On setting up an organisation

Let's say you are a leader looking to start a new firm. You have resources, the mandate, and the authority. You also have that manana from heaven - a clean slate. 

Here is one recommended approach to putting your organisation together, if you have the resources.

Organisation Structure

Obviously, one of the first things you will think about is Organisation Structure. 

This part outlines the steps to create an organisation structure that will actually work. 

But first, lets talk about the things that DON'T work. 

• The Structure is led by the leader, not the consultant 

A therapist knows the right behavioural elements, but they don't tell you what to do. Instead, they do the frustrating job of pestering you with questions until you realise what you want to do. There are two kinds of consultants you can bring on board - the first, will do what a therapist does, bring the org structure from within you, because you have to live with that structure, not them. 

The second kind will come in and tell you how you should operate, and put 15 analysts on the job. 

Get the first kind. With one key difference. When they see you doing something that is obviously not going to work, they tell you that upfront. If there is enough trust in the relationship, this leads to mutual learning and saves time. If not, the consultant will have to use the option of asking questions until you realise what is going to work for you. 

Here is why the leader is the key decision maker on culture. 

In Nov 2020, the new CEO, Thierry Delaporte, completely overhauled the org structure of the company. This is the email that he wrote to employees then: 

https://www.cnbctv18.com/information-technology/wipro-ceo-thierry-delaporte-writes-mail-to-employees-highlights-organisational-changes-full-text-7469451.htm

Less than a year later, Wipro had changed its story completely. 

https://timesofindia.indiatimes.com/business/india-business/a-frenchman-sitting-in-paris-turns-wipro-around/articleshow/87091176.cms

How was a behemoth like Wipro transformed in under a year? 

The leader created an org structure that allowed them to monitor the business in a way that worked for them, and then appointed people they trust in key roles. 

THAT is the power of leader led org structures. 

• There is no such thing as Industry Standard or Industry Best Practice 

The only thing that matters is common sense and alignment. Some industries have to do some things more than some other things. We take inputs on that, sure, we understand what others are doing and how its working for them. But we do not make those practices our goalposts. Not in anything, and certainly not in strategic things like Org Structure or Business Planning. 

In an emerging industry, we have the luxury of defining the industry standard. In legacy industries, that bandwidth may be a little lesser, but its there. 

In the early 2000s, all Indian IT companies moved to this grid structure - Verticals and Horizontals - Industry * Geography. It was this matrix structure that was dismantled by Thierry Delaporte. 

What Works aka How to define an Org Structure 

A. Define your first line. 

How do you want to view your business. If you had to get 5 key things about your business on your fingertips and have 6 people on a hotline, what would those numbers be and what would be those 6 roles? 

That's the first step - to define your first line. 

B. After that, do a culture workshop. 

A Culture Workshop is the most important thing that you will do in the Org Structure journey. Write out the 6 words that reflect the culture that you want. 

A CEO I worked with recently was insistent that the word he wanted was "family". Even in a competitive industry like IT, he did not want to create a culture focused on competition or personal excellence alone. When thinking of work, he wanted people to think of the office as a family they belong to. 

In the two years since then, we have done 3 employee dipsticks and family comes right on top when people talk about what their culture is. Trust comes a close second. :) 

C. Then, write the JDs and hire the right people 

JDs are important, esp for your direct line of reporting. Hire the right people. People who bring their own functional expertise, and more importantly, share the same keywords for culture. 

Trust has two components - Intention, and Action 

The first is about shared values. The second is about delivering results. Trust is a biped, it needs both to walk the talk. Ensure you bring people who share the values, but can also deliver business results in a foreseeable time frame. That is the only way that their teams and your stakeholders will trust you. 

C.1 The Compensation 

Do have numbers in mind, but be flexible. This is the only place where "industry standard" almost trumps "What we bring to the table." 

D. The Org Structure guidelines

The next step is to create guidelines for an org structure. You can decide lean and efficient, or gig workers preferred, or diversity first - anything works. But do have a small set of guidelines that you communicate clearly to your first line of command. 

E. Let them make their own organisations 

After this, let them make their own organisations. In fact, have this as a key interview question - as a department head, how would you like to structure your organisation. 

Making it Run

A. Involve your own HR team as early as possible. The longer you let consultants run the show, the harder the KT. 

B. Put HR processes in place. Follow an HR Portfolio management approach. Don't go piecemeal. 

C. Invest in human process excellence. Don't think of the function as paper pushers. Give them aggressive talent targets and give them the teeth to bite. For instance, if a manager loses more than x% of their team over a period, they should be able to highlight that as an organisational process. If they find it hard to fill a position for more than x weeks, either they complain or you complain "We are trying our best" or "Market is tough" is not acceptable response. 

D. Hold your HR accountable. Typically, HR tends to enter the room with reasons like "Business needs". But there will be no business without people. Their core job is to marry business needs with talent aspirations. That is literally their job description. If you bring a numbers based approach to HR, you will find that it is hard to hire the right HR talent, but once in, they will LOVE working with you. 

E. Do NOT compromise on values and culture. It never pays. Its very short term, and it guarantees failure. Even if the values route appears to be longer, more painful and far more expensive, remember that markets can stay volatile a lot longer than economies can stay solvent. So, responding to volatility with volatility-supporting behaviour does not guarantee success.