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Be intentional about your organizational design from the beginning, and evaluate it periodically to ensure that your design principles still align with your company values and stage of growth. Use the data you collect from exit interviews, turnover, employee surveys, and employee conversations to determine if the design and principles are still relevant.

Your initial design work will be with the CEO, and will also engage the leadership team. Your work on organizational design is not theoretical, or something that stands alone. Just the opposite! It goes hand‐in‐hand with culture and values conversations. Your organizational design will never be perfect and will always have tradeoffs to consider. There's a saying that you should “never let perfect be the enemy of good” and that's the case with organizational design. As long as your design aligns with your culture and values, it ought to serve its purpose, which is to help people be as productive and engaged as possible and to ensure that there is the right flow of communication between people and teams.

There are a few things to build in from the beginning, including practices around manager span of control, manager role, cross‐functional teams, and how you think about hierarchy. People have preconceived notions about all aspects of organizations, and having conversations with the leadership team to help them think about the implications of organizational design principles is critical. It's really easy to grow too hierarchical where managers have small spans of control or if you hire managers who have a “command and control” style. You can help leaders get creative about career development when a team isn't big enough for a leader, and employees want to take on leadership roles. Employees in this situation can expand their role by managing workflow, team operating systems, or projects, without becoming the team manager.

In the beginning, you may not have executive leaders for all the different functional areas, so some executives will lead functions that are new to them. You may have a COO who is also leading Sales, or a CFO leading Technology. Help ensure that leaders who are responsible for several functional areas hire functional experts or get strong mentorship in the areas where they aren't as knowledgeable.

It's best to evaluate organizational structure every six to twelve months for effectiveness, and to make small adjustments, or do a full redesign and restructure if absolutely necessary. Often as you grow, you realize that you've prioritized role function over product/division, and you may need to swing the pendulum the other direction. While every organization has different needs, many organizations are moving toward flatter, more networked, team‐based structures. These structures need even more clear leadership and operating systems to be most effective.

At DoubleClick, my division managed global services for all product lines. Each product line would separately modify their investment in services based on the success of their products. When the key executive and I started in the division, small regular layoffs were standard. The Product line would reduce their investment, and then the Services organization would reduce their staff. This resulted in a lack of engagement and productivity, as people were constantly wondering if they were going to be next to go. In addition, changes were made without any notice. One day, you'd be working alongside a colleague; the next day their desk would be cleared out. I worked with the new executive to understand the impact of these reactive changes, and we agreed on a new process. We created strong career pathing so people could move between roles and product service areas, and we also created a planning process for each product area to follow, so we were able to predict need and manage our staffing appropriately. At one stage, we decided on a large‐scale change in roles, and proposed a consultation process that included transparency and engagement of employees. We were modifying over 100 roles, and this would result in a reduction of 20% overall. Within a week, we communicated the changes, asked people their preferences, assessed skills, and made all the role‐change decisions. Some people voluntarily left the organization and others took on new roles. There was some risk in this approach, and many of our internal clients were worried about losing their best service people. The result of the transparency and employee input was that we retained everyone critical to the organization, and people were more highly engaged than before the reorganization.

At Return Path, we made changes to the organizational structure periodically. At one point, we realized that one of our new product areas wasn't getting the right level of focus from the different functions. It was a new product and wasn't driving a lot of revenue, and when each functional team prioritized their work, this new product was last on the priority list. We moved the product into its own cross‐functional team that was managed separately from all the other functional teams to ensure we created the right focus within the company. Another time, we knew one area of the business needed to be divested, so we moved all our teams into cross‐functional business units, which made the sale much cleaner from both a balance‐sheet and people perspective.

