Built to pivot, not to scale

 My last post, written as a partial review of the book Powered by Projects, considered the idea of organizing around projects rather than traditional hierarchical structures.  You are welcome to review that post if you are interested.  There are some really interesting ideas about organizing around projects, and the author goes to great lengths to describe how important it is, if you are organizing around projects, to be more agile, flexible, nimble, responsive, and... you get the picture.

Today, as the title of my blog post suggests, I am going to talk about building a company, and the considerations we need for a modern organization.  In the past, we would talk about building a company, thinking about the headquarters or a location, a physical office.  We'd talk about hiring people in specific roles and functions.  We'd organize for manufacturing or distribution, hash out a business model.  Eventually, we'd have an organizational structure, a physical office, a set of ramshackle but reasonably effective business processes which over time we'd enable with information systems and protect with cybersecurity. All of this was necessary infrastructure, and was valuable, until it wasn't.

And, for what we faced in the past, this approach was meaningful.  But, in the current climate, I am reminded of many wiser heads have said about going into an activity.  Some things are easy to get into, but may be more difficult to get out of.  Or, put another way, all of the processes, systems and structures that we build to scale an organization could become the barrier to pivoting when pivots become paramount.  I think we are entering a time where pivoting may be as important as scaling.

Thus the title, brick by brick.  Brick by brick is the way a mason builds a wall, and as long as the mortar is damp, it is easy to rework the course of bricks to reshape the wall.  But, once the mortar is hardened, the only way to rework the wall is to tear it down and build it again in a different course or shape.  Note that it may be the case that the original course of bricks was correct, for its time and purpose, but later the needs changed.  We, in business, do the same things, building brick by brick, when we define and harden processes, rules, policies, and reinforce those processes with systems and finally harden everything with culture and reward structures. Eventually, these operations become hardened because every bureaucracy defends itself.  Quietly, blind spots emerge and the argument - we've always done it this way - creeps in.  Once these are in place, and the employees have experience living in and with the existing structures and have been stymied attempting to work around the structures, living within becomes a learned experience.  

Let me say here that as a systems engineer and a person who has written and deployed enterprise systems, the modern organization cannot function without defined processes or systems, but we need to ask in each case - if we get in, can we get out or change when necessary?  Hardening this process or system will create more efficiency and cut costs, but does it block us from future pivots or change?  Are there ways we can remain nimble, flexible, adaptive and still operate somewhat efficiently?

Today, as demonstrated by many startups and smaller companies, you don't need a large staff to scale up, you certainly don't need a physical location, and org charts can be more flexible and dynamic.  Software and data-based companies are much simpler to pivot than firms that actually manufacture things. It's simpler to pivot a virtual company than a physical company. What blocks nimbleness and change are the processes, computer systems, reward structures and learned behaviors of your teams.

With this in mind, perhaps one of the most important skills within a company is change management.  If we assume that companies will be in some constant state of change, at least in a functional or process level if not at the corporate level, then being good at change and change management should be a core capability.  Another skill that will be required is to build and deploy flexible, adaptable computer systems that support the business, but which are adaptable to changes in the environment.  The systems themselves aren't as important as the data they generate and the insights they provide.

So, are you building yesterday's company, brick by brick, walling yourself in to inflexibility and frustration?  Or are you thinking about how to get into an opportunity, grow and scale while remaining flexible?  We may need to be a little less efficient and a little more adaptable in the next decade as trends like the adoption of AI, shifts in global business and other factors emerge. Sure, build your company to be scalable, but balance efficiency and structure with flexibility and adaptability, which may cost you a little in efficiency but provide the ability to pivot you are likely to need in the future.