Who Should be on the Bus: A Shortcut to Getting There

June 4, 2020
7 Minutes
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In SaaS businesses, operating results are earned every single day; and good businesses are made, not found. Writing here about building organizations, learning from the experience, and appreciating the ride.

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It’s easy for leaders to get caught up in the day-to-day of running small-scale businesses. Particularly during challenging times, it can take all our energy just to “keep the wheels on the bus.” Unfortunately, a casualty of operating in this mode is that we tend to focus far less on the long-term composition of the team — who’s actually on the bus, whether they are in the right seats, and who should be getting on / off at upcoming stops. This is hardly surprising — such planning demands both discipline and foresight. It’s also difficult to get right: organizational design is quite complex, and according to research from McKinsey & Company, less than 25% of organizational redesigns succeed. With that in mind, this post can’t begin to scratch the surface on this rich topic. Rather, it simply introduces a quick-and-dirty exercise to help leaders elevate and think proactively about their organizational “bus” both now and in the future. What follows is a description of the exercise (the “What”), some tips around its execution (the “How”), and some observations about its effectiveness (the “Why”).

The What: The exercise is quite simple and builds upon something that virtually every organization already has available in some format — a current org chart. Using that as a starting point, the leader creates a series of hypothetical future org charts for the business. Specifically, (s)he creates four new / additional org charts, each representing successive six-month intervals into the future. This results in a total of five prospective org charts, essentially five snap-shots that look forward two years, six-month at a time. The five org charts are as follows:

  • Org Chart 1: Today / current-state (actual)
  • Org Chart 2: Today + 6 months (forecast)
  • Org Chart 3: Today + 12 months (forecast)
  • Org Chart 4: Today + 18 months (forecast)
  • Org Chart 5: Today + 24 months (forecast)

The How: This really is a simple exercise, so there is no need to overthink it. But a few pro-tips can’t hurt; and the following will help make the exercise even easier and more impactful:

  • Consistency = Key: This mental exercise is similar to any form of physical activity: doing it only once will likely just make you sore; but regular sessions build strength. Likewise, repeating this exercise every six months yields valuable insights. With each iteration, observe the changes over time and compare / contrast how your vision for a given point in time evolves. Also, like physical exercise, it helps to document performance and progress. Specifically, codify what is working (and not) from an organizational perspective each time you complete these semi-annual updates.
  • Outside-in Sequence: Start by producing today’s org-chart. Then complete the one that is two-years away (the furthest out). This should be pretty easy to do because it represents a relatively unconstrained ideal-state target at which to aim. You now have your “outside” bookends, and you can begin to fill-in the middle periods by going back and forth in six-month intervals. This approach helps avoid both cautious incrementalism (just building up from today) and wildly ambitious visioneering (just working backward from a future point in time). It also forces you to plan future moves that can be reasonably executed. The sequence looks like this:
    • 1. Today / current-state (outside #1)
    • 2. Today + 24 months (outside #2)
    • 3. Today + 6 months
    • 4. Today + 18 months
    • 5. Today + 12 months (the middle)
  • No Names: As hard as it can be, remove individuals’ names from this exercise. Don’t let existing team members influence your thinking; focus instead on aligning structure / roles / responsibilities to the company’s vision and strategy. This may seem to ignore the current reality and contradict Donald Rumsfeld’s famous quote, “You go to war with the army you have, not the army you might want or wish to have at a later time.” With all due respect to that sentiment, it’s equally important to shed unconscious biases when envisioning the army you wish to have in the future. Note: Please excuse this military metaphor; I generally avoid comparing business to war, but this seemed like a useful reference here.
  • No Vacuums: When undertaking this exercise, be sure that it is informed by context and data; and avoid simply drawing boxes on a blank page. Instead, reference long-range financial forecasts, consider market dynamics (how well does the company attract talent, what is the competitive labor market?), and align it with anticipated future operating priorities (product plans, envisioned client experience initiatives, internal systems requirements). This exercise must be interdependent with the rest of the business needs, not isolated from them — so don’t do it in a vacuum.

The Why: The primary benefit of this exercise is hopefully clear: it is a low-effort way for a leader to plan out with intention and purpose how an organization will grow over time. It works well because it doesn’t require any special skills, resources, or training; and it is something leaders can easily do on their own a couple times of year with a moderate amount of discipline in a short period of time. A few of the side-benefits, and why this exercise works in achieving them, are outlined below:

  • Highlight Inflection Points: One of the hardest thing for leaders of growth companies to identify and navigate are inflection points (when / where continuing to do what has historically worked for a business will no longer work going forward). There are no flashing lights to identify these points, and the tendency is to fail to recognize and overlook them until they have passed (too late). This exercise tends to serve as an early-warning system on an organizational level for when these points may be on the horizon.
  • Check Reporting Imbalances: For a number of reasons (such as: lean staffs, flat orgs, the tendency to promote from within) small companies often overload talented managers with too many direct reports. This undermines the effectiveness of those managers, and it can lead to their burn-out and eventual exit from the business. This exercise has a great way of shedding light of when managers’ span of control is growing unwieldy, and offering thoughtful leaders the opportunity to address in advance of a crisis.
  • Battle Re-org-mania: Research from that same McKinsey study, “suggests that many companies, these days, are in a near-permanent state of organizational flux.” As I and others can attest, never-ending re-orgs can be exhausting and counter-productive. This exercise serves as a check against a leader’s impulse to completely “turn over the table” when he / she doesn’t like how it is set. Instead, they are more inclined to get out in front of the need for total disruption by making planful changes based on the needs revealed by this exercise.

In closing, this exercise is largely about interdependency between the business outcomes and the people-related aspects of organizations. Leaders generally have a keen sense from a mission and financial perspective of where they want their businesses to be at various points in the future. What we tend to be less good at is identifying and aligning the roles and skillsets necessary to achieve those objectives. Yet, they are completely interdependent — the envisioned goals, and the difficult-to-define team / structure required reach them. This exercise aims to help navigate the organizational side of things. Hopefully, it can help leaders develop a far-seeing view of who should be “on the bus”…and provide everyone a much smoother ride toward the desired destination.

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