What happens when you put the CEO on the bottom of the org chart?
If your startup has grown past ten people (or you needed to do a second investor pitch) you’ve probably spent an eeearly morning session Googling for “org chart”. I feel your pain.
When I went through this midnight exercise two months ago I found “circular org charts” (like an old one for Apple with Steve Jobs in the middle of it). I found “neural link org charts” (based loosely on what the Linked-in AI might spit out for a company). And I found a bazillion typical “CEO on Top” charts for well know companies, including my former employer Microsoft.
The circular charts gave me fleeting hope of a better org design. Sadly, when I studied them, I discovered they represented the same traditional “CEO on Top” structure. Some marketing dude had just arranged the boxes into a circle to make the control feel less obvious. All of these charts still communicated three basic things:
#1 Who you have to make happy to have a good career (aka, whose arse do you need to kiss).
#2 How important you are to the company (aka how many people are secretly vying for your position).
#3 Who needs to retire (or get fired, promoted, or die) for you to move to that next more awesome rung on the ladder.
This “CEO On Top” scheme works great if you are building an army to go beat up on your neighboring country. However, in today’s age of enlightened youth & difficult Millennials who care more about “impact” and “joy” than earning money, it’s a friggen awful way to organize your company. It’s awful because the best people you can ever hope to hire will revolt against this medieval structure.
To be completely honest, even I revolted against this structure when working for Microsoft over 20 years ago. During my first year at MS, I landed an operational roll at MSN. In a few short months I re-organized my team, fixed a bunch of broken stuff and recovered over $50 Million USD of “uncollectable fees”. My team did a remarkable job. Come review time, we expected a remarkable reward (aka more stock options).
Sadly, no such reward was coming. You see my manager (a mid-level VP) had been trying to get into the “cool part of Microsoft”, the hallowed “core product groups of Office, Windows and SQL”. During my first annual review he gave me the Microsoft equivalent grade of a C+ and a pittance of stock. He explained to me that making $50 Million dollars for the company didn’t do HIM any good. If I wanted a good review I needed to “invent a new product” so he could move HIS whole group out of operations into the lofty realm of “product development”. He told me it was “normal” to get a mid-grade review during your first year and then he assured me he had my back and would diligently watch out for my future… and once again that he really needed a cool product idea. Cleary doing a great job at operations (when working in operations) wasn’t good enough to get a great review.
For those who know me, my next four words won’t be much of a surprise. In retrospect, it was very millennial. He sat there quietly, waiting for his motivational speech to kick my brain into high gear. Maybe he was hopeful that a great product idea would magically appear before him — like some goose suddenly motivated to lay a golden egg for his new master. I slowly got out of my chair, signed my official review, looked him straight in the eye and said, “Really? OK. I quit.”, then I left his office and never saw him again.
With my mediocre review forever staining my employment record I went to HR to process my resignation. But Microsoft was a big company, and as it turns out there were lots of other interesting positions. HR shopped me and my entire team around to other divisions. We had apparently developed a reputation of getting complicated things done quickly. In delicious irony, within three short days, my entire group was picked up by the Windows 97 Product team. If you are old enough to have installed Windows 97, then you used our code as you booted up that first CD and fought through typing in a nonsensical product key. (Sorry about that BTW)
Years later I realized the core problem in that part of Microsoft wasn’t my asshole ex-manager. It was the fricken org chart. (Plus the fact I was oblivious to the rules of structure and power hidden in that wonderous document)
Fast forward to a Covid Lockdown Summer of 2020 and now I’m the CEO of Dine.Direct, a remarkable startup that serves restaurants with pickup and delivery solutions. With a market ready solution and top-shelf management team, it is a perfect storm of opportunity. In two months, we grew from 8 to 20 people. We were spread out all over the world, but working together like a family. As we kept growing past 30 people our “self-assigned” organization style started crumbling under the growth. Confusion and inefficiency became all too common. I knew there was no way we could grow past 60 people and still keep the wheels on the bus. We needed organizational structure. We needed an org chart.
But copying the org chart from ridiculously successful companies (MS, Apple, Google) just felt wrong. Our more seasoned team members agreed. This “CEO on Top” diagram did NOT represent how we actually functioned. And worse yet, the imposition of this type of structure felt like it would kill the awesome natural dynamic of our team. We decided to live in chaos for a little bit longer, and wait for a solution to magically appear.
We worked instead to document our values, articulate our mission and define our Dine.Direct DNA. As we learned things together about who we wanted to be and what things were important, we realized that:
- Dine.Direct is more than just a company. We are a community of people on an important, shared mission to help restaurants.
- Leadership is not defined by a location on an org chart, it is found across all areas of our community.
- Impact is not defined by a location on an org chart, rather it is defined by the actions of members throughout the community. (I call this one the “Rosa Parks” rule. Do you remember who the president was the day Rosa Parks refused to move to the back of the bus?)
These three ideas about “who we are” felt polar opposite to the rules of the standard org chart. For us, the chart felt backwards. It felt like something out of an alternate universe. Once we clearly understood the problem, the solution became obvious — Just draw the chart upside down!
In our first version, customer (restaurant) support ended up on the top. This part of our organization will have lots of employees, and we were in talks to outsource this work. But it felt a little silly to outsource the group on top of the org chart. Then I remembered the ridiculously high salaries Disney used to pay to the people who sweep trash in the theme parks — because these people were closest to the customer. Maybe we were on to something.
The next thing that happened was a subtle shift in thinking. Our chart took on a feeling of “who do you support” instead of “who do you control”. Now our restaurant support group serves and supports our clients, restaurants. It is this group’s primary responsibility to make the restaurant successful — so we put restaurants above them. We kept adding relationships based on “who you support”. We added development teams and graphics people. We kept drawing boxes and lines.
Framing the design with “Who do you have to make successful?” instead of “Who do you control?” was a better fit for our culture.
We expanded this idea and drew boxes for other companies we work with. Bicycle companies and accounting firms became part of our org chart, because they work as part of our community and they share our mission. Yesterday we added a representative governance council, changed the name to “Dine.Direct Community Chart” and proclaimed version 1.0 complete.
Where did the CEO end up? Pretty close to the bottom actually, inside of a box called “Organization, Human Resources and Business Support Services”. How well will this work? We’ll know in six months. I can promise you though that we will celebrate the shit out of the first team who saves us $50 million. Either way, leave a comment and next spring I’ll post an update extolling the virtues of our brilliant organization — or post a link to an updated copy of my resume.
