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Weak Organizational Structure Can Lead to Business Implosions within Startups and Established Businesses Alike

Weak Organizational Structure Can Lead to Business Implosions within Startups and Established Businesses Alike

When a business has been successful enough for long enough, minds will inevitably turn to the eternal question of “What next?”.

As sure as night follows day, the response to this question tends to relate to scaling up. If you have just climbed a mountain, you do not look for an identical mountain and see if you can climb that; you look for a larger, more challenging one. So, a company looking to build on its existing successes will, all things being equal, look to have greater success going forward.

This is where one of the most important considerations in modern business practice comes into view: How do you go about scaling up a business. You have had initial success, and sustained it, so your working practices are clearly sound. So, when you want to reach a higher pinnacle, is it enough to simply add more bodies to the room and have a bigger team? You have probably already guessed the answer is “no”, and you are right. But let us look at why.

A structure that works on one level will not necessarily work on another

In the most basic of explanations, if your initial success were secured with six people – a manager, two sales operatives, and three admin support staff – then scaling up directly to a team of thirty would suggest five managers, ten sales ops, and fifteen admin. However, take the thought experiment on a step: maybe, in that team of six, there were occasions when two of the admin staff found themselves working on the same problem – at that scale, it is a problem that is easy to identify and simple to nip in the bud. The larger the team gets, the more a problem like that can grow, and in such cases, it is liable to be a bigger problem.

That is a major simplification of the kind of problem that can result from scaling a business without paying due care and attention to the organizational structure. The important lesson to take from it is that scaling a business to make it grow is not as simple as replicating the existing structure on a larger level. Therefore, Agile strategies for startups are important; they allow you to identify where changes will need to be made and to scale up a business without losing the ability to work quickly, silo problems and solutions, and retain the things that make a company work.

Scaling up a business is like building a house of cards

A small startup has many disadvantages compared to a medium-to-large business, of course, but one advantage it has is a level of freedom that allows it to react to pressures that occur, and another is that the pressures will inevitably be smaller. If you need to build a house of cards, then an imperfection can sometimes be tolerated for a while if the house is just two levels tall. If you want to build it four levels higher, the same imperfection can be catastrophic because the scale is more ambitious. This is where Agile for startups is essential; it acts to streamline operations, something which gets more important the larger a company manages to grow.

As your company grows, it is important to pay attention to the way in which it changes, testing the structure of your organization with a three-step process of Strategies, Priorities, and Outcomes.

On the first step, that of Strategy, Agile consultants would ask you to develop a hypothesis about the structure of your company – for example, that productivity increases when you make a particular decision about how your business is arranged. The Priority step would then see you test that hypothesis by making a change to the structure of your business. In the final Outcome step, you will then learn from the results of that change and be able to trace the impact of the change.

The importance of testing your preconceptions when scaling a business

Kicking on to the next level in business is not like starting all over again; you have learned a lot from the success of the initial phase of your enterprise. It does, however, present you with a new set of challenges that may make you feel like you are a novice. Some of the old assumptions will no longer be as reliable as they used to be, and Agile methodologies for organizational structure will be invaluable in helping you figure out the next step to take. As you take the initial steps on the next leg of your business journey, it is useful to know that there are strategies that will make your adaptation smoother and more successful.

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