Organizational structure for startups

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In this video, we are talking about organizational structure and how it helps with efficiency, decision-making, communication, and transparency within startups!

In today's video, Amaury talks about the need for an organizational structure in a start-up. A startup has a lot of departments like HR, Finance, Marketing and so on. It is almost next to impossible for a single CEO to wear all the hats and be the one managing all of these at once. One must surround himself with the people who can support and assist him in fulfilling these roles which might not be the subjects of expertise for the CEO. This calls for a startup to organize themselves, structure the company and delegate tasks to maintain efficiency! What is an Organizational Structure for a Company? An organizational structure is a system that outlines how certain activities are directed to achieve the goals of an organization. These activities can include rules, roles, and responsibilities. The organizational structure also determines how information flows between levels within the company.

The Four Types of Organization

Functional: The functional structure is based on an organization being divided up into smaller groups with specific tasks or roles. For example, a company could have a group working in information technology, another in marketing and another in finance. Each department has a manager or director who answers to an executive a level up in the hierarchy who may oversee multiple departments. One such example is a director of marketing who supervises the marketing department and answers to a vice president who is in charge of the marketing, finance and IT divisions. Divisional: Larger companies that operate across several horizontal objectives sometimes use a divisional organizational structure. This structure allows for much more autonomy among groups within the organization. Under this structure, each division essentially operates as its own company, controlling its resources and how much money it spends on certain projects or aspects of the division. Additionally, within this structure, divisions could also be created geographically, with a company having divisions in North America, Europe, East Asia, etc. Matrix The matrix structure combines elements of the functional and divisional models, so it’s more complex. It groups people into functional departments of specialization, then further separates them into divisional projects and products. In a matrix structure, the team members are given more autonomy and expected to take on more responsibility for their work. This increases the productivity of the team, fosters greater innovation and creativity, and allows managers to cooperatively solve decision-making problems through group interaction. This type of organizational structure takes lots of planning and effort, making it appropriate for large companies that have the resources to devote to managing a complex business framework. Flat A flat organizational structure attempts to disrupt the traditional top-down management system of most companies. Management is decentralized so there is no every day “boss.” Each employee is the boss of themselves, eliminating bureaucracy and red tape and improving direct communication. A company adopting this type of structure for everyday purposes typically establishes a special top-down management system for temporary projects or events.

How to Pick the Best Organization Structure?

First off, as a CEO you need to: Define Hierarchy; make teams according to the roles such as marketing, product development, etc. It may not in a top-down structure but rather can be a flat one. Establish Communication; Help make the information flow and put everyone on the same page. Help Employees Grow: Develop a clear understanding of the goals of the employees in coherence with the company and grant them a purpose. Practical tools: Project Management is surely tough but not impossible There are many software that work together with methodologies to integrate with the team and the to-dos of the company. We are really inspired by companies like Invision, Zapier Buffer, etc. They are known to use a great concept called “Holacracy” which basically reduces the number of managers and increases the number of doers instead. The decision making is given to the self-managed teams. To tread on this path, one of the prerequisites is strong leadership and visionary top management. Shared Company Vision: Needless to say, it is very important to share your vision of the company with your employees. It would help them step into your shoe and make decisions that a CEO has to.  Strong Values: Let them in to see how you view things, your perspective, and your outlook towards life. Consider sharing your lifestyle and inspire them. It will also help you find employees that might be like you. In short, you need to centralize your team, use effective communication through chat tools, defining meetings with specific goals and encourage your team to do self-evaluation Transparency: One of the most sought after qualities in a leader. You need to set yourself as an example for your employees. Sharing salaries and finances is a great way to achieve this. Sharing your goals, hobbies, and plans can help you go for the extra mile to be completely transparent!