I have sat in a lot of leadership meetings where a hard problem was raised, and within about four minutes somebody proposed a reorganization.
It is worth being sympathetic about why. Structure is the only lever most executives can see clearly. It is legible, it can be drawn on a whiteboard, and moving it feels like doing something. Culture, strategy and talent are slower, harder to picture, and much harder to claim credit for.
But structure is almost never where the constraint lives. It is where the constraint becomes visible.
Healthy organizations are built on the idea that strategy, structure, talent and culture are interdependent. You cannot understand one without reference to the others, and the whole behaves differently from the sum of the parts. Culture sits in the middle of that, acting as both catalyst and brake on how well every other part functions.
Three questions get at whether those parts are reinforcing each other or quietly working against each other. None of them is about the org chart.
One. Are you creating the conditions for intrapreneurial leaders?
The most expensive thing a growing company can get wrong is its employee value proposition, and the tell is not turnover. It is who applies.
Companies in the $5–25M band face the sharpest version. They compete for senior people against businesses with more money and more certainty, and the only durable advantage available is that the work is more interesting and the people are more trusted. Organizations without a clear purpose pay for its absence in acquisition cost, in turnover, and in a slow degradation of who they can attract.
The greatest threat to innovation is not a lack of ideas. It is a culture that disempowers the people who have them.
Whatever you think of Netflix’s culture, the premise underneath it is worth stealing: an organization’s job is to remind people they walked in the door with power, then create the conditions in which they can use it.
So the practical question is not “what are our values.” Every company has a values page. It is what does this organization actually reward? Look at who was promoted last year and why. Look at what gets celebrated at an all-hands. Look at what happens to somebody who runs a good experiment that fails. Those answers are your real values, and where they diverge from the ones on the wall, the ones on the wall are decoration.
Alignment is what makes autonomy possible. Without it, autonomy is just people moving in different directions at speed.
Two. Do your processes stretch your culture open, or hold it closed?
There is a distinction I keep returning to. It is cruder than reality and useful anyway.
“WE” cultures invite diverse perspectives and operate with a community mindset. Anyone can own an initiative. A champion gets leadership support, assembles the right people, runs the experiment, shares what was learned.
“ME” cultures produce a great deal of conversation about ownership. Solutions arrive before problems are understood. Structure becomes more important than process. Underneath it, reliably, is mistrust.
A ME culture is usually a symptom of an organization that over-invested in structure as its primary tool. People worry about roles, boundaries and stepping on toes. Will the process be fair? How will we know which idea was best? What if I am not included?
Trusting cultures understand that your role is the hat you wear on a team. You have a responsibility to perform a role and an accountability to the company. Those are not the same thing, and the difference is where most friction lives.
The clearest example in SaaS is the relationship between product, marketing, sales and customer success. Product-led growth needs all four working as one system. What happens instead, almost every planning cycle, is that each group tries to own its impact on a company-level metric, and to own it, makes decisions that optimize for its own function.
Framing is not a soft skill
Kahneman and Tversky’s work on prospect theory holds that our choices are shaped by how a situation is framed, and that a $1 loss hurts more than a $1 gain pleases. In a company that asymmetry has a direct consequence: under a negatively framed message, or in the absence of information, people become risk-averse and start seeking certainty. They stop proposing things.
This matters more in SaaS than most places, because we are in the business of solving customer pain, and pain, problems and gaps are all negative framings of what could equally be called opportunities, hypotheses and experiments. “We are protecting, saving or growing revenue by X” is one sentence with several possible readings, and which one your team hears is largely up to you.
Some tension is healthy and should be preserved. CEO and CFO, one accountable for growth and one for risk. Product management and design, one optimizing for learning and adoption, one for reducing customer pain. Those frictions surface options neither party finds alone. The job is not to resolve them; it is to keep them civil and in the open.
Three. Do you agree on what kind of problem you are facing?
Here is the failure mode that costs the most and gets discussed the least.
We interpret situations according to our personal preference for action.
Most people, most of the time, reach for simplification. There is an urgent desire to fix. And simplifying is entirely correct when the problem is simple. The damage comes from simplifying something complex without walking anybody through the reasoning.
A simplifying mindset erodes trust faster than almost anything else a leader does.
When a leader calls something simple, a solution is usually implied, sometimes baked into the problem statement itself, or into a KPI that quietly forecloses the answer. Offering a solution before the problem is understood produces less divergent thinking and takes mastery away from the people about to do the work.
The most useful tool I have found is the Cynefin framework (kuh-NEV-in), created by Dave Snowden in 1999. He describes it as a sensemaking system rather than a categorization system, and the distinction matters. In a categorization system, which is most 2x2s, the framework comes first and data is sorted into it. In a sensemaking system the data comes first and the framework helps you understand what you are looking at. Categorization is fast and good for exploitation. It is close to useless during periods of change.
If you have run card sorts, it is the difference between a closed sort and an open one. In a closed sort you end up forcing a good portion of the data into categories where it does not belong.
Clear. Known knowns. Cause and effect obvious, stable, repeatable. Sense, categorize, respond. Apply best practice. Friction with bureaucrats, who see every problem as a failure of process.
Complicated. Known unknowns. Cause and effect require expertise; a range of right answers. Sense, analyze, respond. Apply good practice. Friction with experts, who see every problem as insufficient time for analysis.
Complex. Unknown unknowns. Cause and effect clear only in retrospect. Complexity is not about how many parts a system has; it is about the relationships between them. Probe, sense, respond. Run experiments that are safe to fail rather than designing something fail-safe. Friction with experimenters, who see every problem as a lack of autonomy.
Chaotic. Cause and effect unclear, no time to establish them. Entering deliberately is innovation; arriving accidentally is a crisis. Act, sense, respond. Friction with commanders, who see problems as people not following instructions, and with innovators, who see problems as other people’s discomfort with the unknown.
What to take from it
The boundary between Clear and Chaotic is not a border, it is a cliff. Complacency walks you off it: the belief that everything is simple and past success will hold. Every other transition is gradual. That one is a fall, and recovery is expensive.
Offering an uninformed, oversimplified solution to a complex problem is the most destructive thing a senior leader can do to a team of builders. Not because it is wrong, but because of what it teaches them about whether to bother next time.
And the framework cuts both ways. It will also tell you when you or a colleague are turning something obvious into something novel, because novel is more interesting.
Structure will keep presenting itself as the answer, because it is the part you can see. Most of the time the constraint is upstream of it: in what you reward, how you frame things, and whether you agree on the kind of problem in front of you.
This first appeared on Medium, 12 January 2021. Read the original.
