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Design Your Org For Success
Note from Ishan
It’s time for a Guest Post again- this time by Ethan Winchell, Co-founder and COO of Truework. I came to know him last year, thanks to a warm introduction by a mutual friend. Ethan is building a fascinating company in Truework, that helps to verify income and employment status of employees and help to close loans and rentals faster. I really enjoyed learning about the company from him and how he and the team are solving a real identity management problem that not only consumes time and but also gives heart ache to everyone involved in the process - the customer (like a loan seeker), the bank and the employer of the customer.
In this week’s guest post, he explores Organization Design as a lever to scale up the company in its early stages, especially after it has found a product market fit.
Ethan is truly building a company for scale and I hope you enjoy reading his take on why to focus on hiring and goal setting.
Design Your Org For Success
You can find many tweets, blogs, and newsletters that discuss the difficulty and importance of finding product/market fit. Indeed, Marc Andreessen has famously said that until you have it, nothing else matters.
It’s all true!
After you’ve found product/market fit, fewer tweets and blogs, but still quite a few, talk about the power of category creation and brand narratives. That process is incredibly powerful.
And, you might even find a couple mid-twit memes on Twitter that look something like this:
Once again, great advice!
So, what is the post going to be about? A collection of links and memes about product/market fit? Not quite.
Despite the foundational necessity to create product/market fit, the power of the right product/market fit to create a massive market, and the enduring value that can be created out of a continuous focus on creative innovation, these things do not happen by accident within a company!
At a small company, the innate structure of the early founding team often means they happen somewhat organically. As a company begins to grow and scale, however, they need to be intentionally created. I call this process organizational design, and once a company reaches roughly the Series B/C stage (which is also usually the time the number of employees passes the Dunbar number), it becomes an essential pillar of a company’s foundation.
Done correctly, the right organization design sustains your early product/market fit to build an enduring business that is capable of both (1) reliably harvesting cash on some predictable future basis and (2) creating new innovations that replace or expand existing product/market fit over a long period of time (ie generations).
Organizational design is a wide ranging concept that includes things that can be reductively called “HR tasks” but require c-suite/exec team buy-in to truly be worth the effort - Hiring, onboarding, training, performance reviews, peer feedback, and goal setting to name a few. Other things I’d put in this bucket lack a more “traditional” home, but sometimes live within FP&A and/or BizOps teams - decision making, project scoping, retrospectives, dash-boarding, etc.
These things need to become company competencies (or hopefully points of excellence) to achieve ongoing, repeated success and yet, from my observations, they are usually treated as afterthoughts. Or, if not afterthoughts, as something as an immutable byproduct of something like “culture”, rather than something that can be intentionally designed.
Because, as I’ve previously written, focus is your best friend. I’ll simplify the above to highlight two things that done well vault you into the top percentile in organization design. Focus on hiring and goal setting.
Hiring, I’ll spend slightly less time on, as that is a fairly well worn topic in the startup advice annals. But, hiring is an important part of designing your organization. You’ve likely heard many of the pieces of advice that I emulate day to day - meeting/interviewing (almost) every one, advocating for slope over intercept in hiring panels, and holding talent to an incredibly high bar even if it means moving slower and refusing to cut corners. If the tools are simple enough with hiring, the pragmatic challenge is more mundane, there are no silver bullets, and it is incredibly time consuming. If, however, your executive team makes time to hire the best people, you are half way to designing your organization for success.
So, nice, you’re halfway there, now to go all the way…goal setting. Goal setting done correctly provides the necessary context and alignment for each and every person in your organization to just “make stuff”. As Elon Musk said, “Every person in your company is a vector. Your progress is determined by the sum of all vectors.” So, “make stuff”, but make sure everyone is making stuff that is accretive to each other - that’s goal setting. Goal setting done right provides clear coordinates for everyone to aim at, it clarifies ownership around projects to allow for clear decision making, and codifies hypotheses (check out Ishan’s earlier blog on North Star here as you think about goal setting). Some simple things we’ve done to improve our organizational design is quite simply to just focus more on the goal setting process, whether that is a new project (every project should 100% have a clear, written goal and exactly 1 owner) or temporally triggered (quarterly or annual OKRs).
Hiring and Goal setting, taken together, provide an incredible environment in which organizational design can flourish. Hiring the best people and giving them the right goals means that whatever the next product or market related challenge that emerges involves, you will have built an anti fragile system that can adapt to the task at hand, and likely succeed.
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