Startup Best Practices 19 – Recognizing the Breaking Points of Your Startup’s Management Structure [Archive.org URL]

At the founding of a startup, the structure of the company is flat. Everyone is effectively a peer. At about 8 people, a leader must emerge to shepherd the growing team, and so the first management layer is created. Then again, somewhere around 60 employees, the company must add another management layer, and then again when the company reaches a few hundred employees.

This pattern is consistent across companies. When startups approach those employee counts, communication within the company breaks down and the startup can’t effectively coordinate its people. The telltale signs include confusion in the organization, uncoordinated efforts across teams and frustrated employees.

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