In start-ups that are not tech companies, most of this advice still applies. Substitute “operations” for “engineering” and think of “product” as either a good or a service and you have an idea of best practice. We love the recommendation to keep the structure flat in order to foster collaboration. In reference to Metcalfe’s law and its application to structure, keep in mind that the strength is in connectivity. Structure is but a part of culture that fosters connectivity. In short, think about the impact your structure has on nurturing collaboration and creativity in order to have greater potential for success!
Organizational structure is challenging. Public companies struggle with it as much as startups do. When I was at Google, I was charged with calculating PM/Engineer ratios by team as part of the research into our company structure. When startups ask me when they should hire a PM or what the span of control should be for a sales team, I share this experience.
First, I’ll share two general observations: flatter reporting structures are better and smaller teams are better. These two conclusions have the same root: Metcalfe’s law. The fewer people within a team, the less communication overhead is required to keep everyone on the same page.
Second, a company has one goal but leverages 4 teams to achieve that goal: engineering, marketing, product and sales. In well run companies, these teams should exert tension on each other. Sales advocates the path to short term revenue growth. Product should advocate…
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