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Midstage Founders' Frequently Asked Questions | See all

How to Organize around Output in stead of Functional Disciplines

Organizing startups around outputs proves more effective than functional disciplines due to increased collaboration, focused goals, faster decision-making, and improved adaptability. Cross-functional teams with diverse skills work together towards a common objective, enhancing innovation and overall efficiency. This structure fosters an agile atmosphere, better preparing the startup for changing market conditions.

Organizing your startup around cross-functional teams rather than functional silos has proven to be a more effective way to run a business for several reasons.

  1. Increased collaboration: Cross-functional teams bring individuals with diverse skills and backgrounds together, fostering an environment that promotes collaboration, ideation, and problem-solving.
  2. Faster decision-making: With various expertise within a single team, it becomes easier to make informed decisions quickly and efficiently, leading to improved agility and adaptability in your startup.
  3. Holistic perspective: A team with diverse backgrounds provides varying perspectives, enabling the development of well-rounded solutions and products.
  4. Enhanced communication: Working closely in cross-functional teams breaks down communication barriers, leading to improved information flow, understanding, and teamwork.
  5. Higher employee satisfaction: Engaging in meaningful work with colleagues who have different skills can lead to increased job satisfaction and motivation.

To effectively organize cross-functional teams in your startup, consider the following steps:

  1. Determine output objectives and goals. In general, you should clearly state the goals and objectives for each team to ensure alignment with your overall business strategy. For most SAAS businesses, this template works well:
    1. Innovation Engine: people focused on adding unique value to the product
    2. Acquisition Engine: people focused on getting more customers to sign on to the product
    3. Fulfillment Engine: people focused on making sure the company and product delivers its promises to customers so that customers will renew and potentially spend more;
    4. Enablement Engine: people focused not on customers but on employees, ensuring that departments are well resourced, delivering to expectations, providing investor returns and staying compliant as a good citizen.
  2. Select team members: Choose individuals with diverse skills and backgrounds, ensuring a blend of technical and non-technical expertise.
  3. Establish team roles and responsibilities: Clearly define the roles and responsibilities for each team member, fostering accountability and ownership of tasks.
  4. Implement a project management system: Introduce a project management system to enable smooth coordination and tracking of team projects and resources.
  5. Foster a culture of trust and communication: Encourage open communication, feedback sharing, and active collaboration among team members.


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