Dealing with Reorgs and Shifting Priorities

Culture is expressed when ICs know what decisions they can make at any point in time

The more time I spend working with early teams as they expand from 2-3 people to 100+, I realize how much I continue to underestimate the importance of industrial organization (i.e. how you organize people in a company).

Any organization that designs a system (defined broadly) will produce a design whose structure is a copy of the organization's communication structure.

— Melvin E. Conway

We’ve likely all heard of Conway’s Law - companies’ ship their org structure. However, one of the hardest things to do is to implement this thinking when building a rapidly scaling org. Here’s why.

Reorgs

Let’s say you’re a CEO and you look at the org and realize that some teams are not best aligned to the goals of the company. Perhaps you think Product & Eng need to have tighter coupling or Sales & Customer Success are not working well together, etc. So you do what any good CEO does, you talk to managers, learn what the strengths/weaknesses are and then work with your leaders to reorg the teams. The hardest thing here is no matter how well thought out it is, employees will still be drastically affected. Either they’re not interacting daily with who they previously were (in many cases they’ve become friends through these interactions) or their comp has changed or their manager is somebody different who they now need to build a new relationship with, etc.

The quandary that management teams find themselves in constantly is that these reorgs are a necessity. As companies grow, communication channels break down and decision making is not as easily understood as it once was. So changing the team structures to correct this makes sense.

The only remedy here is to over-communicate. Not enough management teams pay attention to internal comms. Everyone reads the external press release and will have tons of opinions. However, it is not often that an internal communication on how the gtm org is shifting under one leader or engineering will be splitting into platform and workflow teams is perused with the same level of care.

I’ve seen it happen far too many times especially as companies enter the 300+ employee stage where reorgs happen quite often. Lack of clear communication without an emphasis on 1 on 1s post the reorg lead to employee concerns, unhappiness, and eventual churn.

How Reorgs Relate to and Demonstrate Culture

Many companies have key values written down. Some are high level like “integrity/honesty” while others are more specific “dogfood what you build first”. However, as much as these may be codified in some documents and even internal systems, every time a reorg happens management teams need to make sure the cultural values are re-understood.

In my opinion, culture is how individual contributors know what decisions can be made at any time. What decisions do they have the latitude to act upon directly vs what needs to be escalated up the chain of command?

When reorgs occur, that culture is being stress tested. Do employees believe that the same decision making matrix that they’ve understood to date hold true in this new paradigm? Only through first assuaging these concerns with 1 on 1s and then second showing through actions how it’s either shifted or stayed the same does the culture get reaffirmed.

Why This Matters Now

Post covid a lot of changes are occurring. Teams that were embracing remote are either now fully remote, shifting to hybrid or moving back to full time in office. Growth trends that may have benefited certain companies are now slowing as customers start to normalize. Companies are moving back from survival mode to keep up with demand to strategic prioritization mode.

In the public markets, one only has to look at companies like Shopify, Zoom, Netflix, etc to see how these changes are affecting stock prices and employees.

To all founders, management teams, and employees, now is more important than ever to over-communicate and focus on internal communication as much if not more so than external communication. People are your biggest and most finite resource and with the current crazy talent market, you need to have your culture show through as clearly as possible.