I'll give you four reasons why founders of start-ups should do something that, on the surface, seems like an utter waste of time right now:

But first, consider the situation....

Situation

Imagine a group of founders, perhaps three or four people. They share a vision of the possible, one that no one else has yet seen. They're driven by ambition — not just to make money, but to contribute something new and valuable to the world.

And they're all working at a feverish pace... all doing whatever it takes to achieve their near-term goals.

To take a couple of days to design an organization chart, especially one that envisions the company years later after it's grown large, seems like an absurd distraction when they're under so much pressure to achieve near-term goals.

And yet, it may be the best use of their precious time — the most important thing they can do to achieve those near-term goals.

The Process

Allow me to briefly describe the process of designing an infinitely scalable organization chart. Then, perhaps you'll understand why this is so important early in the life of a venture.

1. Study the science of organizational structure, and apply the language to your business.

2. Brainstorm all the internal lines of business that will be needed, as far into the future as you can see.

   A framework of all the internal lines of business in organizations (the "Building Blocks of structure") facilitates this brainstorming. Lines of business are clustered under the appropriate Building Block.

3. Selectively move specific lines of business from their "home" cluster to other clusters to optimize synergies.

4. Look for clusters which are too large, and divide the lines of business in them into two (or more) clusters.

5. Consider the span of supervision of the CEO. If it's too large, insert another layer of leadership positions above some or all the clusters.

6. The clusters are now leadership jobs — boxes on the organization chart. Draw the chart, reflect on it, and finalize it.

7. Assign names to all the boxes. Of course, with more boxes than people, founders will have to put their names in more than one box.

There you have an organization chart, complete with names in boxes. The structure is entrepreneurial, since each box is defined as a business-within-a-business.

It's infinitely scalable. As the business grows, you can add boxes under a tier-one leader, and divide the lines of business in their cluster among the subordinate boxes.

And because the design is based on principles, not the personalities and unique talents of the founders, you should never need a major restructuring.

Four Reasons Why It's Valuable from the Start

Why should a team of founders take time out from their crazy schedules to do this?

There are four compelling reasons:

• It clarifies accountability for each of the myriad initiatives you're currently working on — someone tasked with thinking through all that needs to get done to succeed at each of those projects.

  Of course, everybody else can still pitch in and help. But now, you have a single point of accountability, a leader who will ensure that all the pieces are in place, who can reach out for help as needed, and who orchestrates everybody's efforts into a project plan.

  Thus, you're more efficient, and risks are reduced.

• Perhaps even more important, it clarifies accountability for thinking of all the things you're not doing.

  With all the lines of business laid out and assigned to a leader, each of the founders can scan the list of internal businesses under them and brainstorm initiatives in each domain that you haven't yet thought of.

  For example, you're racing to product launch. Did you remember you'll need to set up customer service, vendor management, a customer database, etc.?

• You'll quickly identify critical talent that you're missing.

  You've placed the founders' names in all the boxes. But in some cases, you may see boxes that are critical but the team is lacking the skills.

  These vulnerabilities can be addressed before they bite you, by hiring another leader or contractors and vendors.

• You have a clear growth path.

  As you grow and can afford to hire more staff, you have a clear language for deciding who next to hire and specifying what skills you need.

  For example, the CEO's name might also be in a few of the tier-one leadership boxes. At some point, they might say, "Now is the time to hire a strong professional into this specific box that I've been covering, a line of business that's neither my strength nor my interest."

A Great Investment of Your Time

Most people know that taking time to plan a project saves time in the end. And it reduces project risk.

The same is true at a higher level.... Taking time to plan your organizational structure will make the entire organization more efficient, more effective, and less risky — across the entire plethora of projects you need to get done to succeed at starting a growth company.

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