Grow or Die #2: Structure Comes First

At this very moment, your business is either growing or dying, and if it’s growing, you’ll need to add more people. But how and when do you go about doing that? In this blog, I’ll share why having a clear organizational structure is the key to sustainable business growth along with why a lack of structure keeps many businesses from becoming mature Stage Five companies.

The first installment of the Grow or Die Series discussed the physics of business and how healthy organizations must continually work to overcome entropy. In this second installment, I’ll explore mastering the Structure Competency so you can achieve your Vision and build an extraordinarily productive, humane, and resilient company that will leave a lasting legacy.

(If you haven't yet, I recommend you read Grow or Die #1: The Physics of Business before diving into this article.)

I wholeheartedly stand behind the philosophy “structure first, people second.” Prioritizing your organization’s structure includes getting your Senior Leadership Team (SLT) to align not just on what your Core Functions are for the next 6–12 months but on making the roles, accountabilities, and responsibilities (RARs) associated with each seat crystal clear.

If you’re growing, and that’s my strong hope for you and your company, failure to master this relatively simple discipline will result in bad hires (if you don’t know what the RARs are, how can you possibly get clear on the required skills and experiences?) and confusion in terms of who is responsible for what (otherwise known as chaos). Keep reading to find out more about why mastering the Structure Competency is essential if you want to have any shot at building a great company that you’ll love forever.

Structure: Your Foundation for Sanity and Scalability

Picture this: You're at the helm of a rapidly growing organization, surrounded by a sea of new faces, each with their own strengths, weaknesses, and level of ambition. Since you’re an ambitious founder (someone genuinely interested in building a Stage Five Company), you're wondering how to keep everyone focused, aligned, and thriving. You get that for this to happen, you owe it to them, starting on day one, to not just give them crystal clear RARs but also to help them understand who is responsible for what across your organization (so they don’t step on someone else’s seat and start off on the wrong foot with one or more of their new colleagues).

This is why mastering the Structure Competency is so important. As an ambitious founder, your goal is to turn your business into a mature embodiment of your Vision. As I’ve shared in prior blogs, the only way to get there is to allocate more and more of your time to doing the work you’re best suited for. Mastering structure makes it super clear why it's so important for an ambitious founder like you to identify the stages of structural development that your organization needs to pass through for you to go from leading a lower-stage business to a Stage Five Company — one where 90% of your time is doing not just the work you are great at and love doing but work that will have the biggest impact on your company’s long-term success.

Building a Great Company Is Like Building a Great House

As I’ve written about before, building a great company is like building a great house. First, you need a compelling Vision for the house (your company). If your Vision isn’t compelling, you won’t be passionate about the build, and it will show up in so many ways — you’ll see lots of stupid decisions and/or misses every day once you start to live in it. (I know. I've renovated and/or built over 20.)

Second, you need plans. You need a set of plans that describes the foundation, framing, roof, plumbing, electrical, and numerous other components that ensure the structure is habitable and safe. These plans are the necessary first step to reaching your desired outcome, a house you can proudly call home. Similarly, a plan for your business structure is vital for growing your business into a company that reflects not just your Vision but a company you’ll love forever.

Once your plans are in place, you need tools and disciplines. The tools for building a house (hammer, saw, level) or a company (Scorecards, email, Slack, document storage, and so on) are obvious. So are the disciplines: You need a carpenter, roofer, and concrete for a house, and you need sales, marketing, customer service, ops, and accounting for a company.

Mastering structure is essential if you want to master making sure everyone in your organization knows which disciplines are essential and where they are housed (pun intended, sorry).  

Now, let’s get into the ABCs of mastering the Structure Competency.

The ABCs of Mastering the Structure Competency

An important part of mastering structure begins with identifying Core Functions. Your Core Functions are the essential core disciplines a business needs to expertly operate at its current Stage of Development.

From the beginning, these disciplines include marketing, sales, operations, and finance.

If your business is at a very early stage (for example, a company focused on product-market fit), you may own every one of these disciplines. As your organization evolves toward Stage Five, you’ll need to let go of each one of these disciplines and hire a domain expert to lead and run each one.

If you understand where you are developmentally and are clear on where you need expert leadership in the next 6–12 months (for example, you’re a Stage Four Company with established 3-Year, 1-Year, and 90-Day Goals), you should have a sense for what your structure needs to look like to get from here to there.

Less Is More Until It's Not

As I’ve observed over the years, communication complexity increases significantly as the number of people in an organization grows. The illustration below shows an example of a three-layer department structure down to the team leader level: As you add more layers to your structure, communication becomes increasingly complex. The more people you add, the more opportunities for messages to get lost in translation, leading to confusion, frustration, and wasted time and resources. That's why creating a clear organizational structure, one that enhances communication rather than hinders it, is necessary for any founder who doesn’t want work to suck for anyone in the company. By clearly defining how each person contributes to turning the Vision into reality (RARs), you create a framework for effective decision-making, targeted hiring and development, and a sense of ownership and accountability that permeates every level of your organization.

With a well-defined structure and a reasonably compelling Vision, your team will have everything it needs to confidently navigate the complexities of organizational growth and become a Stage Five Company. Remember, structure is critical if we want to have any chance of consistently and collectively staying focused, aligned, and thriving.

Survival to Stewarding: The Evolution of Leadership

As any company grows, so must its leadership. In the early days, founders are often consumed by day-to-day objectives, fighting to keep our businesses afloat. As organizational structure solidifies, we can shift our focus outward and upward toward longer-term goals and strategic planning.

