When a city doubles in size, the productivity per person increases by 15%. When a company doubles in size, the opposite happens.
Companies like Zappos see this as a fundamental problem to solve. For them, the root lies in organizational structure.
With the opportunity to be dispersed remotely and to build complex products without factories and production lines, the tech industry is particularly able to pursue innovative approaches to structure, management, and organization.
Increased self-management, remote working, and task forces instead of departments, are all emerging trends which lend themselves to growing businesses.
Elon Musk talks about his businesses innovating the production process as much as the product. Mark Zuckerberg describes Facebook’s structures and organization as its biggest asset.
Ethan Bernstein, Assistant Professor of Leadership in Organizational Behavior at Harvard Business School, adds:
…[O]rganizations who are increasingly thinking about structure as an advantage and a form of making their employees more productive, will continue to evolve and innovate in this direction. And that’s something I think we’ll see across all organizations, regardless of whether they are trying to deliver “wow” to customers, or trying to do something very different.
So what are the competing philosophies which are driving these trends within the industry? Which companies have implemented the most extreme reorganizations and how have they dealt with the changes?
In this article we’ll look at:
- Zappos: How they implemented Holacracy, with a why and how explanation.
- Buffer: The steps they took to prioritize the individual within the company over management structures, with the challenges they faced and the lessons they learned.
- Zapier: How they reflect these general shifts and why they chose not to dive in to extreme organizational innovation.
- Basecamp: The marriage of many competing philosophies documented through their company handbook.
- Process Street: The tool which helps you build the machine which builds the machine.