Organizational Structure and Design

Scaling from 50 to 100 employees almost killed our company. Until we discovered a simple org structure that unlocked $100M+ in annual revenue. In my 10+ years of experience as a founder, one of the biggest challenges I faced in scaling was bridging the organizational gap between startup and enterprise. We hit that wall at around 100~ employees. What worked beautifully with a small team suddenly became our biggest obstacle to growth. The problem was our functional org structure: Engineers reporting to engineering, product to product, business to business. This created a complex dependency web: • Planning took weeks • No clear ownership  • Business threw Jira tickets over the fence and prayed for them to get completed • Engineers didn’t understand priorities and worked on problems that didn’t align with customer needs That was when I studied Amazon's Single-Threaded Owner (STO) model, in which dedicated GMs run independent business units with their own cross-functional teams and manage P&L It looked great for Amazon's scale but felt impossible for growing companies like ours. These 2 critical barriers made it impractical for our scale: 1. Engineering Squad Requirements: True STO demands complete engineering teams (including managers) reporting to a single owner. At our size, we couldn't justify full engineering squads for each business unit. To make it work, we would have to quadruple our engineering headcount. 2. P&L Owner Complexity: STO leaders need unicorn-level skills: deep business acumen and P&L management experience. Not only are these leaders rare and expensive, but requiring all these skills in one person would have limited our talent pool and slowed our ability to launch new initiatives. What we needed was a model that captured STO's focus and accountability but worked for our size and growth needs. That's when we created Mission-Aligned Teams (MATs), a hybrid model that changed our execution (for good) Key principles: • Each team owns a specific mission (e.g., improving customer service, optimizing payment flow) • Teams are cross-functional and self-sufficient,  • Leaders can be anyone (engineer, PM, marketer) who's good at execution • People still report functionally for career development • Leaders focus on execution, not people management The results exceeded our highest expectations: New MAT leads launched new products, each generating $5-10M in revenue within a year with under 10 person teams. Planning became streamlined. Ownership became clear. But it's NOT for everyone (like STO wasn’t for us) If you're under 50 people, the overhead probably isn't worth it. If you're Amazon-scale, pure STO might be better. MAT works best in the messy middle: when you're too big for everyone to be in one room but too small for a full enterprise structure. image courtesy of Manu Cornet ------ If you liked this, follow me Henry Shi as I share insights from my journey of building and scaling a  $1B/year business.

Each unnecessary leadership layer slows data team delivery and makes it less innovative. Most have 1 leader for every 3-5 ICs, and that’s way too bloated. The ideal ratio of leaders to ICs is 7-10 ICs to 1 leader. Here’s how that translates to an organizational structure. A team of 10-12 ICs needs a manager. If the team has more junior or mid-level ICs, it may be 7 ICs to a manager until the team matures. Managers are people leaders first and technical leaders second. First-time managers must have a leadership mentor at the director or VP level, even if they don’t directly report to them. 3-5 managers require a director or VP. They lead other leaders and own part of the data and AI strategy implementation, which requires more effort. Directors are in training to become leaders of other leaders and need close support. VPs are experienced leaders of leaders who are in training to implement strategy. The director or VP reports to the C-level leader. The first or interim CDO/CAIO/CDAO manages the transformation from early maturity stages to a data team that delivers over 25% of new revenue growth and cost savings. The VP is trained to assume the C-level role and manage the last mile of AI strategy implementation, leading the data team to deliver over 50% of new revenue growth and cost savings. They continue developing the team to meet new business needs and optimize delivery. Most data teams decentralize and become part of the business units and product teams they support. I teach data organizational structure and maturity progression in my AI Strategist and Data Organizational Leadership courses. Use the link under my name to drop the org chart’s muffin top. #DataScience #DataEngineering #Leadership

