How to design your org

How to Intentionally Design Your Org, From Square’s Former CEO

Former Square CEO, AWS's first GM and 12-year Microsoft veteran, Alyssa Henry, walks us through the two crucial considerations for organizational design — your business and your people — and how to connect them.

Outline

There isn’t one right way to build an organization but there’s definitely a wrong way — without intention. No matter what stage of company-building you’re in, connecting the different business functions, the people driving them, and how they communicate is an intentional decision a founder must make and continually revise.

Alyssa Henry, the former CEO of Square, thinks about organizational structure like a distributed system. “Just like you learn in computer science, you always need to be thinking about the distance between the nodes in your network and how communication scales across those nodes,” says Henry.

Henry has spent her career developing and growing durable software products. Before her nine-year run at Square, she helped build AWS from the ground up — joining as the first GM less than a year after launch, and eventually leading all of storage services. Before that, she spent 12 years at Microsoft across roles in engineering, product management, and program management.

The environmental condition: How your business and customers shape org design

Part of organizational design is a mirror-gazing exercise for your company. The other part is external context — ultimately, the best org structure is the one that supports the needs of your business. Henry shares three areas to consider when thinking about how to build an org.

Know if you’re a follower or a pioneer

Henry believes that most companies fall into one of two buckets: they’re either pioneers or fast followers (and rarely are they able to do both well). Founders and executives should understand where their company stands — which is a combination of many things like their market, the people they bring on, the technology they’re building and more.

“Microsoft is an incredible fast follower, very good at seeing something happening out in the landscape and doing it better, cheaper, and faster,” she says. “Competition has to seep from a fast follower because it’s all you’re defined by. And frankly, in the absence of competition, the company struggles.” Amazon was a pioneer.

While both companies obviously have pioneering and following traits, Henry found the distinction really mattered when it came to product-building. When you’re a pioneer, there’s less of a difference between a minimal viable product and a minimal remarkable product (because there aren’t other viable products in the marketplace). “If you’re new, and if it’s viable at all, the reason it’s viable is because it’s remarkable,” she says. “But if you’re a follower going into an existing space, you can’t say ‘Oh, we launched this and it does all the minimal things somebody needs.’ The marketplace is going to say ‘So what? If it’s not 10x better, I don’t care.’”

Consider which constituents you’ll prioritize and identify ROI

Henry says every company has four constituents: customers, employees, shareholders, and the communities in which they operate. “How you stack rank them really changes how the company ultimately operates and what the culture is like,” she says. “But it’s not just the stack rank, it’s also how much you do on each of these.”

When Henry was at Microsoft, it was more technology-first. Amazon was customer, customer, customer. Square was, in some ways, more employee- and community-first, so much so that the team would pick up garbage around the Tenderloin every Friday.

Understand the role of your customers

A key component in org design is intimately knowing your customers — and in Henry’s assessment, where clusters of customers exist and where the product was fundamentally serving different customer needs. “Having one design team or one product team trying to serve very disparate customers is problematic because there isn’t really common ground,” says Henry.

Square started in the payments space, which in general is very horizontal — the functionality and software required to take payments across a number of industries and customers was quite similar (and required less software, Henry argues). But for a POS, that wasn’t going to work. “Once you start moving up the software to operate a business and start to look at workflows, it’s entirely different,” she says.

The human condition: How to operationalize culture, values and goals

Henry makes the analogy that joining a new company can feel like traveling to a foreign country. “The food on the menu looks totally different,” she says.

But the more you see different companies, the more you understand what’s part of the human condition and what’s part of the outside environment. “You notice the differences, but slowly, you also start to notice all the similarities you’ve been part of before,” she says.

Create a set of beliefs that lets people opt-in to your culture

Once you understand that, you can orient around what you want the collective beliefs for your culture to be, and find the people who might share them — this creates belonging. “How do you increase retention? How do you increase job satisfaction? It all comes down to belonging,” says Henry.

Motivate by uniting an org around shared goals

Given Square’s breadth of products, Henry felt like it was almost as if she was running a collection of companies with shared infrastructure — a company in service of the beauty industry, another in service of restaurants.

Roll everything up into company values

When company values are just a bunch of words on a page, that’s where they wither and die. Unless they’re operationalized, they don’t serve their intended purpose of helping scale judgement and decision-making.

Using communication systems to scale the squishy parts of your org

When there’s disconnect between different parts of the organization, Henry believes it comes down to a communication issue — so she intentionally designs and adapts mechanisms of communication. What should be written? What should be talked through? How do these systems change to give everyone the right amount of information at the right time to make informed decisions?

Operationalizing “taste”

As organizations grow, scaling their subjective parts becomes increasingly difficult. Taste is one of those things that might feel squishy but needs to remain consistent and part of how every team operates and makes decisions.

Intentionally building your org is a lasting bet on your company

Your organization is a living, breathing thing that is constantly changing and requires close attention to work efficiently. It can feel extremely overwhelming to build, scale, and maintain it — but like any other project, knowing how to prioritize for impact is a good place to start.