6♦️ The communication challenge: Why structure matters

One of the biggest challenges I think for people that grow their own business is transitioning from being the entrepreneur and behaving as an entrepreneur into being the professional manager and behaving as such. It's not an easy transition because the behaviours that make a successful startup entrepreneur are exactly the behaviours that don't work as you get larger.

As businesses grow, the complexity of communication and coordination increases exponentially. This can lead to inefficiencies, misunderstandings, and a breakdown in productivity.

Problem or challenge

Many business leaders, especially those with a startup background, resist introducing formal structures and management roles. They often view this as unnecessary overhead that can stifle innovation and creativity.

Complexities

The challenge lies in recognising that as your business scales, informal communication channels become unsustainable. The time and effort required for coordination can quickly overwhelm your team, hindering productivity and growth.

For startups, structure and management often seem like unnecessary overhead. They just want to get things done. But during growth this approach becomes unsustainable.

Why? It's all about communication channels. With just one person, there's no need for communication. Two people? A few minutes a week. Three people? Let’s say thirty minutes. But as you add more people, the number of communication channels grows exponentially. By the time you have seven people, you're spending four hours a week coordinating. And at twenty-five people? It's over fifty hours. That's more than a full workweek!

Solution

So, to grow beyond a certain point, you need to introduce managers. It's not a choice. It’s essential to keep the company running smoothly and avoid communication breakdowns. You have to accept that it's part of scaling your business.

To effectively scale a business, it is essential to implement a structure that supports communication, collaboration, and decision-making. Here are some key steps:

1. Define roles and responsibilities: Clearly outline the roles and responsibilities of each team member to ensure everyone knows their expectations.

2. Establish communication channels: Create formal channels for communication, such as regular team meetings and project updates.

3. Implement decision-making processes: Establish clear guidelines for making decisions to avoid bottlenecks and confusion.

4. Provide training and support: Offer training and support to help employees adapt to new structures and processes.

5. Monitor and adjust: Regularly review and adjust your organisational structure to ensure it remains effective as your business grows.

Benefits

By implementing a well-structured organisation, you can:

• Improve communication: Reduce misunderstandings and increase efficiency.

• Enhance collaboration: Foster teamwork and cooperation among employees.

• Enable scalability: Create a foundation for continued growth and success.

• Improve decision-making: Make more informed and timely decisions.

• Increase employee satisfaction: Provide employees with clear expectations and support.

Why it works

A well-structured organisation provides a framework for effective communication, collaboration, and decision-making. By investing in structure, you can create a more efficient and productive business that is better equipped to scale and succeed.

Measurement

The effectiveness of your organisational structure can be measured by:

• Improved communication: Monitor the frequency and clarity of communication within your team.

• Increased productivity: Track changes in output and efficiency.

• Reduced conflict: Observe the level of conflict and disagreement among employees.

• Employee satisfaction: Conduct surveys or one-on-one meetings to gauge employee morale and engagement.

• Business growth: Evaluate your company's growth and profitability over time.

My story

I’ve come across this challenge so often. Both working with business leaders and as one myself. I’ve known so many great entrepreneurial startup business leaders that hate structure, systems and processes - what they call bureaucracy - and resist it strongly.  Probably because it’s the reason they started their business in the first place. But without those things in place, things are uncoordinated and inconsistent and the business plateaus. Which was the opportunity for me really. Most of my own leadership roles were me, as a professional manager with an entrepreneurial instinct reinvigorating growth by putting in place the professional disciplines needed to move beyond the plateau.