Some orgs like climbing ladders. Others prefer breaking them down. Let’s talk about how that impacts your people strategy. 🏛 𝗛𝗶𝗲𝗿𝗮𝗿𝗰𝗵𝗶𝗰𝗮𝗹 𝗦𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲 Think layers. CEO at the top. Everyone reports up the chain. There’s clarity in roles. Career paths feel structured and predictable. But it can be slow. Approvals take time. Ideas might get lost before they reach the top. And promotions often rely more on time served than actual impact. 👥 𝗙𝗹𝗮𝘁 𝗦𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲 Think fewer layers. More autonomy. Faster communication. Employees can have direct access to leaders. Ideas move quicker from brainstorm to execution. But it can feel chaotic. Who’s responsible for what? Career growth isn’t always clear. And without structure, voices can still get drowned out—just in a different way. So, which one is more inclusive? It depends. In hierarchies, leadership often comes with formal barriers. Especially in male-dominated industries. Women may have to work harder to be seen/supported. In flat structures, the playing field seems more even. Everyone has a voice. But without clear ladders, career progression can be hard to track. 🔄 𝗪𝗵𝗮𝘁’𝘀 𝗵𝗮𝗽𝗽𝗲𝗻𝗶𝗻𝗴 𝗻𝗼𝘄? Companies are getting creative. Combining structure with flexibility. Clear roles, but fewer layers. Defined expectations, but more cross-functional work. HR teams are leading this shift. Rebuilding org charts. Creating growth paths that are equitable. Encouraging collaboration without chaos. So, what should you look for in your company? → Defined roles and responsibilities → Clear advancement paths → A structure that supports inclusion, not just control 📌 Whether you're building a team or climbing the ladder yourself, structure can either support you or slow you down. Which model does your company lean toward? And is it helping or holding people back? Let's talk about it in the comments. ♻️ I appreciate 𝘦𝘷𝘦𝘳𝘺 repost. 𝗪𝗮𝗻𝘁 𝗺𝗼𝗿𝗲 𝗛𝗥 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀? Click the "𝗩𝗶𝗲𝘄 𝗺𝘆 𝗡𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿" link below my name for weekly tips to elevate your career! #Adamshr #Hrprofessionals #humanresources #HR #theinsider   #hrcommunity Adams HR Consulting Stephanie Adams, SPHR

As an advisor to tech scaleups, and a former CTO and SVP of Engineering,  I've often encountered a familiar CEO complaint: "Our engineering team is too slow!" However, focusing solely on increasing individual productivity is rarely the solution. Sometimes the answer is changing the organizational structure. 🔍 The Issue with Flat Structures: Time to market was a major problem in a scale-up I advised, even though they had a flat structure where 40+ engineers reported directly to the VP of engineering and all of them shared equal accountability to the delivery of the software. 🚧 The Consequences: Major overcommitment.  People raised their hands to take on work even if the group was super extended. There was nobody that fully understood the team’s capacity vs the actual workload they took on. This approach led to a lack of predictability, chronic delays, unhappy customers, and ultimately, a tarnished reputation. 🛠️ The Solution: Transitioning to a hierarchical structure with focused teams and accountable experienced leaders was the game-changer. This shift brought in clarity, accountability, and much-needed structure. 📈 The Results: Predictable schedules, improved customer satisfaction, and a thriving engineering culture. ✅ Takeaways for Your Organization: Examine your organization with critical eyes: Is your ownership and accountability structure clear? Are your teams sized and focused appropriately? Do your leaders have the authority to deliver effectively? For more on the case study and about building a sustainable, efficient, and customer-centric engineering team in the blog post. 💭 I'm curious to hear your thoughts: Have you faced similar challenges? How did you address them? Let's share insights and grow together! #EngineeringManagement #Leadership #Productivity  _______________ ➡️ I am Talila Millman, a fractional CTO,  a management advisor, and a leadership coach. I help CEOs and their C-suite grow profit and scale through optimal Product portfolio and an operating system for Product Management and Engineering excellence.  📘 My book The TRIUMPH Framework: 7 Steps to Leading Organizational Transformation will be published in Spring 2024 https://lnkd.in/eVYGkz-e

Companies wanting to scale hit the glass ceiling because of one mistake: not constantly reevaluating the company's organizational structure. This is how we think about org design at FERMÀT. In today's Whiteboard Wednesday, I dive into how org structure will keep your company's goals on track and solve the right problems. When considering org design, focus on these 3 principles: 1️⃣ Org lines should follow communication lines 2️⃣ Question why things should be unchanged, not just why they should 3️⃣ Identify which "fires" are acceptable to let burn Take a common question in DTC for example: Where should growth sit? It could be under a VP of Growth, E-commerce, or the CMO. So how do you decide? Follow the above principles. 1️⃣ What are the critical communication lines? Place the role depending on your primary goal i.e. driving e-commerce revenue, aligning marketing efforts, or treating it as its own entity. 2️⃣ Why should we maintain the current structure? An org change's opportunity cost is understated. My advice: See which problem current communication lines solve as is, then determine if that's a high priority problem. If change is needed, it'll make it easier for your team to digest. 3️⃣ What "fires" are acceptable to let burn? Let's say you decide to have your growth person report to the CMO rather than e-commerce, and total revenue goes up. The fire you let burn = less revenue from e-commerce alone, because total revenue is going up. --- Remember, org design impacts both SaaS and traditional businesses. The key is a structure aligned with your evolving priorities and communication needs.

