Early-stage startups tend to view structure as an enemy
When a company is new and small (I’m thinking sub-50 employees), one of their main advantages is agility. They can move fast, build fast, pivot on a dime. Organizational structure—whether it’s leveling frameworks, job title definitions, or career path milestones—seems like it will lock them into rigid systems and hurt their flexibility.
This couldn’t be further from the truth.
In reality, establishing structure early on means giving a company a skeleton that will hold it together as it grows.
The structural questions you don’t answer when you have 45 employees aren’t going to magically answer themselves. By the time you get to 200, 300, 1,000 employees, loose leveling and titling frameworks start causing major problems. An absence of structure can become a liability and a distraction that scales alongside your business.
Key benefits of early structure and leveling frameworks
- Adds focus during the hiring process. Early startups tend to have a moment where they realize they can’t learn everything on the job—they need someone who brings specialized experience and skills who demands a specific level or title. Without a structure in place, inequities and imbalances begin to surface.
Knowing what defines a “director” or a “manager” at your company—level of experience, scope of responsibilities—will help you zero in on exactly the person you need (and compensate them accurately).
- Clarifies employee growth paths. More than ever, workers are demanding to know exactly how they can expect to grow in their organizations. What are the skill and experience criteria separating managers from directors? How long can they expect that transition to take?
Getting clear early on a leveling structure empowers you to answer these questions when they’re asked versus coming up with semi-accurate answers on a case-by-case basis. Especially with early hires, this helps set reliable expectations. Just because someone is your first engineering hire doesn’t make them your CTO. With this expectation in place, they won’t be surprised when you hire a CTO later on.
- Establish unbiased criteria for performance assessment. By default, performance assessments are hindered by gender bias. Women and minorities tend to get evaluated based on their personality traits, whereas white men tend to get evaluated based on objective results criteria.
Well-defined levels offer performance guidelines that apply to all demographics equally. Thus, when it comes time for performance reviews, managers will have clear criteria by which to evaluate their teams, and will have less room to indulge unconscious biases.
- Pay equity. The same principle applies to pay equity. Establishing leveling frameworks with objective salary criteria makes it less likely that people will get paid differently due to demographic bias.
Additional implementation tips
- Start earlier than you think you should (around 50 employees). Start thinking about structure and levels of the organization before there’s an urgent need for it. A lot of the companies I work with have just secured their Series B. They are looking to scale fast and are starting to attract more experienced employees, who expect structural frameworks. Being able to provide them shows preparation and makes your organization more attractive.
- Start company-wide, and customize from there. While every department has their own unique needs, it is best practice to start by defining universal guidelines to ensure consistency across the company. From there, you can then customize and translate these guidelines for each sphere of your organization.. It’s much easier to retrofit a universal framework than to try and unify many frameworks that were designed differently.
- Prepare to adapt. I advise people to review their structural frameworks once a year. As you define the expectations of each level, you are defining the skills and requirements for your employees. How do those expectations change as your business changes?
For example, today , many companies are cutting costs and looking for experienced players to help them weather the storm. “Entrepreneurialism” may become a higher-priority requirement of leaders than it was when things were more steady-state. Additionally, as you grow, you may need to add additional levels to account for the complexity in the business or different staffing needs. Anticipating the need for flexibility will prevent you from getting blindsided.
Founders and early-stage leadership teams should put structure in place sooner than they think. It doesn’t kill agility—it gives you a stable core. Especially as you grow, a stable core enables you to take more chances than you would if you were constantly ministering to structural flaws.