Corporate organisation structure can drive discipline and accountability at all levels in a business, underpinning consistency and adherence to set targets and ensuring rigorous project control.
Good structure allows:
- A clear delegation down of responsibilities; and
- Flow up to board reporting from more detailed divisional reporting that drives accountability
“Most businesses have structures that lag behind their strategy and have the net effect of slowing down progress against plan. Getting the structure right is like taking the hand brake off.”
The structure of a business will naturally evolve, starting from a family cluster (less than 12 people) and then an extended family. By the time it gets to 80 people it will be a tribe with multiple family clusters if left to its own devices.
To maintain cohesion, evolution needs to be replaced with proactive design to ensure it is fit for purpose. The scale-up phase is a great time to assess what organisation structure is required for the future and make a positive decision to change from the past, whether that is immediately or based on hitting specific milestones that trigger new requirements.
The attached toolkit includes a set of useful questions to interrogate whether your current organisation structure is appropriate for your business, plus a list of John Sutherland’s alternative organisation structures to the family grouping or default hierarchical approach. Within this list may be a structure that better suits your scaling business.
About the author
Steven has over 15 years of private equity experience gained both within private equity firms and as a senior executive of private equity backed companies. He joined Frog as CFO and Partner in charge of Portfolio in 2015. He represents Frog on the boards of Mediatonic, Scoota and Edited.