When you change your organizational structure, there will be a lot of questions from employees and, perhaps, some anxiety on what those changes mean for them. To effectively lead an organizational redesign, you'll need to make sure you follow your company values and principles as closely as possible, to speed up the transition, because when you make decisions that impact people's role, manager or compensation, every moment employees spend thinking about the change is a moment when they are not being productive. Be as inclusive as possible in the decision‐making process and people will embrace change more readily. Common thinking is that the primary role of a manager/leader is to make decisions about people. That common thinking is limiting and defines the “command and control” model of leadership. If at all possible, it is more effective to make decisions with people, to be inclusive and collaborative. An inclusive approach takes longer and can be more difficult and it is also much more effective, more motivating, and leads to better results in the long run. People are more engaged, the more they are able to co‐create their environment and success measures. The leader's role can be to ensure that everyone is aligned and moving in the same direction.

Alongside the organizational design, you'll want to work with the CEO and leadership team to create a company‐wide operating system. By “operating system,” I don't mean a bureaucratic structure that serves to control people or burden them with reporting requirements just so senior leadership can be informed. I mean a transparent process that shows how often, where, and when your team will meet, how they will determine and prioritize their work, how they will communicate and connect with other teams at the company, and how they will hold each other accountable for results. A strong operating system that changes as the business changes helps ensure that all teams are aligned and working toward the same goals, and holding each other accountable for results.

One of the most impactful changes we managed at Return Path was a company‐wide agile transformation project. For years we used agile methodologies in our engineering department, and in December 2013, the week before my sabbatical, Matt challenged us to shift the entire company to agile practices by June 2014. When I returned in mid‐January, a team of four of us from the People and Program Management teams ran this project (along with our normal roles!). This was one of my favorite and most impactful cross‐functional teams so I'll call out my team: Mike Mills, Caroline Pearl, and Jane Ritter, with support from Dan Corbin. By June 2014, we had completed pilots with 12 teams, developed a framework for five team types to leverage agile practices, and trained 50 facilitators in how to effect change in their team's operating practices. In addition to the individual team changes, we modified the entire company operating system to leverage agile practices. We increased productivity by 13% in one year; we measured this by looking at a number of different metrics, the most relevant to other organizations being revenue per person.

Along with a company‐wide operating system, help to build your leadership team operating system. When you are small, this may be as simple as a tactical leadership team meeting twice a week, a strategic meeting once a week, and a company‐wide meeting once a week for everyone to share progress on goals and hold each other accountable. Patrick Lencioni's book, Death by Meeting, is a good resource to help you think through the different types of team meetings and how to run them.

You can also help establish these norms across the company. I recommend helping teams leverage agile practices: build a strategic roadmap, engage stakeholders in your work, align on prioritization, remove roadblocks in real time, collaborate on big projects, and keep a backlog so you aren't just responsive to every request that comes to you. It's really easy to fall into the trap of working on the most urgent rather than the most important. There are always fires to put out and having a strategic roadmap and a good operating system is critical for success.

Your operating system is not fixed in place for all time; you'll need to evaluate it periodically, and test to see whether it still serves its purpose, and redesign as appropriate. As you grow and change, your operating systems will need to be updated for your new organization structure. At the startup stage you may be able to pull everyone into one room for an informal company update. But when you grow beyond the one‐room company stage, you'll want to partner with your marketing/corporate communications team to develop more robust communication practices to ensure alignment.

At Return Path, we had an operating system that changed every year, except for the annual “un‐Roadshow.” The un‐Roadshow was a company‐wide kickoff to help everyone understand the final output of the annual strategic planning. Each team contributed to the plan, and no teams had seen the full and final plan. The un‐Roadshow always included in‐person time with the full leadership team for people to ask questions and have unscripted dialog to ensure they fully understood how their roles fit into the strategic plans for the year. The format was changed every year to keep the programming as unique and engaging as possible. The rest of the year included quarterly planning and retrospective meetings with all team leaders, distribution to all employees of the Board Book, and all hands meetings to discuss progress against goals. We followed up with roundtable discussions with leadership team members. It's a lot of work to maintain a strong operating system, and requires partnership with the CEO. It may not be your responsibility, but you'll definitely play a role in its creation and maintenance. See www.Startuprev.com for the final company‐wide operating system at Return Path.