Your company’s success depends sensitively its structure. In general, the fewer moving parts, the better. A simple framework allows you to be nimble—to adapt to change; to minimize drama among your people; and to limit your legal risks.
Of course, recognizing that you should strive for simplicity is one thing. Actually trimming the metaphorical hedges is another entirely. As the Chinese inventor, Lin Yutang, once observed: “Besides the noble art of getting things done, there is the noble art of leaving things undone. The wisdom of life consists in the elimination of non-essentials.”
So what “essentials” do you need to keep? What can you trim away?
To answer this, let’s take a step back. What exactly is a corporate structure supposed to do for you, anyway? Why does it exist? In some sense, this scaffolding allows your business to produce value in an organized way. It describes how power is distributed; how the company makes decisions; how information flows; and how this framework changes over time.
Two Very Important Questions to Answer
No matter where you are in the entrepreneurial journey, whether you’ve just survived startup or you’re in a robust period of growth, you first need to clarify what’s true now. How does the corporation work today? Don’t dwell on what you wish were true. Instead, answer—with brutal honesty—questions like:
- What does our organizational chart look like?
- How do we currently make our decisions?
- Who’s in charge of what? Why?
- What’s working about this framework? What isn’t? Why?
Once you’ve done this accounting, you then ask yourself (and your executive team, if you have one) a related question: without worrying about how you’re going to get there, in an ideal world, what would your structure look like? Brainstorm fearlessly. You can always prune your ideas later. Capture features, benefits and half-thoughts about this structure in written form. Elaborate on the vision over time—as you make progress, it should grow crisper.
Bridging the Gap Between Your Current Structure and Your Ideal One
Answer those two questions honestly, and your intuitive creativity will take over. You’ll notice gaps between how the company runs today and how it could be run. You’ll see where to cut out needless bureaucracy… and where to prop things up with new systems and processes.
Keys to Enduring Success
Carving your business into a simple, beautiful system is not something you’ll do overnight or in a single breakout session. The process must be ongoing. Be vigilant to prevent your business from being choked by needless complexity.
You also want to cultivate relationships with great mentors to help you keep things simple. If you want an ally on the legal side—a team that’s helped streamline dozens of businesses like yours—please reach out to AEGIS Professional Services for a confidential, strategic consultation. We’re here to give clarity, so you can stay focused on what you do best.
Scott’s practice is dedicated to assisting entrepreneurs, investors, emerging and established businesses with the unique and often challenging issues they meet throughout the formation and growth process: from entity formation, to the management of founder relationships and economics, to the protection of intellectual property, to the financing of growth and navigating securities law compliance. He assists clients as they continue to grow and develop, whether this involves merger and acquisition activities, international licensing and distribution arrangements or counseling of directors and officers.