Why scaling a flat startup could lead to a dysfunctional organization?

In the starting-up phase, a #startup has no option but to be highly judicious in how it utilizes its resources. It deosn’t have enough money, so it can’t throw people at the problem, so each individual must be able to contribute well outside the sharp and narrow boundaries of a traditional job description. Also, the social distance between the team members is often very small, thus there is no need to introduce management layers. So, a flat hierarchy is but natural, for anything else will only distract the startup from its core purpose. But when it grows up, process inefficiencies and management overheads accumulate naturally. If it is successful by any standards, it will have more work to do, it will need more methodical approach to problem-solving, its customers will expect predictability, etc. In most cases, while growing up, a startup risks losing that #agility which was its boon in the first place, and resulting organization structure becomes its bane, if not its nemesis. A key challenge is how to scale-up successfully?

While this article can hardly be called as a good research or even practice-based article, and does a very shallow analysis of what makes scaling of a flat organization successful, it nevertheless brings out a very critical point — when we move from pyramid organizations to pancake organizations (i.e. flat #hierarchies), it isn’t very obvious how to scaleup. The fractal pattern at lowest level works well, but the moment we start growing the organization, we eventually end up adding layers of hierarchy around it, and stand to lose the very attributes that made it successful originally. Some of the ideas in this article are interesting, though most are rehash of what we know from #agile and #selforganing #teams and organizations.

https://hbr.org/2021/06/how-to-successfully-scale-a-flat-organization