The Old Type of Organization Will Die

Why yes, that is my mirrored handwriting.

In the modern, networked society it's nothing short of a miracle that some traditional organizations make ends meet. However, in the longer term every inefficient organization will have to come to grips with the new world and adapt to the surroundings. That or face the consequences.

This post has a personal grounding to our organization at Grow VC. During the 2011 winter holidays we've spent time planning for the longer term and steering the direction of the ship so to speak. I've had an inkling that I wanted to bring forth in our discussion and it's become the topic of a larger discussion since then. This inkling is namely that in roughly a years time, at the end of 2012, the Grow VC team will have grown to over 100 individuals.

Why Not Make It a Thousand?
Delving into this subject of scaling the organization, our CEO retorted with a larger number. Why couldn't we instead be over a thousand in the organization after a year? After the intial shock and a few missed heartbeats, it all made sense. Most, if not all great long term organizations have over 1000 people.

Why did he ask me that? The reasoning is quite simple. If we think we can't – we never will. And if we don't believe it's possible, then we're in the wrong place.

We've gone through the path of scaling the organization and responsibilities, benchmarking and attracting the most brilliant people to our team and we've successfully passed 50 individuals (who we are immensely proud of might I add). How do you grow an organization from the initial team to fifty? Well, just make sure you recruit the best and the rest will follow. At least to a large extent. Fifty is a big number, but it's one that you can still handle by pulling the strings yourself. A thousand (1 0 0 0) on the other hand, you will need a separate recipe for.

No One Has a Clue
Scaling the organization past fifty individuals requires a different approach. I'm confident we as an organization can do it, that's not the issue. We've got heaps and heaps of confidence. How it will look, that's a completely different topic all together. In attempting to create an efficient, purposeful organization also past the first 100 people, we've looked at making it scalable in building value. We as an organization take scaling very seriously.

In developing any organization past a certain number, it becomes clear that no one has a clue. Sure all MBA books are filled ten dollar words on strategic management and how to guide a large organization. But can you really guide an organization of hundreds or over a thousand individuals? Look at how large organizations function, look at how much efficient time individuals have each day. We've approached this dilemma differently. We want to make it work.

Interconnected Teams
Interconnected teams for an efficiently scaled startup. With our global operations on six continents, it's been important for us to have local people. For us this means people with real ownership, incentives and autonomy to make things happen – you know, entrepreneurs. Teams in this context are nothing but a collection of people, with the before mentioned attributes, who have a set goal, ultimately that is to build value in the organization. Teams mean local teams, task specific teams (e.g. development, UX etc) and functional teams (e.g. the dreaded 'management').

These teams are interconnected and they need to communicate amongst themselves, that is the interconnected part. They should be able to function autonomously, but they should also be able to leverage and learn from one another. The primary links should be between the teams themselves and the secondary links are to 'management'. The primary purpose of 'management' itself should be to provide the targets, metrics, priorities and support when needed in achieving the targets. But maybe most importantly, to get out of the way. Easier said than done, but what is the alternative? The pyramid? No thank you.

Guidelines - no Excuses
Brilliant people. Documented and proven processes that are constantly developed. Measured targets. The right culture.

This is more or less our recipe and so far we're sticking to it. With efficiency and purpose always in mind, everyone is required to build tangible value and get things done. If something doesn't work, fix it. If it does, improve it. It's all about purpose in a team like this and if you dont share the purpose, you aren't part of the team.

At the end of the day it's been a delight working with our driven team up to this point and I look forward to all the people that we add on to this journey of globally developing equity crowdfunding. And in our market there are figuratively over 7 billion people and we will find the most brilliant hundred or thousand or whatever may be the number. We've already gone through over 1500 applications and the pace keeps increasing. We will find all the right people, it's just a matter of time.

Clearly we at Grow VC are still the exception in terms of how organizations look and we will continue to push the envelope for a good many years. But how long are you willing to bet that the other approach still works? Or is it just a question of a process that no one has thought to question?

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This is an edited version of an post originally posted at the Grow VC Blog, by Markus Lampinen. You are free to re-edit and repost this in your own blog or other use under Creative Commons Attribution 3.0 License terms, by giving credit with a link to www.startupcommons.org and the original post.