Is Your Org Chart Quietly Costing You Millions? Many companies unknowingly bleed labor dollars because their org design lacks clear rules. Job titles get inflated, layers multiply, and suddenly payroll is top-heavy without adding business value. The fix? Disciplined organizational design. Done right, it keeps labor costs aligned to work performed while still creating career growth opportunities. Here are 10 rules every leadership team should enforce: 1 - Higher Workload Does Not Equal a Higher Job Level. Doubling volume of the same work doesn’t justify a promotion for an employee. Having a higher workload means you hire another employee at the same level as your current employee. A higher-level job requires greater complexity, increased know-how, tougher problem solving, and higher accountability. 2 - Span of Control. Leaders should oversee 6 or more direct reports. Fewer than that and you’re paying for management that doesn’t scale. (I know many of you have a 3 or more direct report rule, but that is a low threshold.) 3 - Director Level. A Director should run 2 or more distinct functions or teams and not just a small, siloed group. 4 - VP Level. A VP should manage multiple Directors and drive function-level strategy, not operate as a “senior director.” Senior Director roles should be used rarely and only as a step toward a VP for a high potential employee. 5 - Managerial Layers. Do you have more than 5 layers between the front-line employees and the CEO? That’s bureaucracy, not agility. 6 - Team Size Alignment. Teams under 5 employees usually don’t need a dedicated manager. 7 – Job Title Inflation. “Senior” or “Lead” should mean broader scope or accountability, not just a retention play. 8 - Function Size vs. Leadership Level. A function with fewer than 10 total employees rarely justifies a Director role. 9 - Executive Titles. The C-suite is for leaders with enterprise-wide accountability, not just one team or project. 10- Annual Org Design Health Check. Audit spans and layers every year. If you don’t, growth creep will quietly add unnecessary cost. When leaders hold the line on these principles, organizations stay lean, cost-effective, and strategically aligned. Ignore them, and payroll becomes a silent tax on agility. Organizational design is not HR housekeeping. It is a core financial discipline and should be something C-suite leaders review and control. Example: The HR/Compensation team doesn’t do a job evaluation until a C-suite leader approves the business case for the job and changes it makes to org structure. If you’re serious about keeping labor costs aligned with value, start treating org design like a board-level discussion and not just an HR exercise. What rules do your leadership team follow to keep your org structure lean and effective? #OrganizationalDesign #FutureOfWork #Leadership #Compensation #LaborCost #CompensationConsultant #WorldatWork #SHRM #TotalRewards #WorkforceStrategy #BusinessPerformance

Let's be honest: extensive cross-team coordination is often a symptom of a larger problem, not an inevitable challenge that needs solving. When teams spend more time in alignment than on building, it's time to reconsider your organizational design. Conway's Law tells us that our systems inevitably mirror our communication structures. When I see teams drowning in coordination overhead, I look at these structural factors: - Team boundaries that cut across frequent workflows: If a single user journey requires six different teams to coordinate, your org structure might be optimized for technical specialization at the expense of delivery flow. - Mismatched team autonomy and system architecture: Microservices architecture with monolithic teams (or vice versa) creates natural friction points that no amount of coordination rituals can fully resolve. - Implicit dependencies that become visible too late: Teams discover they're blocking each other only during integration, indicating boundaries were drawn without understanding the full system dynamics. Rather than adding more coordination mechanisms, consider these structural approaches: - Domain-oriented teams over technology-oriented teams: Align team boundaries with business domains rather than technical layers to reduce cross-team handoffs. - Team topologies that acknowledge different types of teams: Platform teams, enabling teams, stream-aligned teams, and complicated subsystem teams each have different alignment needs. - Deliberate discovery of dependencies: Map the invisible structures in your organization before drawing team boundaries, not after. Dependencies are inevitable and systems are increasingly interconnected, so some cross-team alignment will always be necessary. When structural changes aren't immediately possible, here's what I've learned works to keep things on the right track: 1️⃣ Shared mental models matter more than shared documentation. When teams understand not just what other teams are building, but why and how it fits into the bigger picture, collaboration becomes fluid rather than forced. 2️⃣ Interface-first development creates clear contracts between systems, allowing teams to work autonomously while maintaining confidence in integration. 3️⃣ Regular alignment rituals prevent drift. Monthly tech radar sessions, quarterly architecture reviews, and cross-team demonstrations create the rhythm of alignment. 4️⃣ Technical decisions need business context. When engineers understand user and business outcomes, they make better architectural choices that transcend team boundaries. 5️⃣ Optimize for psychological safety across teams. The ability to raise concerns outside your immediate team hierarchy is what prevents organizational blind spots. The best engineering leaders recognize that excessive coordination is a tax on productivity. You can work to improve coordination, or you can work to reduce the need for coordination in the first place.