In a well-designed organizational structure, roles are separated into different Strata based on the time span of their responsibilities (TSRs). Each Stratum represents a distinct level of work complexity and decision-making authority. As individuals progress through the Strata, they take on more responsibility and focus on longer-term objectives.

By organizing roles into Strata, leaders can ensure that each team member is focused on the appropriate level of work and that decision-making authority is distributed effectively throughout the organization. By understanding the TSR for each role, you understand the role that everyone plays in unfolding your Vision and how that role contributes to long-term success. You also ensure that decision-making authority is distributed appropriately throughout the organization.

Bringing everything together into a unified awareness of your Vision, Core Values, Strata, and TSR helps to confirm you’re on track with where you want your organization to be at any given time. This progression is reflected throughout the Stages of Development, with each stage building upon the previous.

As new people join the team, you soon realize that you must learn to delegate, trusting in the structure you’ve created and the people you’ve hired.

Keep in mind that delegation doesn't mean abandonment. Effective leaders provide the support, resources, and guidance their teams need to succeed by investing in training, fostering open communication, and offering advice when needed. This allows you to become the visionary and strategist who charts the course for your company's future.

Building a clear, logical structure can be challenging, but the rewards — a more agile, resilient, and growth-oriented organization — are more than worth the effort.

Build It, Then Staff It

Like having a blueprint for a skyscraper before laying the first brick, without a clearly defined structure, you risk building a wobbly, inefficient business that can't stand the test of time. If you’re an ambitious founder, you want to create a solid foundation for success.

Imagine a company where every team member knows exactly what they're responsible for, who they report to, and how their work fits into the big picture. A compelling Vision coupled with a well-defined structure and crystal-clear clarity on your RARs paves the way for efficient communication, targeted hiring and development, and effective delegation. When everyone understands their purpose and how they contribute to the company's success, it's like adding fuel to your engagement and productivity levels.

But the benefits don't stop there. Building toward a Stage Five Company and beyond means adding people, but it can't just be anyone. You must add the right people and build a team to collaborate effectively. When everyone can see how their efforts fit together to create something greater than themselves, it's like a magnetic force pulling them toward a common goal. And that's where the magic happens.

To build your dream team:

• Document and share your compelling Vision so it's easy to attract and retain people who are drawn to helping you turn it into reality.
• Clarify your RARs, identify critical skills and competencies, conduct thorough selection processes, and provide comprehensive onboarding and training. This approach draws upon our agreements-based leadership philosophy and turns expectations into agreements.
• Make your Core Values crystal clear so it's relatively easy to identify the right people for your organization.
• Use reliable benchmarks like the Competency, Commitment, and Capacity (CCC) framework to be sure you have the right person and that you are confident you are putting them into the right seat.
• Create a high-trust, agreements-based culture by turning the things that really matter (RARs, Core Values, KPIs) into genuine two-way agreements. Prioritize maintaining open communication and seeking feedback through regular check-ins, performance discussions, and annual engagement interviews.
• Assess and improve your organizational structure regularly (at Ninety, we’re looking at it almost weekly) to align with new objectives and market conditions. For example, as a company nears a $100 million valuation, it becomes subject to ever-increasing levels of scrutiny, which impacts how Ideal Stakeholders talk about the company. One source puts it this way: “As employees see the brand becoming more public-facing, it’s important that the story they get from leadership internally aligns with the one they see in the news — no one wants to hear endless rules and caveats in the company all-hands and unmitigated hype online.” Companies must continually engage every team member by encouraging open communication and creating a culture of trust and transparency.

Building a great company is an ongoing adventure that requires continuous improvement and a commitment to hiring and developing the right people. With a clear structure, a Core Values-aligned hiring process, and a culture of learning, growth, and trust, you'll create a lasting legacy of greatness.

Turning Your Vision into Reality

As an ambitious founder, you have a remarkable degree of responsibility. After all, you have the power to grow your organization into something beautiful that brings significant value to the marketplace and meaningful work to tens, then hundreds, and then maybe even thousands of people.

Or, you can run it into the ground. Sadly, we’ve seen too many leaders who have done the latter (even with the best intentions). That’s why mastering the art and science of organizational structure is so important. Do it for your peace of mind. Your Ideal Stakeholders will thank you, as will your family, friends, and those who have your back.  

To give yourself the best chance of success, ensure that structure is ingrained into every fiber of your organization:

• Clarify your company's Vision (for example, through Core Values), and ensure they're respected and reflected throughout your organization.
• Define the Core Functions you need experts to lead within the next 6–12 months.
• Define the RARs for each role in your structure, and use frameworks like CCC to help ensure you put the right people into the right seats.
• Create a high-trust environment by using clear communication to turn expectations into agreements.
• Regularly assess and improve your structure.

By adopting these best practices, you’ll build resilient, high-performing teams that support your Vision and stay true to your Core Values through the challenges and triumphs of long-term growth. At Ninety, our software supports you with the tools and frameworks (like our Org Chart tool) you need to turn your Vision into reality, whether you're just getting started or scaling to new heights.

As an ambitious founder, you’re either growing or dying. It’s a law of the universe. Structure is your road map for navigating this journey, and by putting structure first, even before your people, you’ll gain the Focus Filters you need to build a great company that makes the world a better place and leaves a lasting legacy.

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