The (Scary) Thing With Org Charts…

Four reasons they are hated, and why it’s never the document that’s the problem

I once worked in a large organization that refused to document and publish an org chart. 

There was a massive amount of confusion internally – who does what? – and that chaos was compounded by the fact that our CEO hated org charts. Publishing one was off the table.

I also once worked in an organization who cherished their prized org chart. When it changed, it was the talk of the town! 

In both of these cases, the org chart (or lack thereof) was not the problem. It was the culture. 

Org charts – the document-of-record that outlines who reports into whom at a company – stir up lots of feelings. They have a reputation as unnecessarily bureaucratic, fixed, antithetical to startup culture, and political. 

Because of this, I’ve seen startup leaders back themselves into a corner, believing they can get away with simply not having one. This is a mistake.

The Concerns

Let’s talk about what is scary about org charts, and what questions exist below the discomfort.

I’ve found that there are a few common reasons why startup founders bristle when you bring up the idea of an org chart:

1. They feel bureaucratic

Many org structure documents connote a “chain of command” and can feel very stifling. They also evoke a certain decorum that can feel dangerous.

Who needs to “approve” my thing? Am I allowed to talk to John, or do I need to talk to his manager first? If I talk to John’s manager, is that considered an escalation? If I have a good idea and go to my VP, is that going over my manager’s head?

From what I can tell, the core fear at play here is, the hierarchy, and its implied approval loops, will kill speed, experimentation and divergence. 

Instead of worrying about “the machine” and its impact on your culture, ask yourself:

Is it crystal clear who is directly responsible for our most mission-critical efforts? Does this person have the decision rights, resources and support needed to be successful?

2. They feel fixed

Every leadership team I’ve ever worked with (or on) has had gaps. It’s the nature of teams – they are fluid – and in the formative years of building something, you’ll be a long way from “perfect.”

This reality can make documenting your org feel like a step too far, and can trigger thoughts like:

• Can’t we get things dialed in a bit further before we commit this to paper? 

• Will this mislead Jason into thinking he’s the head of product? What happens when we hire Melissa as his boss?

• Eek, now that this is on paper, it reminds me that I really need to talk to my co-founder about his role … 

For many CEOs of young and scaling companies, this triggers another fear: am I locking in something that is fundamentally broken?

If this fear is coming up for you, consider asking yourself:

Am I prioritizing hard conversations, or avoiding them? Am I as focused as I should be on finding and closing the talent we need?

3. They create politics

There is this misconception that I’ve heard that org charts create politics. That the very presence of a leadership structure creates land-grabbing, power plays and prevents the right ideas from gaining traction.

This tends to lead founder CEOs into the belief that hierarchy is bad, and it’s best to be flat. 

Well, I’m here to tell you two things on this:

1. Whether you have it written on paper or not, you have a hierarchy. There already exists a small group of people, either formally or informally, who tend to influence the most critical company decisions. 

2. The leaders you hire – and how you engage them – will have more to do with how political the environment becomes than any org document.

If the above resonates, consider asking yourself: 

Am I being fair and consistent with how I engage my leadership team and make decisions? Am I hiring leaders that will advocate for the best ideas, regardless of source?

4. They feel antithetical to the startup ethos

If you’re drawn to startups for freedom, ownership and speed – the feeling of being placed in a box, under or over someone, just doesn’t feel right.

Especially in crypto/web3, where decentralization is core to the ethos of the space, the conflict is even more acute – how can we run our internal organization in a way that is inconsistent with the values we set for our external community? 

If this is a concern, consider asking yourself:

Are our values known, understood and reinforced internally? Do we operate in a manner that is consistent with our values?

The Cost of Not Having One

You may have figured it out by now, but this article is not about org charts :)

It’s about the unaddressed people, culture and operational issues that get projected onto one.

But when you decide you’d rather avoid those issues than face them, and worse — when you opt to obscure them — you create more problems for your teams:

Lack of Transparency 

For better or for worse, organizational charts provide a map of the terrain that guides organizational practices, like reporting. Absent this map, and especially once a team grows to a certain size (above 30), communication doesn’t just happen. It takes intentionality – an org chart is one way to identify who needs to speak to whom.

Where there is a lack of transparency, you’ll very typically find…

Politics 

Yep, that thing you were trying to avoid is now a problem. It tends to be out of survival that these things emerge: because there isn’t a formal and transparent organizational structure, information is not shared symmetrically and because of that, information becomes currency. Being “in the room” becomes evermore valuable and you’ll find managers forming alliances to get their decisions made and work done.

Those who “play the game” progress, and those who don’t tend to develop… 

Learned Helplessness

Without a sense of transparency or fairness, teams start to lose their sense of ownership. This starts with sluggish decision-making and can turn into a full-blown sense of helplessness, if left unchecked. Sentiments like “why even bother?” creep in and are hard to shake.

Now, before you all jump to a new tab to start updating your org charts – here is your takeaway:

Be explicit with decision rights and consistent with info-sharing. 

That is 80% of the battle.