Every time you draw an org chart, you're picking sides in battles that haven't started yet. That's just human wiring. Social identity theory shows people quickly form in-groups and out-groups, even on trivial distinctions. Any structure you choose will naturally create "us vs. them" dynamics. Without intentional design, you get the classic blame cycles: Sales says Marketing sends bad leads, Marketing says Sales doesn't follow up, and Engineering blames both teams for changing requirements mid-sprint. But you can architect your organization so those tribal instincts work for you instead of against you. Here's how: Design for the Work --------------------- ↳ Organize around the work. Map how value flows to the customer and align teams to that flow. Don't organize around internal convenience—and definitely don't design around specific people. Organize around the critical path from idea to customer value. ↳ Clarify decision authority. Ambiguity breeds conflict and delays. Be explicit about who decides, who's consulted, and who's informed. Unclear authority creates either turf wars or decision paralysis. ↳ Define cross-team handoffs. Wherever work passes between groups, nail down who owns what, what "done" looks like, and how problems get escalated. The real risk isn't within teams; it's in the transitions between them. Align the Incentives --------------------- ↳ Set common goals. Give cross-functional groups a small set of shared outcomes—revenue growth, customer retention, cost savings or any other collectively important target. Use cascading goals and KPI trees to show how individual work connects to the bigger picture. This keeps everyone pointed in the same direction instead of optimizing their own corner. ↳ Align rewards with cooperation. If bonuses are based only on silo performance, you'll get silo behavior. Shared metrics and joint outcomes encourage people to actually help each other succeed. Enable the Collaboration -------------------------- ↳ Support cross-functional work. Make sure teams have the data, tools, and forums needed to work together effectively. If those supports aren't intentional, collaboration erodes under daily pressures and competing priorities. You can't eliminate tribal instincts; they're hardwired. But you can architect your organization so those instincts work for you instead of against you. You probably can’t eliminate "us vs. them" entirely. But you can design so the structure channels natural group dynamics toward shared execution. #strategy #execution #orgdesign #teamwork

A lot of times managers plan projects around people: “I have to accomplish X, Y, Z, I need eight folks to make it happen, then we can figure out how to structure workflow and deliver on the strategy.” I take the inverse approach - Strategy + Structure + People. I prefer to begin with strategy because it’s hard to gather the right team, get aligned, and stay on track without knowing where you’re going and how you might get there. What's the business, and what do we need to achieve those goals? How do we think about the process, and road to getting there? From there, consider what structure will best support that strategy. Factor in timing, budget, and chain of command. And then people. Who do we have available? What skills, background and experience are the best fit to execute this mission? Saving this element for last helps us to align with larger strategic goals and place team members in roles that best support those efforts. As a leader & manager, it provides the opportunity to maximize people’s strengths. A lot of people may be hard workers with great ideas, but not suited for the type of work, or results you’re aiming to achieve. This approach is a win-win-win for the employee, company, and leader.

One of the most important lessons I’ve learned as a leader is that when it comes to building a team, the sequence matters. It can feel counterintuitive. Especially if you genuinely care about your people. But the best thing you can do for your team is to start with the business strategy, then define the structure and only then plug in the people. Strategy → Structure → People It’s not cold. It’s clear. And when applied with care, it creates the conditions for stability, focus, and growth. I have found that when you lead with structure grounded in a clear strategy you give people something that’s more valuable than a vague promise of support. You give them clarity. Clarity about what their role is designed to do. How it ladders up to top-level goals. How it fits alongside other roles in the team. Where it begins, where it ends and where it can evolve. This kind of clarity doesn’t just drive performance. It protects people from unnecessary disruption when priorities shift, because the structure isn’t built around personalities, it’s built around purpose. Of course, structure alone doesn’t create a healthy team. It’s just the scaffolding. The real work starts when you match people to roles that let them do work they’re good at and that fuels them. Those don’t always align. Asking someone to stay in a role where they’re excelling but feel drained rarely ends well. Burnout doesn’t show up with a big red flag. It shows up as disengagement, second-guessing and silence. That’s why I believe my job as a leader isn’t just to design the structure. It’s to maintain it. To revisit it regularly. To listen, adjust, evolve. Because the only thing constant is change and I’d rather evolve from a position of strength than be forced into reactive pivots that cost us trust, momentum and clarity. And for any of this to work, the team has to trust me. That’s not something I can mandate. It’s something I have to earn, every day, through transparency, follow-through and creating the kind of psychological safety where people can speak up, take risks and grow. This is how I think about org design. Not as a one-and-done exercise in spreadsheets. But as an ongoing commitment to creating the conditions where good people can do great work and feel good doing it.