ideas are not considered any less than those coming from your Director of Finance. The chain of command, or how work is assigned, isn’t as strict and leaves room for a lot of flexibility.
How Your Team Communicates and Works
When choosing between a mechanistic or flat organizational structure the most telling piece of information you’ll need to gather is how your team communicates now and if you’d like that to be how they continue to communicate moving forward. Thankfully, their natural patterns of communication and collaboration will tell you everything you need to know.
If your team looks to certain people for communication, it may make sense for you to adopt a mechanistic structure where they can clearly go to certain folks for updates regarding the business. In this structure, your leadership team will divide and assign work to the folks below them. Businesses with stable environments who perform routine tasks or those who are under strict government regulation will thrive in this structure where one person must be responsible for completing a task.
If your business suggests teammates check their metaphorical business card at the door upon arrival every morning, you’re likely to fare better with a flat structure. Ideas and communication can come from anywhere in this model, where there may be dotted lines between team members whose roles may not fit in one particular department. Departments will be tasked with initiatives and can split the load however they see fit amongst themselves. As companies grow, you’ll see natural leaders emerging from this flow and you can continue to have a flat structure while you promote various people to lead the teams collaborating to solve complex problems.
Real-Life Application: The Matrix Approach
While there are plenty of examples of rigid mechanistic structures, like the military, the flat organization’s inspiration is a little harder to find. Most companies tend to work in a hybrid of these two structures, referred to as the matrix structure. The most prominent large scale example of a combination organization is the sportswear brand, Nike.
In this style of organization, decision making and authority flow both vertically and horizontally. The teams are grouped by geographical division who can each act semi-autonomously. Because of this, there are no “standard products” that come out of Nike. Each group in their organization is given the authority to create and own products for their region. This keeps them agile and able to develop their products with relative ease as every decision isn’t bubbled upward.
Use your people skills to build your team
For your team to thrive you must be approachable, friendly, authoritative and responsible. In other words, a good manager and leader.
You may need training to help you become a better manager and there’s no shame in that. Running a business is a learning process – and just like your employees, you can learn and improve.
After all, the better you are at managing people, the better your team will perform and the faster your business will grow.
