Operationalizing your organization — A framework for CEOs part 2

When running a startup, small, or medium organization, structure is often lacking. Is there a need for structure? What if you embrace the philosophy of a boundariless organization instead? I don’t think there is always the need for a structure in the common sense of the word in the “business” world (setting up your organizational chart and defining roles and hierarchical conventions). And yes, you can embrace a shared leadership, boundariless model of collaboration (which has become increasingly popular in startups and tech organizations).

The question arises when you dig deeper into the purpose of an organization. An organization is a group of individuals working together toward a shared purpose; a higher objective that unites groups and individuals together and provides a clear direction. In this sense, there is the need for structure; mental models that everyone in the team can understand, no matter how many people there are in your team. If you are an agile, flat organization that doesn’t like to be boxed into a common structure, that’s a structure itself. It’s your identity, and similar to your individual identity, it’s a work in progress and what defines you.

If you don’t have a hierarchical structure in your organization, you’ll need to communicate your principles to the people working with you. Especially so if you are hiring new people. That’s a structure in and of itself. By communicating to people your values, principles, and aspiration, you are setting up your structural pillars, even if you didn’t think of them as such. And communicating your pillars to new team members is a fundamental activity in order to not fall into the status quo of hierarchical arrangements that can form themselves the bigger your organization becomes.

This is what Valve does with their open-source handbook, for example. Because of their shared leadership modus operandi, it is pivotal that they share with prospective—and current—team members how things are shaped internally at the company. Failing to do so corresponds to failing to communicate properly. That’s the kind of structure that helps keep a balance between order and chaos. The “chaos” of a shared leadership model and agile teams; the “order” of writing down in detail the key principles and customs at the company.

That’s where “Areas of Responsibility” and “General Operating Guidelines” come into play. I first got exposed to this concept by reading the book “The Great CEO Within” by Matt Mochary, around which I also developed a Notion template.

*Areas of Responsibility *are sections of your business—more detailed than departments—that allow you to bring your key business functions into “reality” by being clearly written down in a systematic fashion. For a “Marketing” department, your “Areas of Responsibility” may be content production and management, brand guidelines, product promotions, paid social media advertising. For each area of responsibility, there is at least one Direct Responsible Individual who is held accountable for the well functioning of that area. You can determine what “well functioning” means with your team when setting up your AORs (areas of responsibility).

For each AOR, there can be multiple General Operating Guidelines. These are documents displaying key processes, principles, and standard operating procedures at your organization. They are the source of truth on how/why to do something at your organization. If you hire a new team member and they have a question, the first place to look for an answer must be in your General Operating Guidelines system. Maybe your GOGs (general operating guidelines) merely consist of one document detailing the mission, vision, values, principles, and expectations of working at your organization. Or maybe it’s more detailed and it contains explanations of some key internal processes at your business. Either way works and depends on your culture and internal decision-making.

Because each AOR has a “direct responsible individual” (DRI), now the team member with a question/need for help can quickly gauge who is the most appropriate person to ask thanks to your AORs system detailing the key responsible individuals for each business area.

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And that is it for this week. This concept of AORs and GOGs—in my opinion—can be immensely valuable, especially for startups that are transitioning into the scale-up phase. When you scale, chaos may reign sovereign, and your hopes for an effective business may fade away. By detailing the key areas of responsibility and responsible individuals, you are not taking the freedom of creativity away from people. You are, in fact, establishing freedom of creativity by clearly defining the key jobs to be done at your organization, without telling anyone “how to get there”—unless you want to.