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There’s a popular saying in product development circles: Don’t ship the org chart.
It stems from a theory known as Conway’s Law, which states that:
“Organizations, who design systems, are constrained to produce designs which are copies of the communication structures of these organizations.”
In practical terms, this means that we tend to ship products that resemble our internal product development team structures.
Take for example the extreme case of Ford Motor Company. (I know, two weeks in a row talking about Ford… pure coincidence!).
On average, Ford's vehicles each have about 150 unique microprocessors inside of them. Each module requires software to operate it, and Ford bids out to suppliers who deliver both the hardware and software.
The suppliers retain ownership and control of the software, so Ford can’t make changes, and they have little control over how each integrates with one another.
Listen to current CEO Jim Farley explain the quagmire here:
It’s the worst version shipping the org chart, which in Ford's case includes a vast network of suppliers and partners.
By contrast, Tesla, built its own operating system (based on Linux) that controls and coordinates every aspect of the vehicle’s driver experience and performance.
When a product maker controls manufacturing and distribution, it is said to be vertically integrated. Tesla, Apple, and Netflix are good examples vertical integration.
They aim to control as many layers of the supply chain and distribution model as possible.
Beyond manufacturing and selling, Tesla also owns service delivery, which includes charging stations, repairs, and maintenance.
This model is remarkably similar to most cloud and SaaS companies who build products in-house, operate their own sales teams, and provide services and support directly to their customers.
But often, the experience of dealing with a software company can feel disjointed.
The product doesn’t exactly match the marketing and sales positioning.
Support team doesn't understand the customer's unique configuration.
Professional Services isn't up to speed on the latest product release.
The product handles permissions and reporting differently across its modules.
If any of these examples sound familiar, it's no surprise. Most tech firms have the same challenges. But these are symptoms of shipping the org chart.
You haven’t truly lived as a software executive until your largest customer calls you to complain that interacting with sales, support, and services feels like working with three different companies (especially if all fall under your remit as the leader).
With rare exception, tech companies are organized by functional department; product management, engineering, sales, services, support, success, finance, HR, and so forth.
Each department has a set of roles, processes, metrics, and technologies it uses to complete its execute against its assigned duties.
Departmental structures are good for company managers who need to create efficiency through scale and mentor staff in core functional expertise (e.g. marketing, sales, support).
But the modern department structure of an organization is a disaster for customer experience. The organizational boundaries between these teams seem like little cracks to us, but to customers they feel more like crevasses.
This photo gives me anxiety.
The chasms between our departments are where customer success goes to die.
This is Conway’s Law in action.
While it’s difficult to eliminate the effects of Conway's Law, leadership teams have several options for dealing with it:
Ignore it - pretend it doesn’t exist
Accept it - implement strict processes between teams
Minimize its impact - change the org's communication patterns to reduce its effects
I'm guessing we all agree that ignoring Conway’s Law isn’t the answer.
And rigid processes between teams are brittle, slow, and are not necessarily good for customers either.
Which would lead you to believe that countering Conway's Law through strong communication and collaboration patterns is the best way forward.
To me, this enters the realm of culture, which I define as how individuals and teams work together in service of the customer and the business.
There are three ways to build a culture that minimizes the effects of Conway's Law - leadership, cadence, and communication.
Leadership
Cohesive customer experience starts at the top. Executive leadership, starting with the CEO, must prioritize alignment on behalf of the customer.
At Apple, Steve Jobs played this role. He set the vertical integration strategy from day 1. As a result, hardware, software, and services (like iTunes) largely feel smooth and seamless to Apples end users.
SaaS CEOs can play the same role. However, I've found that many are preoccupied with fundraising, marketing, and sales which is totally understandable given the mission-critical nature of these items to the business's survival.
However, if that's the case, they must delegate this responsibility to another executive. Perhaps the chief product, customer, or operating officer.
Whoever owns the responsibility must possess the vision, organizational savvy, and mandate to drive a unified experience on behalf of customers. They must also be someone who can work with and influence other functional areas of the business.
Cadence
In his book, The Advantage, Patrick Lencioni lays out an ideal organizational rhythm. Daily check-ins, weekly tactical problem-solving meetings, ad-hoc strategy meetings, and offsite business plan reviews.
All of these forums are designed to improve communication and coordination across the business.
Lencioni's Four Meetings
Organizational rhythm can (and should) be applied at the company level and the functional or working team level.
Cross-functional working teams are made up of contributors from different departments who share responsibility for particular business or customer outcome.
I once was on a working team that met with our CEO every Friday afternoon. Top executives from marketing, sales, product, engineering, and service delivery were all present each week.
The meetings were informal in nature and the agenda was ad-hoc. This allowed us to align on key decisions and solve problems in real-time.
Since then, I've continued to use working teams to reduce the effect of the org chart on initiatives and objectives for my teams.
Communication
Constraining official lines of communication between teams can help you scale by avoiding a cartesian product of connections across the company. But on its own, this is not enough to combat Conway's Law.
This approach misses the mark on tacit information around how departments are organized, how their processes work, and what objectives they are pursuing.
In most companies, there isn't one place you could go to see how everyone and everything works together.
The solution is a to establish a “write-it-down” culture.
Write-it-down culture holds leaders accountable to documenting their plans, processes, and structure in a way that everyone in the company can easily access and consume.
Nobody exemplifies this better than GitLab who developed an extensive, 2000+ page, wiki-style operating handbook for the business. In the handbook you can find information that ranges from how employee onboarding works to how they prepare for and deliver quarterly earnings calls.
GitLab takes it a step further by open-sourcing all of it so that you and I can read about and learn from their practices[1].
A true masterpiece of corporate collaboration.
***
It’s natural for the customer experience you provide to reflect the organization structure of the teams that deliver them.
But with enough vision, care, and focus you can overcome the effects of Conway’s Law on your customers.
My list certainly isn't comprehensive - what cultural practices does your company use to avoid shipping its or chart?
(Feel free to hit "reply," and share your examples. Would love to hear them.)
🤘
[1] GitLab documents every part of their organization. From their customer renewal processes, to how their billing systems work, to how they prepare for and deliver quarterly earnings calls. It also turns out to be a brilliant SEO strategy. Check it out here: https://handbook.gitlab.com/
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